U.S. Funding for Digital Healthcare Start-Ups Expected to Reach $6.5 Billion by 2017

News Release
U.S. Funding for Digital Healthcare Start-Ups Expected to Reach $6.5 Billion by 2017, According to Accenture

CHICAGO; Sept. 22, 2014 – Driven by evolving consumer expectations, start-up funding for digital healthcare, such as telehealth or wearable technology, is expected to double in the United States over the next three years, growing from $3.5 billion in 2014 to $6.5 billion by the end of 2017, according to new research by Accenture.

“A digital disruption is playing out in healthcare that will change social interactions, alter consumer expectations and, ultimately, improve health outcomes,” said Dipak Patel, managing director of Accenture’s patient access initiatives. “This momentum will be sustained if digital healthcare start-ups apply capabilities that create a seamless patient experience and result in both medical cost savings and improved outcomes.”

According to Accenture, an estimated $2.8 billion was used to fund digital health start-ups last year, growing at an annual rate of 31 percent since 2008.  Accenture projects digital health start-up funding will grow to $4.3 billion in 2015, and it is expected to reach $6.5 billion by the end of 2017.

The research found that between 2008 and 2013 start-up funding totaled $10.2 billion for digital health solutions addressing four market segments:

  • Infrastructure capabilities, such as interoperability and health analytics, accounted for an estimated $2.9 billion in start-up funding, which was used by organizations to comply with industry changes and federal Meaningful Use guidelines.
  • Engagement solutions, such as wearable technology and incentive programs targeting behavioral change among patients, received $2.6 billion in start-up funding.
  • Treatment tools, which enable alternative care channels by leveraging technology, such as telehealth, also received $2.6 billion in start-up funding.
  • Diagnosis technology captured $2.1 billion in start-up funding, representing a rapidly growing segment of clinical and consumer tools, such as remote monitoring, that provides practitioners with real-time insight.

“Healthcare leaders will need to embrace digital capabilities, not only to stay relevant to consumers, but to influence behavioral change, improve access to care channels and reduce per patient costs,” added Patel. “Organizations need to weave digital capabilities into the core of their business models so technology becomes embedded in everything they do.”

Methodology
The 2014 Accenture study projects U.S. funding for digital health start-ups. The forecast is based on market analysis, project experience, third-party analysis and data from 2,000 digital health start-ups receiving funding between 2008 and 2013. Pure-play medical devices, bio-tech, consulting/advisory firms and public companies are excluded from the research.  Accenture did not evaluate the business soundness of individual companies.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 293,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.

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