How Washington Has Catalyzed Health Investment and Innovation in Silicon Valley

Fitbit Flex, Nike Plus FuelBand, Basis Band and Jawbone Up in action

Fitbit Flex, Nike Plus FuelBand, Basis Band and Jawbone Up in action

The Affordable Healthcare Act has been roundly and regularly criticized by Washington partisans since the law was enacted by Congress and signed by President Obama two years ago. It seems all we hear about is the negative, as the feds figure out how to implement the omnibus legislation from Beltway insiders.

Yet, the ACA has had a dramatic and unintended positive consequence. New investment in digital health has skyrocketed in the last two-year period, and all of these companies are focused on helping to solve the big problem that the ACA seeks to reform: How to deliver more and better health services, at lower costs, with healthy outcomes as the measure of success.

In the wake of the ACA, over 100 digital health startups have been founded to take up the charge of delivering market-based solutions that solve for outcomes and efficiency improvements, including TelaDoc, CliniCast, iTriage, Omada, and Simplee. Several of these companies focus on improving outcomes at lower cost as the basis for their value proposition. This is highly disruptive to the existing healthcare business regime that has never been measured on outcomes.

Last month’s pronouncement by the American Medical Association to designate obesity as a clinical disease is another accelerant for fast-paced investment in digital health, which has seen 37 venture capital investments (valued at $365M) in the last year alone — a 35 percent increase over the previous year.

In Silicon Valley, there is an upsurge of technology companies developing innovative approaches to help Americans live healthier, happier, more productive lives. Some of these companies promote “wearable computing” to track lifestyle changes and behavior change. Others promote “social sharing” so that those who have common challenges can share, encourage and team-up to improve their health and share best practices.

Digital health is already transforming the delivery of healthcare — from streamlined EMR integration to custom blood work and concierge-type medicine for everyone. While many digital health solutions are targeted to either address providers or consumers, the next wave may see the development of tools that merge support with physician guidance and interaction, to provide customized treatment plans and accountability. The main challenge with obesity, and many of the diseases that stem from it, is that even with medical intervention, the cure requires lifestyle changes. There is an opportunity for digital health to design integrated solutions that give physicians and patients shared tools to treat and manage disease.

Ten million Americans currently participate in quantified-self solutions or social health communities like Fitbit, Run Keeper and My Fitness Pal. However, looming mobile health app regulation and new policies stemming from the ACA could ignite a consumer backlash against employer information reporting, government oversight and changes to health benefit offerings. There is already growing discontent with the amount of information that will be shared through the Federal Data Services Hub.

One certainty is technology’s role in the business of healthcare, from evaluation and administration to delivery of care. The revamping of and the president’s executive order that makes all federal data freely accessible in a form that can be used by software developers validate the mission to leverage technology to make government more efficient and transparent.

Never in our lifetimes has more investment and innovation occurred in health and healthcare than since the ACA was signed into law, and this boom is an indicator of good outcomes for patients and providers alike. By allowing for more transparency and a focus on outcomes, the ACA offers a new model for “kickstarting” market investment, innovation and job creation — healthy economic outcomes that are hard to argue with, and that will benefit all Americans.

As CEO of Keas, Josh Stevens is responsible for leading the development and market adoption of the company’s breakthrough wellness platform and applications. Prior to Keas, Stevens was Vice President of e-commerce at YouSendIt, Senior Vice President of strategy and business development at TicketsNow, and General Manager of e-commerce at AOL.

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