Healthcare in the U.S. is expensive, complicated, and slow. The U.S. spends $3.5T on healthcare every year (almost 30% of which is covered by the federal government), and this number is projected to rise with an aging population, extended life expectancy, and struggling social security system. This looming crisis has spurred tech giants and startups to develop technologies to lower costs in order to meet the needs of the 20.6% of Americans who will be over the age of 65 by 2030.
The NewtonX Healthcare Vertical conducted a survey with current and former executives at these tech healthcare companies, including at Google, HealX, Apple, and Oscar to survey the market for hacking healthcare. The data and insights in this article are derived from this survey.
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AI has the potential to lower patient and operating costs significantly. Currently, roughly 25% of American hospital expenses go to administrative infrastructure— as compared to Canada’s 12%. A large part of administrative expenses have to do with long hospital stays and insurance complications. AI can reduce hospital stays both through integrated patient data programs and through doctor assistance tools. For instance, QualComm’s AlertWatch:OR AI product gives real-time analysis of patient data during surgeries, which reduces average hospital stays according to research done on the tool.
Additionally, there are numerous healthcare startups aimed at integrating and streamlining healthcare data and hospital stays. In 2009, just 16% of U.S. hospitals were using an electronic health records system; now, over 85% of hospitals use electronic health records. By leveraging patient data and gaining access to crucial records, hospitals can improve efficiency and time to diagnosis and treatment.
Diagnosis is another area in which AI can help with early detection and accuracy — both of which could cut down on hospital stays and free up doctors’ time. Most AI-powered diagnostic tools are being built by tech giants and/or healthcare startups.
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Recently, Apple hired over 50 doctors to work on products like health sensors for Apple Watch and health records management systems. As we recently wrote, Amazon has put together a 12-person Alexa Information Group Health and Wellness team and hired a HIPAA Compliance Lead, in addition to acquiring PillPack for almost $1B. Google has rolled out a diabetes management system, an AI that can diagnose over 50 common eye diseases, and an AI that can diagnose metastatic breast cancer with 99% accuracy. And these moves into the healthcare sector haven’t gone uncontested: hundreds upon hundreds of healthcare startups have received VC backing to be the first company to hack healthcare.
Indeed, healthcare startups have raised over $15 billion in 2018, an increase of over 70% in the same period the prior year. The highest funded of these is a startup called Grail, that could conceivably compete with similar systems from Stanford University scientists, Google, IBM, and Tokyo’s Showa University, to detect various types of cancer earlier and more accurately than human doctors. The second most highly funded startup, Clover Health, uses AI-powered analytics to help seniors and private holders of Medicare find more affordable insurance options.
The New Frontiers: Affordable Senior Health Monitoring, AI-powered Administrative Tasks, and Cancer Diagnosis
The three areas that NewtonX identified as having the most interest in terms of investment are senior health monitoring (an area that Amazon is moving into), AI-powered administrative health tools, and cancer diagnosis. If AI successfully augments each of these areas, it will lower costs for consumers and improve the efficiency of the healthcare system. With a rapidly aging population, both of these outcomes will become increasingly necessary, spurring even more investment in the space.