As the middle of the first quarter of 2023 approaches, private equity firms have continued to demonstrate their interest in investing in digital health. This does not come as a surprise, as most startups in the healthcare technology space have been active in developing attractive strategies. These companies strive to improve health outcomes and lower expenses by focusing on specific gaps, issues or illnesses, prioritizing technological innovation, and customizing individualized care plans, reports Sheppard Mullin Richter & Hampton.
While the healthcare industry is experiencing an evolution towards digitally enabled care, this movement has been accompanied by a rise in regulatory oversight of digital health — an ostensible conclusion to recent shifts, including the COVID-19-era investment boom in telehealth and the persisting issue of narrowing the digital divide to ensure equitable access and outcomes. Meanwhile, Congress’s recent approval of the 2023 Consolidated Appropriations Act extended important flexibilities for telehealth provisions, and even as venture dollars dwindle in the market at large, health tech and digital health startups have the ability shift focus from dealmaking to partnerships.
Under the current landscape, there are high-level trends that private equity investors involved in digital health startup formation and consolidation may want to consider as they formulate ways to prioritize value and innovation while mitigating risk. The following serves as a broad overview of recent policy updates and areas of opportunity in 2023. Read more.
