Hello HoH readers!

Welcome to this week’s edition of Healthcare and Innovation at the Crossroads.

This week, I drove my family to our vacation home on the Baltic Sea (→ Fischland-Darß-Zingst). The kids have a two-week school break, and we try to get them out of the city as much as possible. The previous weekend, we had a massive storm in the area that led to flooding, but luckily, our house and our neighbors' houses were unaffected.

On Tuesday and Wednesday, I went to Munich to meet with clients. Together with a colleague, I managed to have dinner at Das Goldene Kalb, which is a steakhouse. In case you're looking for a top-notch place to enjoy some of the highest-quality cuts, this place is a safe bet.

For the remainder of the week, I stayed up north with my family. I'm currently working on a marathon project, and I'm happy to report that I've been able to stay on track despite the cold, dark, and sometimes wet mornings. And, during my sessions, I've been thinking about health-tech and innovation stories that I came across this week!

Feel free to share your comments and feedback below. I hope you enjoy reading this newsletter.

Take care,

Andre

Q3 2023 digital health funding: Smaller but mighty and Assessing the Clinical Robustness of Digital Health Startups: Cross-sectional Observational Analysis. and Are digital health solutions actually solutions? 

The heights of digital health funding during the pandemic are still fresh in our minds. 2021 broke records with unprecedented overall funding volume and average deal size. However, in 2022, the funding volume and deal size have decreased substantially, but digital health continues to receive significant investment.

This is reason enough to have a closer look at Rock Health’s latest funding report.

In Q3 of 2023, the digital health venture market became more resilient. Despite economic challenges and investors being cautious, startups in the U.S. managed to raise $2.5B in 119 deals.

The flow of capital has tightened due to factors such as anticipated economic slowdown and high interest rates, leading to more conservative investment strategies. This shift has resulted in challenging negotiations and crucial conversations about startup valuations, highlighting the importance of adaptability and survival in the market.

As the sector navigates through this change, startups are embracing transformation and striving for a renewed market where opportunities flourish despite adversity. The key to success is resilience, adaptability, and a relentless pursuit of innovative healthcare solutions in a transformative economy.

So, the digital health industry saw a shift in focus in Q3 2023, with a significant investment of $1.64B in products and services aimed at disease treatment, and $1.59B directed towards nonclinical workflow solutions. This reorientation towards comprehensive care and operational efficiency marks a departure from pandemic-era priorities like on-demand healthcare.

Investments in digital health illuminated innovation, with ventures like Vivante Health raising $31M. They offer a combination of telemedicine and holistic health modules.

Mental health and nephrology stood out as sectors attracting substantial investments of $0.9B and $0.7B, respectively. This spotlight underscores a nuanced focus on managing complex conditions with technology-driven, value-based care (VBC) approaches.

Investment trends underscore a decisive move towards VBC models, particularly in high-cost therapeutic areas like mental health and nephrology. Companies like Better Life Partners and Healthmap Solutions are emblematic of this trend, carving niches with VBC in the mental health and chronic kidney disease sectors.

An evolving landscape shaped by policy initiatives and enterprise partnerships will further steer investments, cementing VBC as a pivotal element in the transformative journey of digital health startups. This period marks a nuanced evolution, reflecting a strategic redirection towards comprehensive, value-centric, and innovative healthcare solutions.

In this world of digital health, numerous companies are vying for attention, hoping to win over customers, including consumers, physicians, employers, and insurers, with their innovative solutions. Prior to 2022, capturing the spotlight was relatively easy due to the thriving market. However, as noted above, the economic climate has changed, leading to new challenges and increased skepticism among customers, particularly employers. They are now closely examining the true value of digital health offerings and asking a critical question that has been overlooked for too long: Are these solutions truly a wise and fruitful investment in healthcare innovation?

In more scientific words, healthcare technology stakeholders lack a comprehensive understanding of clinical robustness and claims across the industry.

Rock Health conducted a cross-sectional observational study that provided insight into the digital health landscape. They analyzed over 200 digital health companies in various clinical domains such as prevention, diagnosis, and treatment, and created a 'clinical robustness score' by considering clinical trials and regulatory filings like 510(k), De Novo, and premarket approval. This score reflected each company's clinical solidity.

The results were surprising: 60% of the examined companies had a clinical robustness score of 1 or less, with the median score being 1, indicating a precarious position (The clinical robustness score was defined as 1 being not robust and ≥10 being robust). This underscores a crucial narrative - although there are many digital health entities in the market, a significant number of them are not clinically robust.

To conclude this study, it has been found that numerous digital health companies lack clinical robustness and make limited claims, as shown by regulatory filings, clinical trials, and publicly shared data. It is recommended that both companies and customers should consider investing in greater clinical validation efforts to improve the overall quality and effectiveness of such products.

As explained in last week's newsletter, Germany is leading the way in providing a standard process for healthcare innovation. Thanks to the German Digital Healthcare Act (2019), physicians can prescribe digital health technologies that have proven clinical benefits. This is a significant shift towards a patient-centric approach, where the health system covers the costs.

Under this paradigm, digital therapeutics undergo a meticulous evaluation by the government, ensuring that they are built on a solid foundation of clinical evidence, safety, and unyielding data protection and security. Currently, there are ca. 30 approved digital therapies, marking a monumental milestone in the integration of technology in healthcare for improved patient outcomes.

Primum non nocere

Non-maleficence is a crucial ethical principle in the healthcare industry that emphasizes the importance of preventing harm. This principle is taught worldwide in healthcare education and encourages healthcare professionals to adopt a cautious and thoughtful approach when administering medical treatments. In simple terms, it urges professionals to avoid interventions or actions that carry a significant risk of harm, despite their potential benefits. The principle requires healthcare professionals to carefully weigh the pros and cons of any action they intend to take, to ensure that it does not worsen the patient's condition. Ultimately, the principle places the well-being of the patient above all other considerations.

In the fast-paced world of start-ups, balancing innovation and avoiding harmful or ineffective treatments can be challenging, particularly in digital health. Additionally, it is important to provide a simple and efficient way for healthcare professionals, patients, and all stakeholders to evaluate various digital treatment options. How can we achieve this balance and ensure that we are pushing boundaries while also prioritizing safety and effectiveness?

Germany has established a regulatory framework that permits prescription and reimbursement, which the US has yet to enact. However, there is still a lack of a unified approach to ensure that the quality and safety of a digital product is visible, both in the US and Germany.

In summary, navigating the complex landscape of digital health requires stringent evaluation standards. With a plethora of funding fueling a boom of startups, the market is bustling yet saturated. In such a dynamic ecosystem, it is crucial to ensure the clinical robustness and effectiveness of digital health solutions. To achieve this, there is a compelling call for tools and methodologies that resonate with objectivity and transparency, echoing the precision of global healthcare models. Innovative approaches that serve as robust navigational aids are necessary to empower customers with clarity and confidence. This empowers them to make informed investments in technologies that promise not only innovation but also tangible, enduring value and a transformative impact on healthcare outcomes.

As always, please share your thoughts and comments!

Last week, I received 2 book recommendations:

• Breathe: The new science of a lost art; James Nestor

• The Oxygen Advantage: The Simple, Scientifically Proven Breathing Techniques for a Healthier, Slimmer, Faster, and Fitter You; Patrick McKeown

I got both and will share back here in the future. In the meantime, I would like to share some interesting research about breathwork. This technique has shown promising results in reducing oxidative stress, which is known to cause numerous chronic diseases. However, scientists still don't fully understand how it works.

Researchers analyzed 10 randomized controlled trials involving 519 participants to investigate the effects of breathwork. The studies measured various biomarkers such as malondialdehyde, superoxide dismutase, glutathione, nitric oxide, vitamin C, and total antioxidant capacity levels. The findings showed that breathwork increased the activity of endogenous antioxidant enzymes, specifically superoxide dismutase, and glutathione, while reducing malondialdehyde levels, which is a marker of oxidative stress.

Breathwork is an umbrella term that refers to various breathing exercises and techniques, often practiced as part of general relaxation practices, yoga, or meditation. Evidence suggests that breathwork improves heart rate variability and promotes resilience to stress.

To conclude, breathwork has been found to reduce oxidative stress by promoting the activity of endogenous antioxidant enzymes. While the analysis was based on only 10 studies, the results are encouraging and suggest that this technique could be beneficial for those interested in promoting their health and well-being.

Name: Saragat Cannonau Di Sardegna 2020

Territory: Sardinia, ITaly

As readers of this newsletter know, Sardinia is a Blue Zone. Some may have only heard about it in a documentary or read about it once in a paper, which could have raised a number of questions. Yes, Sardinia was the first ever declared Blue Zone, one of a few places in the world where a larger proportion of the population lives to be 100 years old compared to other areas.

Grapes: Cannonau

Grenache sails somewhat under the radar compared to more famous grape varieties like Merlot, Cabernet Sauvignon, or Syrah. However, Grenache is among the most cultivated, valuable, and oldest varieties globally, having been mentioned as early as 1513 in Aragon. There are over 20 synonyms known alongside the French Grenache, with the Spanish Garnacha, the Catalan Garnatxa, and the Sardinian Cannonau being the most prominent. Its origin is passionately debated. Spain claims it is indigenous, but recent studies hint at Sardinia.

Tasting:

The Cannonau di Sardegna Saragat is an exquisite wine from Sardinia that offers a delightful wine experience. It has a bright ruby red hue with violet reflections, and its bouquet is filled with intense aromas of ripe red fruits like cherry and blackberry, as well as floral nuances such as violets and dried roses, along with aromatic and savory herbs. On the palate, it immediately displays the characteristics of an elegant and velvety wine, well balanced between fruit and oak aromas. The wine boasts well-integrated tannins and a balanced acidity that ensures a robust finish.

Occasion:

A notable trait of Sardinians is that they consume wine in moderation. Among the various types of wine, Cannonau wine stands out as it contains two to three times more artery-cleansing flavonoids than other wines. It is believed that moderate wine consumption may contribute to the relatively lower levels of stress observed in Sardinian men. So, if you're looking for a true Mediterranean red wine, you can't go wrong with Cannonau!