Healthcare information is both massive and highly complex. According to management consulting firm McKinsey & Company, patients will generate an estimated gigabyte of health data every day by 2020, from MRI scans to clinical trials. This flood of information represents both a challenge and an opportunity for healthcare companies that have the big data skills.
Analytics, AI and Healthcare Analytics
In the last several years, we’ve seen an upsurge of investments in healthcare companies that are aggregating data and performing analytics instead of (or in addition to) directly helping patients. According to research and consulting firm MarketsandMarkets, the healthcare analytics market is expected to more than triple in just five years, rising from $8.9 billion to $29.8 billion between 2017 and 2022.
What’s more, the allure of artificial intelligence and machine learning has begun to further energize the healthcare space. 86 percent of healthcare companies now say that they use some form of AI technology, and 55 percent of them believe that AI is important in order for them to remain competitive.
In this article, we’ll discuss the implications and ramifications of this newfound interest in healthcare analytics.
Healthcare Analytics: Fundraising and M&A
A growing number of startups and small businesses are using big data to disrupt and revolutionize the healthcare industry, from insurance to primary care—and investors are taking notice. Venture capital funding of digital health companies reached a record $2.5 billion in 187 deals in the first quarter of 2018.
M&A activity for healthcare analytics companies is also at a peak this year. Private equity firms are increasingly drawn to the healthcare industry for a variety of reasons, including attractive margins, the aging “baby boomer” generation, and the general growth in demand for patient care.
For example, in February Swiss pharmaceutical giant Roche agreed on a $1.9 billion acquisition of Flatiron Health, a digital health analytics startup. Flatiron’s electronic health records software platform has links with 250 community oncology practices around the country. Roche hopes that the Flatiron deal will give them more insights about promising new experimental cancer treatments.
Big Data and Healthcare: 3 companies to watch
The good news for those interested in the healthcare space is that there’s still a great deal of strong investment opportunities. Here’s a look at just three healthcare analytics companies that investors should keep their eye on:
Innoplexus is a big data company that uses AI and machine learning techniques to process billions and trillions of data points across different sources. Through its pharmaceutical and life sciences platform iPlexus, the company seeks to help healthcare companies “crawl, aggregate, analyze, and visualize” the information that they have at their fingertips.
Dexcom is a company that manufactures and distributes continuous glucose monitoring systems for patients with Type 1 and Type 2 diabetes. Already approved by the FDA, Dexcom’s “G6” device is able to monitor users’ glucose levels through a sensor placed under the skin, without the need for drawing blood. Users can also view data-driven reports generated by the device about trends in their glucose levels over time.
Perahealth is a healthcare analytics startup that seeks to identify patients who are at risk of problems and complications before their condition becomes critical. In order to make these predictions, the Perahealth platform uses the Rothman Index, a graph of patients’ condition over time based on data such as their vital signs and lab test results.