Digital Health Technology in the Spotlight

News from the Annual J.P. Morgan Health Care Conference

The palpable buzz at this year’s J.P. Morgan Health Care conference indicates that valuations are still going strong and 2015 could shape up much like 2014, in terms of deals and IPOs.  This year, the number of digital health companies at the conference was much larger. Perhaps this influx was a result of the Affordable Care Act and the HITECH Act which encourages health care providers to improve health care quality, safety and efficiency. Many digital health companies were formed with the intention of helping providers achieve those goals through innovative technology.  

With interest rates near zero, the capital markets are looking optimistic for digital health companies, whether start-ups or companies that have been around for a while. Even before the conference, Qualcomm Ventures announced a joint investment company created with Novartis Pharmaceuticals with the intention to raise $100M to invest in digital health companies. There is also an expectation that several large IPOs will occur this year, including companies like HealthGrades, Evolent Health, MindBody, Doximity and Best Doctors.

The environment might be right on Wall Street since investors are aware that the health care industry withstood the 2008-2009 recession. During that time, jobs in the health care industry grew 7% while the overall job loss was 8 million.  Another positive indicator could be that investors made money last year from the IPOs of digital health companies Everyday Health and Veeva Systems.

According to Forbes, the top 10 tweets from the J.P. Morgan Health Care conference included three tweets from Rock Health, a company that provides startups with funding: 

  • “Ask VCs which industry they’re most excited to revolutionize, and odds are high they’ll say healthcare"
  • "Telemedicine may just be the biggest trend in digital health in 2015"
  • "Digital health is no longer the sideshow of #JPM15.”

The overwhelming highlight from the J.P. Morgan Health Care Conference is that digital health companies are hot. Whether they will raise funds through venture capital or IPO, digital health companies are definitely on the watch list for 2015.

Marc Fogarty, Audit Partner and a member of EisnerAmper's Public Companies, Cleantech and International Services Groups. Marc is experienced in public accounting, serving public and private organizations and has presented on IFRS to professional groups.

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