October 18, 2023

HLTH 2023: 6 Emerging Microtrends for Healthcare Innovators

From headliner speakers to hallway conversations, HLTH 2023 was full of insights on healthcare innovation. Redesign Health returned as a sponsor, bringing a full crew of Operating Company CEOs and advisors. Meanwhile, Kira Wampler, our Lead Venture Chair and Head of Startup Success, moderated a panel on how employers are responding to the financial impact of cancer.

Throughout the conference, we identified six microtrends that will shape the early-stage company landscape in the years to come:

1. Medicaid takes center stage
2. The ‘startup ecosystem’ is back in a big way
3. Founders and funders should put their money where the TAM is
4. AI, trust top payers’ concerns
5. Content is healthcare’s newest market
6. Innovation abounds in Remote Patient Monitoring (RPM) despite market shutdown

Read on for more of our team's takeaways.

1. Medicaid takes center stage

This year, Medicaid not only had a seat at the HLTH table—it was the guest of honor. Some of the most interesting conversations centered on public calls to action for innovation in Medicaid.
In past years at HLTH, we saw growing consensus on the need to enhance care and equity in Medicaid populations. But this year, conference speakers leveraged their literal platforms to make the business case for building for Medicaid.
It’s widely accepted that low reimbursement rates and high costs of care typically squeeze Medicaid profit margins thin. But successful operators in this space now see that the real margin upside is created when people are healthier—that is, when they’re using preventive services and accessing care more frequently. Panel participants also encouraged innovators to look for opportunities to create long-term value, rather than trying to find arbitrage by exploiting poorly designed policies.
Social services vendors in the Food as Medicine space at HLTH echoed this commitment to creating a healthier Medicaid population in the long-term. They noted, for example, that the most effective Medically Tailored Meal (MTM) programs aren’t the ones that aim to retain members throughout their lives. Instead, they’re the ones that drive better health outcomes for each member by teaching them what accessible, healthy eating could look like.
2. The ‘startup ecosystem’ is back in a big way

In recent years, the healthcare community has recognized that solving the industry’s toughest problems takes a multi-stakeholder approach. This was apparent at HLTH as several trade organizations and government agencies unveiled new healthcare ecosystems. It’s encouraging to see the heavy hitters behind these efforts, including the Advanced Research Projects Agency for Health, the American Medical Association and the American Association of Retired Persons.
These hubs bring together founders, funders, researchers and other piloting institutions to accelerate the growth of innovative companies. This collaborative approach underlines the idea that new startups need adequate access to advisors and topical experts in order to succeed.
These new collaboratives also address a longstanding issue with startups that serve underrepresented populations. Founders in this space have been frustrated with the inability of government and research institutions to research lesser-funded verticals. These gaps have created a costly burden for startups to develop large swaths of industry knowledge. With stronger partnerships at play, startups won’t have to go it alone.
3. Founders and funders should put their money where the TAM is

Total addressable market (TAM) matters. That’s the message we heard from CEOs of mission-driven companies, especially in verticals like women’s health and health equity.
These leaders are tired of working with investors who underestimate the size of their market and therefore don’t see the need to back multiple solutions. For mission-driven founders, iIt’s disheartening to hear phrases like: “We’ve already completed our women’s health investment for the year,” and “We are looking to invest in one Social Determinants of Health (SDOH) business in this fund.”
The nuanced reality: Funds sometimes communicate a predetermined allocation mix to their investors and limited partners in advance. Still, founders’ frustrations are valid. History shows us that when a company solves for a large enough pain point, the market will follow.

4. AI, trust top payers’ concerns

During the Payer Insights programs, payers told a cautionary tale about the excitement around artificial intelligence (AI) and algorithms. They mentioned their dissatisfaction with both the adequacy of data collected and the quality of that data from an equity and representation standpoint. Because these same biased datasets feed AI algorithms, payers addressed fears that new AI care delivery models could make care less accessible for their members.
A second major takeaway was the importance of building trust and creating authentic dialogues among patients, community members and plan members. Payers are increasingly using community health workers and promotoras to build better relationships and break down information barriers.
5. Content is healthcare’s newest market

Plenty of behavioral health companies attended HLTH, but we noticed a key differentiator among newer startups and established players. The new entrants are adding online communities to their platforms, emphasizing visual or auditory storytelling forms over text-based narratives.
We also saw many product demos featuring video content generated in-house from companies focused on patient engagement, health literacy and reducing disparities. Because online communities are a key resource for underserved populations, the need for this type of content will likely only increase in the years to come.
Interestingly, some vendors at HLTH have already identified this need and are catering to it, acting as outsourced content creators for their customers. They’re driving education and engagement through short, digestible, gamified content and leveraging AI tools to modify content to match their patients’ literacy level.

6. Innovation abounds in remote patient monitoring (RPM) despite market slowdown
While the RPM growth curve has abated slightly post-pandemic, plenty of innovators continue to reshape the space. Two examples we saw at HLTH included:
- Low-cost, episodic wound care medical devices that serve as alternatives to point-of-care imaging services
- Physical therapy monitoring technologies that leverage AI to help providers measure functional capabilities
It’s worth noting that many of these companies exist within unstable reimbursement landscapes—including uncertainties about the future of telemedicine policies and the availability of grants for financially struggling providers, such as Federally Qualified Health Centers.

Final thoughts

If there’s one other thing we learned at HLTH 2023, it’s that the relentless pursuit of innovation in our industry remains strong. We returned with fresh optimism about the role of startups in reshaping healthcare for all.

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