Healthcare investing in a post-pandemic world: Reaction leaders speak to the 5 biggest opportunities for new value
Reaction Health Leaders
Pandemics transform healthcare. COVID-19 will be no different. Reaction believes this is an unparalleled opportunity for a paradigm shift in the way that we perceive, understand, and invest toward a more sustainable and resilient healthcare ecosystem. As investors, we acknowledge both our power and responsibility to shape the future of this field. The COVID-19 pandemic revealed systemic weaknesses and technological strengths. As global health leaders, we’ve identified the following as the top major opportunities:
Homes are the new hospital: The new, patient-centric supply chain of care delivery
Continuous patient monitoring opens a world of new possibilities
Increased patient awareness of health will surge demand for accessible preventive solutions
Availability of patient data will unleash the predictive power of technology
The oncoming tsunami of mental health needs will trigger rapid innovation to avoid total disaster
Homes are the new hospital: The new, patient-centric supply chain of care delivery
This past year, virtually every country suffered from a lack of equipment and supplies to test for and protect against COVID-19. Countries are thus reexamining their supply chains for critical health and livelihood related products. “The pandemic will accelerate concepts and solutions that have been in the works,” says Claudia Mitchell, Reaction Health Leader. “New pipelines for approval of drugs and therapeutics will be forged and there will be fewer barriers to cutting the red tape. Look at the timeline for vaccine development! We have learned that we can leverage technology to rethink our processes and provide faster, safer care”.
The pandemic is accelerating concepts and solutions that have been in the works
Claudia Mitchell, Senior VP Astellas Pharma, Reaction Health Leader
"The point where care is delivered and the ways it is delivered are also going to change, and will be heavily transferred through a digital point of contact”, adds Health Leader Ilaria Villa. “We are only scratching the surface of the telemedicine revolution, with digital solutions and remote consultations surging in demand.” Rafael Cordeiro, Health leader and hospital executive in Brazil, has seen telemedicine and tele-primary care not only meet patients where they are, but also provide additional revenue streams for his institution. “Solutions that facilitate the shift to telemedicine in a seamless way will represent major future opportunities,” concurs Health leader Santiago Imberton.
Markus Sieger, Chair of Health leaders at Reaction, has a broader vision. “Patient care will become more and more connected, with a rise in automated and precision marketing and a digital go-to-market element that will allow delivery of whole solutions and services to patients. We will witness a shift towards a patient-centric healthcare delivery.”
Continuous patient monitoring opens a world of new possibilities
In the context of tracking transmission and trends of infection, the role of biosensing in this global pandemic cannot be understated. Testing has accelerated life-saving decisions on treatment of COVID-19 from infection detection to individual health monitoring.
Health leader Giacomo Tesolin believes that the “device side” is now inextricably tied to the “software side.” “Before 2020, biosensing technology faced significant adoption challenges. Now a major role for smart biosensing technology has clearly been outlined. The need for continuous monitoring is a necessity that transcends this acute emergency and applies to other healthcare challenges such as chronic disease management.”
The need for continuous monitoring is a necessity that transcends this acute emergency and applies to other healthcare challenges such as chronic disease management.
Giacomo Tesolin, Intrapreneur Business Leader, Reaction Health Leader
The internet-of-things realizes a decentralized model of healthcare by connecting sensors via databases with healthcare workers, – an important tool in providing valuable insights for emerging infectious disease scenarios and dynamics. Blockchain technology could hold the key to securing such sensitive information. “So how will devices and software become part of one solution? These are the opportunities we don’t want to miss.”
Increased patient awareness of health will surge demand for accessible preventive solutions
Our relationship with health has profoundly and fundamentally changed, challenging our notion of what health is and what value it holds. “All countries, with no exception, were struck by the realization of their vulnerability. And vulnerability changes the way we look at health. We’re now considering opportunities in prevention and compliance that simply were not on the table before”, reflects Ilaria Villa.
All countries, with no exception, were struck by the realization of their vulnerability. And vulnerability changes the way we look at health.
Ilaria Villa, Head of nPVU at UCB, Reaction Health Leader
Health Leader Bruno Pipponzi notes that the pandemic has highlighted a need to bring patient care closer to the patient. “Telemedicine provides new options for patients, but it doesn’t cover all scenarios. Bloodwork and most COVID tests, for example, require in-person interaction. The result? Patients are forced to use different, disjointed health services to different health scenarios, resulting in a fragmentation of their health data that leads to poorly informed clinical decisions”. As a solution, Bruno imagines a transformation of pharmacies into the “Health Hubs” of the future – “a system that can provide a broader, smarter set of health services by combining digital health solutions with traditional healthcare. For example, to educate patients on preventive behavior, then measure and reward those activities to help these patients reduce their chances of contracting a chronic disease.
[We envision] a system that can provide a broader, smarter set of health services by combining digital health solutions and traditional healthcare: the “Health Hub”
Bruno Pipponzi, Health Business VP RD, Reaction Health Leader
Health, of course, extends beyond disease and encompasses all aspects of a patient’s life and routines. “For example, COVID will have an important impact on the $80B gym industry”, suggests Reaction Partner Dan Matthies. Health Leader Alison Lum points out that the patients are taking more ownership of their health than ever before, which can open opportunities for more self-care facilitated by digital therapeutics. Others, however, warn against the risks of an increasing consumerization of healthcare. Markus Sieger points out that as millions have experienced care through digital channels, such experiences have shaped attitudes and demands. What are the implications of healthcare shopping, cost transparency and communication, and what strategies should providers consider for both short- and long-term success?
We will witness a shift towards patient-centric healthcare delivery
Markus Sieger, CEO Polpharma Group, Chair of Reaction Health Leaders
The oncoming tsunami of mental health needs will trigger rapid innovation to avoid total disaster
“There is a tsunami of mental health needs coming our way and we need to rethink our approach to mental health entirely,” says digital health pioneer and health leader Paul Gilbert. “Traditional face-to-face mental health care cannot keep up with the needs: it’s too costly, too episodic and too inconvenient. More importantly the paucity of measurements yields highly variable quality of care. The future will be in telemedicine-based approaches and digital phenotyping.” Paul’s belief is that more measurement will provide a standardization of mental health status, and allow for to more opportunities for intervention. “Innovations like this will come very rapidly and will receive large adoption because the need is just immense.”
There is a tsunami of mental health needs coming our way and we need to rethink our approach to mental health entirely. Traditional face-to-face mental health care simply cannot keep up with the need.
Paul Gilbert, CEO of Health Rhythms, Reaction Health Leader
Availability of patient data will unleash the predictive power of technology
Without a doubt, the virus has had an impact on how the healthcare industry views, treats, and values information, particularly patient data. “The growing amount of patient data will enable radical transparency,” says Markus Sieger, “with impacts on pricing and contracting of drugs and services to the healthcare system.”
While data is not a panacea, it can help our healthcare system get more serious about evidence-based care. Shared global experiences will lead to the creation of more global datasets and to the integration of artificial intelligence and machine learning in key specialties, especially radiology and diagnostic medicine. “Before COVID, we expected that centralized data trends would take at least 5 more years to mature,” says Bruno Pipponzi. “Now, we can see it happening within a year.”
What has changed in terms of incentives and stakeholders? Investor and health leader Henry Xue explains that COVID has been a tipping point for the adoption of digital health and health data. “Previously, the major challenge was reimbursement strategies: digital health was an optional alternative and represented an added cost to hospitals – who was responsible for covering such costs? Now that hospitals have experienced a dire need for remote care, everything has changed. A lot of assumptions have been challenged and digital health transitioned from being an alternative solution to the new norm”.
The Reaction Perspective
The pandemic has highlighted the shortcomings of healthcare systems worldwide. Our leaders at Reaction, representing all continents and 45 countries, shared their personal insights.
Reaction Partner Enrico Carbone explains that emerging economies are experiencing an acceleration in long-term trends in healthcare. “For example, how was Brazil expected to provide telemedicine solutions without electronic prescriptions? These topics had been discussed over the past 5 years, but with the advent of COVID they were approved within a week.” Enrico believes these trends will also create opportunities for ancillary services and solutions that gravitate around telemedicine, such as drug compliance and delivery services, propelling emerging economies forward in the race for digitalization.
As a result, challenges that may seem rather basic at face-value have become critical, everywhere. Inclusion Leader Richard Essex highlights the need to deliver supplies across continental Africa. “The whole supply chain is an issue”, he says, “and we’re looking to create digital platforms to connect suppliers, payers and distributors through end-to-end solutions starting in East Africa and then launching more broadly.”
Despite the challenges, there were success stories too. “Brazil was able to draw several lessons from the earlier European experience with COVID,” explains Rafael Cordeiro. “Looking ahead, one of the major and long-term impacts of the pandemic is likely going to be better collaboration between countries and regulatory bodies."
One of the major and long-term impacts of the pandemic is going to be better collaboration between countries and regulatory bodies.
Rafael Cordeiro, CFO at HospitalMaterDei, Reaction Health Leader
Pandemics are blind to borders, ethnicity, age, and gender. And we will fail to face them without collaboration. With it, however, we may deploy a more sustainable, equitable and accessible model of healthcare, globally: a chain Reaction of change.
About the Author
Ileana Pirozzi is a PhD Candidate in Biomedical Engineering at Stanford University and a Reaction Fellow. Ileana hails from Italy and is based in Palo Alto, CA.
About Reaction
Reaction is about creating exponential change. We are a global community of entrepreneurs, investors and executives who share a vision for a world where innovation can meaningfully change more lives in less time. Why now? Because more innovations will be created in more countries and more industries over the next decade than in the previous 50 years. Many will offer the potential to solve global issues. But will fail to reach the markets they could have benefited most. Reaction was founded by a global team of Stanford alumni who united to solve this problem together. Our mission is to measurably improve one billion lives, within a decade, by scaling innovations that will change the world.
