Silicon Valley’s vision to transform healthcare
Technology giants such as Google, Apple, and IBM seek to revolutionize how healthcare is delivered.
It wasn’t only the aging demographic that prompted high-tech firms to throw their hats in the healthcare ring. Nor was it the market opportunities created by the Affordable Care Act (ACA), or investor enthusiasm for software solutions that may solve some of the healthcare industry’s most pressing problems. It was all three.
Over the last five years, tech titans including Google, Intel, IBM, and Apple have set their sights on the roughly $40 billion healthcare IT market, joining a proliferation of Silicon Valley startups that are developing new products to help achieve the “Triple Aim” of better care, improved outcomes, and lower costs.
“Since passage of the Affordable Care Act [in 2010], these trends have combined and we’ve now got more than $10 billion of new venture capital dollars flowing into the healthcare IT industry, and more than 500 new companies created,” says Bob Kocher, MD, an internist and partner with venture capital firm Venrock in Palo Alto, California, which invests primarily in healthcare and technology.
An additional 17 million Americans, he notes, have gained health insurance coverage under the ACA, aka Obamacare, at a time when retiring Baby Boomers are already fueling a spike in demand for healthcare services. “We’re adding 10,000 Medicare beneficiaries every day and older people spend more on healthcare, so from a purely economic standpoint, the opportunity in the healthcare market is enormous, interesting, and growing,” says Kocher.