4 Areas Within Digital Health That Will See Consolidation Next Year

The MedCity News editorial team asked a variety of healthcare leaders attending the HLTH conference in Las Vegas last week the burning question of the day: What areas within digital health will see consolidation in the next six to 12 months?

Here are a few areas that they pointed to:

Generative AI and Clinical Documentation
The hype over generative AI is real and that is a category that will see some winners and losers. Here’s how Dr. John Halamka, president of the Mayo Clinic Platform see it.

“So we are in this incredibly fascinating time where as I go booth to booth in HLTH, I see generative AI everywhere and business models nowhere.,” he declared.

He added that no one has figured out how to deliver value in digital health overall and “predicted a huge shakeout” with a “a few early movers” in areas like clinical documentation, radiology interpretation and oversight and digital pathology. Others in this space will be left behind.

The chief medical information officer of Cedars Sinai also pointed to AI-enabled clinical documentation as an area where some consolidation activity will occur.

“I really think there’s been a lot of work over the last [few] years around ambient AI scribes and I do believe that there are some clear leaders coming out of the fray,” said Dr. Shaun Miller, chief medical information officer at Cedars Sinai.

Behavioral and Mental Health
Huge amounts of investment have gone into this category, said Brad Smith, CEO of Main Street and not surprisingly, mental health is a category that he feels is going to undergo some thinning of the herd.

Christine Lemke, co-founder and CEO of Evidation Health, described behavioral health as the “no.1 area” that is ripe for consolidation.

A venture capitalist agreed.

“I think all the mental health platforms will consolidate especially across acuity levels …,” said Sofia Guerra, vice president at Bessemer Venture Partners.

She added that companies that build solutions to recruit the best therapist talent will also consolidate.

Care Delivery and Virtual Care Platforms

“Well there will be a tremendous amount of consolidation in all of the virtual health platforms,” said Missy Krasner, venture chair of Redesign Health. “These are platforms that essentially are white labeling a tech platform to do async and/or realtime virtual health.”

Nworah Ayogu, chief medical officer of Amazon Clinic, the virtual care platform of the Seattle retailer, said that the care delivery market has already seen consolidation. He is correct – think of Amazon buying One Medical, CVS Health buying Oak Street and Walgreens’ VillageMD buying Summit Health. The same motivation of merging to be able to serve larger groups of customers will be seen next year, Ayogu said.

Michelle Davey, co-founder and CEO of Wheel, also pointed to care delivery as an area of future consolidation.

“The platformization of care delivery is here so the very niche care delivery arms are going to come together,” she said. “You’re going to be able to access, as a consumer, your care from primary care, women’s health and accessing from that same platform maybe your mental health.”

Digtial Therapeutics

Ever since Pear Therapeutics, widely considered a pioneered in the world of prescription digital therapeutics, sputtered, the category seems to have a bullseye on it. For several years before that, digital therapeutics has been a story largely of failed partnerships between pharma and health tech companies.

Of the 11 health executives we interviewed, only one pointed to digital therapeutics as an area that will see consolidation, but it’s a significant area nonetheless.

“One area is pure tech providers like digital therapeutics that will end up consolidating with virtual care,” predicted Chris Hogg, CEO of Marley Medical.

Whether you believe that these areas will indeed consolidate or that there will be others, many will agree that the ride over the next 12 months will not be pleasant.

“Just prepare for a very rocky year ahead of you,” warned Dr. Halamka of the Mayo Clinic.

Photo: maxsattana, Getty Images

Reporters Katie Adams and Marissa Plescia contributed to this story.