Investment Hype in AI for Mental Health Apps: Value-Based Care Approach
In the ever-evolving landscape of healthcare technology, Flare Capital’s recent analysis of healthcare AI venture capital deals sheds light on where investments are creating tangible value. The examination of 4,000 deals in the past decade reveals that health AI startups catering to health systems, insurers, and the life sciences sector have collectively raised a staggering $60 billion, with 70% of that sum being secured in the last 5 years.
However, the correlation between capital raised and value creation is not always straightforward. According to Flare Capital’s findings, the majority of AI startups selling to health systems remain in the early stages of funding, with only a small percentage progressing to Series C or later rounds. In comparison, a higher proportion of life sciences and health plan startups have successfully advanced beyond the initial stages of funding.
Highmark Health, a prominent payer and provider group based in Pittsburgh, has recently revamped its coverage to include digital treatments for chronic pain and other conditions. This marks the company’s second endeavor in covering prescription digital therapeutics, with a focus on innovative solutions such as AppliedVR’s chronic lower back pain treatment, Luminopia’s virtual reality therapy for pediatric lazy eye, and Stanza’s smartphone app for fibromyalgia. The evolving policy reflects Highmark’s commitment to adapting to the dynamic landscape of digital healthcare solutions.
In a significant move towards mental health parity, the White House has finalized rules requiring health insurers to treat mental health care on par with physical health conditions. This policy shift aims to eliminate barriers to accessing mental health services and ensure equitable coverage for individuals seeking treatment for mental health conditions. The move has been lauded as a step towards destigmatizing mental health care and promoting holistic well-being.
Former National Institute of Mental Health director, Tom Insel, emphasizes the importance of outcome measurement in telehealth apps and advocates for a shift towards value-based care in mental health. Insel’s company, Vanna Health, is pioneering a model that prioritizes patient outcomes over traditional fee-for-service arrangements, with a focus on quality and holistic care. Other startups, such as Author, Firsthand, and Amae, are also championing a more comprehensive approach to mental health care delivery.
Apple’s latest keynote event unveiled a new feature on its smartwatch designed to detect sleep apnea, signaling the company’s commitment to leveraging wearable technology for health monitoring. The incorporation of health-focused features in Apple’s products underscores the growing trend of tech companies entering the healthcare space and promoting preventive wellness through innovative solutions.
In a groundbreaking effort to address bias in clinical algorithms, a Brooklyn safety-net hospital system is striving to eliminate race from kidney disease risk calculations. By removing race from the equation, the hospital aims to identify at-risk individuals earlier and improve access to timely treatment and transplants for patients with chronic kidney disease. This initiative reflects a broader movement towards equity and inclusivity in healthcare algorithms.
Abbott’s over-the-counter continuous glucose monitor, Lingo, is now available without a prescription in the U.S., offering consumers a convenient tool for tracking blood sugar levels. While the mass marketing of CGMs presents new opportunities for health monitoring, the efficacy of these devices ultimately depends on how users and clinicians utilize the data they generate. Factors such as affordability, user engagement, and behavior change will play a crucial role in determining the impact of CGMs on overall health outcomes.
As the healthcare industry continues to embrace technological innovations, the intersection of AI, digital therapeutics, and wearable technology holds promise for transforming the delivery of mental health care and promoting holistic well-being. By adopting a value-based care approach and prioritizing outcome measurement, stakeholders in the healthcare ecosystem can drive meaningful change and enhance the quality of care for individuals seeking mental health support.
