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The Shift from Expensive Technology to Cost Saving Technology

Posted on June 6, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Someone recently pointed out to me the irony of healthcare’s history investing in technology. Plus, they pointed out an interesting shift in healthcare IT investment that I think’s worth pointing out and discussing further.

If you look at many of the healthcare technology investments of the past they often were in very expensive equipment. Think about the huge robots or other medical devices with enormous price tags. These machines were often miracle workers in what they could accomplish, but in order to have that miracle it usually came with a really hefty price. I’m not sure all the rationale for buying these huge expensive machines, but they would make these purchases over and over. This type of spending led healthcare technology investment to spend huge amounts of money trying to create the next technology that would get hospitals to spend large amounts of money on a huge device.

The unfortunate thing for healthcare was that while this new technology could improve the quality of care provided it cam at an enormous cost. I know that I and many others mostly throw cost out the window when we’re talking about our health. We want the best treatment possible no matter the price.

The interesting thing is that a new breed of healthcare IT investment is happening. There’s a shift to investing in software and devices that instead of increasing the cost of healthcare strive to actually lower the costs of healthcare. While certainly many would argue on whether EHR software lowers the costs of healthcare, that’s the intent. I think that long term we’ll see the cost savings of EHR software and the software that gets built on the backs of EHR software will lower costs.

I’m sure there are a lot more examples that illustrate both sides of this. Plus, there are likely some exceptions to the above analysis as well. Although, I do think this is a trend that’s important and will serve healthcare very well.

Shifting Healthcare Venture Capital Investment

Posted on April 27, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Change is in the air when it comes to venture capital (VC) investment in healthcare. I wrote about this a few days ago on a post on EMR Thoughts called VC Investment in Healthcare. The final paragraph is a nice summary of my thoughts:

I think we’re seeing a shift in healthcare investment into a large number of smaller companies who can innovate as opposed to larger sums of money into medical device and biotech companies. In some ways we’re seeing the costs associated with a startup company in healthcare starting to come down the way they did in the IT side of things.

I was amazed by the timing of a post from my favorite venture capital blogger, Fred Wilson, called Can The Crowd Be More Patient?. His first paragraph provides a similar sentiment:

One of the most noticeable changes to the VC business over the past decade is the movement of investment allocation from capital and time intensive sectors like biotech and clean tech to capital efficient and fast moving sectors like internet and mobile.

Although, Fred offers an interesting twist on where sectors like biotech might get their funding in the future: crowd funding.

The idea of crowd funding is definitely beginning to take shape. Websites like Kickstarter and IndieGoGo have started the trend with no equity involved and the latest jobs act has opened up the door to allow crowd funding to happen with equity involved. For those who don’t know what crowd funding is, it could be 1000 people all “investing” $100 into a company that needs to raise $100,000. That means that 1000 people are all at very little risk, but the company gets a relatively large sum of money. Those who invest the $100 would own a very small part of the company and benefit in any upside the company experiences. It’s going to be a game changing way to fund entrepreneurship and will be an incredibly important investment trend.

The interesting thing is that we’ve seen this funding trend in healthcare for a really long time. Ok, they haven’t gotten equity for the investment, but how many of you have supported cancer research or diabetes research through a donation? That’s basically an investment in the companies that are doing that research.