'Blah-Blah' May Subside, But Harnessing AI Ethically, Impactfully Is Key For Medtech In 2024

Doctors today are drowning in data. When I was in med school, the amount of medical literature doubled every six years; now it’s every six months! And while the pace of medical science is a good thing, there’s no way a practitioner can keep up. This is where their challenge becomes our challenge: how do we enable physicians to make sense of the rapid innovations that are happening, so that they can actually apply it to enhancing patient care? That’s where digital and AI tools will play an important role.

One way is through the use of implantable devices that are programmed to track health data, then turn that data into actionable information. That’s something we’re doing with HeartLogic, an implant which identifies signals that could indicate worsening heart failure, then alerts the practitioner. A second way is to apply digital and AI tools to processes that typically require a lot of specialized skill and training, making it more feasible for the typical interventionalist, as we’re doing with AVVIGO+ in the realm of echocardiogram. A third way is by harnessing vast quantities of real-world data from electronic medical records to better inform clinical decision-making, like we did in the REAL-PE trial, which studied the use of EKOS for pulmonary embolism treatment.

This rapid pace of change can feel like an overwhelming challenge to physicians, but it’s work like this that transforms the challenge into an opportunity to improve patient outcomes.

Grasping how to better apply AI technologies to support an augmented QARA professional. 

Against a backdrop of continuous regulatory change, financial pressures and product complexity, the healthcare industry will advance in understanding of how to effectively apply AI technologies to the Quality, Regulatory and Safety arenas and recognize where the AI solutions themselves are limited in application through operational constraints such as data quality, data privacy, solution cost and regulatory controls.

Biggest uncertainty for 2024: Will large companies in health and wellness approve budgets to do significant work in women's health? Or will they continue to stay on the sidelines? There are conversations around investing in women's health market research, acquisition, and product development. Unfortunately, there are still minimal conversions of these conversations into paid contracts. Femhealth Insights believes the women's health innovation industry is still nascent and we do anticipate deep financial commitment to eventually happen. Will it be in 2024?

I think some smaller organizations are struggling to implement cybersecurity in a tightening funding environment. Large companies are struggling against inertia; the thinking runs along these lines: 'We didn't share much cybersecurity documentation with the FDA in the past, we got cleared or approved, so why should we change now?' The uncertainty is – will the FDA crack down and start issuing significant deficiency letters on cybersecurity, and if so, when? Questions people are asking are: will it be across the board, for all devices that qualify for the definition of 'cyber device,' will it include devices that don't meet the statutory definition, and how hard will the FDA push back?  The short answer is, yes, FDA will ask for cybersecurity documentation, commensurate with the risk of the device, for any device containing software.  For 'cyber devices' the full statutory requirements are expected. For higher-risk devices (often coming with higher benefits to patients), the expectations will be most stringent. When will this happen? It's happening right now!"

Next year the main issue in our VC world is valuations. There has been turbulence in the recent past and at the moment there is still uncertainty. We'd like some stability. It almost doesn't matter at what level, but just something we can rely on for a few years to come. As VCs, we're dealing with plenty of uncertainty. We don't need the interest rates one on top of it all. Similarly, of course, we don't need inflation either. So hopefully this will land somewhere where rates are what they are and go down slowly at some point in 18-24 months, and all else follows from that. Fingers crossed.

Staffing is a problem too, though. Particularly also the willingness and ability of people to move between countries or continents. Now is not a time for young families to hop around, which is not good for any business, but less so for startups who need these kinds of adventure seekers.

I don't think the wars in Ukraine and Gaza will matter much, by the way. Largely sideshows, away from the main stage. Main stage is probably the coming rise of India (over a frustrated China). AI will get used, but the blah-blah around it will subside. It'll become integrated in everything, much like the internet and mainly for back office stuff.

As an early-stage investor in healthcare, we are, like many others, affected by the macro-economic environment, including rising interest rates and the subsequent squeeze on costs from the private and public sectors. Healthcare is a constant need and fundamental right, so our sector may be somewhat more insulated from these macro changes. 

Our portfolio companies are also feeling the uncertainty, though it isn’t all bad: Budgets are being tightened, but because a lot of our companies focus on augmenting healthcare practitioners’ capabilities and improve cost-care-effectiveness, they are sought after. 

Another uncertainty is procurement, which remains an evolving process as many healthcare systems have yet to put in place standard operating procedures (SOPs) for procuring Digital Medicine services, partly because they tend to rely heavily on AI. The net effect remains to be seen, but given our focus on services that demonstrate significant healthcare impact, and the general demand as healthcare systems remain constrained both by costs and healthcare supply, we remain optimistic that the space will continue to grow at a fast pace. 

Despite these uncertainties and complexities of the current market, we remain confident that our focus on health sciences is a key strength when added to our deep-rooted network and dedicated investment teams that will enable us to help our companies navigate the challenges and opportunities that lie ahead in 2024.