Why Big Tech has struggled in the health-care space, according to Intel chair
Health tech has been a growing sector of the broader health care economy for several years, boosted in the last two by the pandemic, giving rise to investments in the space like the new unicorn Biofourmis.
CVS Health (CVS) just joined the list of investors in the global virtual care startup, which caters largely to older individuals who benefit most from remote patient monitoring and other virtual services to help keep their health in check — and costs low.
With tech products increasingly available to individuals of all ages, the use case has also grown for health tech. Presumably, the largest technology companies would have the resources to disrupt the sector. But it's a much more regulated industry than what they are used to, said Intel (INTC) chairperson and new Biofourmis board chair Dr. Omar Ishrak.
"Health care, in the end, gets value when the technology improvement translates to an improvement in patient outcomes," Ishrak, former Medtronic CEO, told Yahoo Finance.
He noted that the journey to success is rooted in proving the technology clinically, having regulatory approval and acceptance from insurers, providers and patients alike.
"You've got to go through that whole journey. And that's not a short-term journey. That's not just a product development," Ishrak said.
"The tech companies, in general, don't want to go all that way," he added.
Biofourmis CEO Kuldeep Singh Rajput said his company's journey since its inception in 2015 proves that virtual care can help reduce costs by almost 40% and reduces hospital readmissions by more than 70%.
The company first began by helping to monitor patients on medications in a partnership with Novartis (NVS) and has steadily grown to include other virtual services.
"With CVS Health, the way we look at it is, we have plans of moving into value-based care. Especially when we look at that strategy, our current focus is health systems and pharma. However we want to expand into payers," Rajput said.
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