Skip to main content

The healthcare system has been rocked by waves of COVID infections during the pandemic, forcing a host of rapid changes. Insurers and public health providers now regularly pay for telehealth sessions, people have have become accustomed to conducting medical tests at home and vaccines have been developed faster than ever before.

Chris Bischoff, who helps lead health care investment in Cambridgeventure capital firm General Catalyst, predicts that many changes will persist long after COVID conquers.

“The pandemic has revealed deep vulnerabilities in the system,” Bischoff, who joined General Catalyst earlier this year from a European investment firm, said in an interview. “But on the other hand, it also demonstrated the transformative power of technology and innovation. It proved that the healthcare industry can embrace change – when faced with an existential crisis.

Insurers and providers will continue to reimburse virtual treatments and consumers may have more choice, he said. Meanwhile, the rate of investment in healthcare startups has slowed along with the rest of the venture capital market. Globally, health technology companies raised $7.1 billion in the second quarter, down 58% from 2021, according to data from CB Insights. Yet General Catalyst just announced several new funds, including a $670 million fund for healthcare startups.

Despite declining venture capital funding, tech giants like Amazon and Oracle have jumped on opportunities in healthcare. Oracle completed its $28 billion purchase of healthcare data giant Cerner in June, and Amazon last week announced its $4 billion deal for onsite healthcare provider One Medical.

“We’ve clearly seen these big tech companies coming…I’m overall optimistic that this will allow change to happen more quickly,” Bischoff said. Healthcare needs a large ecosystem of different companies with different specialties and strengths, so there should still be room for startups to thrive, he said.

Locally, Buoy Health is using AI software to help people check for symptoms and get the right care. Akili Interactive is a pioneer in video game-like treatments for cognitive disorders like ADHD, and Dynamicare has developed an app to help people fight addiction. General Catalyst has backed Overjet, an AI dental software startup, and Beacon Biosignals, which uses AI for neurology, psychiatry and sleep medicine.

Buying Amazon and the market drop could encourage other tech companies to get involved in buying smaller players. Google and Apple have already targeted the healthcare market with their own apps and data services.

“I don’t think Amazon’s decision will go unnoticed,” said Bischoff, who is based in London but was in Boston to check out the local health tech scene. “Obviously there will be further consolidation. There are going to be some interesting things [mergers and acquisitions] exit digital health as 2023 approaches.″

Several of Bischoff’s themes came together in a deal he led in April to invest $50 million in Waltham startup Eleanor Health, which focuses on mental health care and addiction treatment, in part using online sessions on a phone or a computer. The company uses technology to increase efficiency and reach more potential patients. And Eleanor can cover less affluent areas of the country that are underserved by mental health care providers.

“There are far more people with substance use disorders today than there should be,” he said. “But finding, engaging with and providing care to these populations, given the stigma around them, has been difficult.”

While visiting Boston, Bischoff’s biggest challenge was the heat wave. But returning to London won’t bring much relief.

“It’s hot all over the UK,” he said. “And we don’t have air conditioning. People are really struggling. »


Aaron Pressman can be contacted at [email protected] Follow him on Twitter @ampressman.