Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home IT Management
    • IT Management
    • Networking

    VCs AWOL on Health Care IT Investments

    By
    Roy Mark
    -
    February 20, 2009
    Share
    Facebook
    Twitter
    Linkedin

      Perhaps the $19 billion in the economic stimulus dedicated to health IT initiatives will move venture capitalists, but the much touted new health care economy is likely to be slow out of the blocks without a large increase in venture funding for health care innovation. Despite widespread consensus on the need for health IT reform, a recent survey shows venture capitalists invested less than three percent of their funds into health care services in 2008. According to the NVCA (National Venture Capital Association), VCs pumped just $195 million into health care services last year, a fraction of their total $28.3 billion in investments.

      Backing up that report, is data from Dow Jones VentureSource showing only $354 million invested in health care IT and $357 million for health care services in 2008, less than three percent of all venture investments.

      Whatever number you pick, health care investments have been slim to none.
      “As long-time health care investors, we’re optimistic about the incredible growth and opportunities ahead in the new health care economy,” Dr. Albert Waxman, the Psilos Group’s senior managing member and CEO, said in a statement. “At the same time, we can’t ignore the shocking contrast in priorities between President Obama’s health care plans and the venture industry’s traditional investment focus. The bottom line: It’s time for ‘change’ to come to venture.”
      According to NCVA, health care IT and services funding in 2008 was dwarfed by general software ($4.9 billion), industrial/energy ($4.6 billion), biotechnology ($4.5 billion), medical devices ($3.4 billion) and digital media and entertainment ($2 billion). The NVCA report shows 2008 to be the worst year in a decade for health care deals and dollars invested in the sector.
      VentureSource shows declining figures for health care IT deals and dollars for the last six years.
      “We hope the venture industry sees President Obama’s plans as a wake-up call to get serious about the economics of health care, not just the science of biotech,” said Waxman. “The risk-and-reward dynamics of this new environment are tailor-made for venture capital, and our nation needs us as a partner in this important venture.”
      Waxman warns, though, health care investing in 2009 “will not be for the faint of heart,” citing a tough economy, spiraling health care costs and the “significant uncertainty and risks” involved in the Obama administration’s health care plans.
      “Health care inflation in the United States is well over twice the core inflation rate, and that is unsupportable,” Waxman said. “Plus, changes have to be made to address the explosion in America’s aging population over the next two decades. We’re predicting a 10-year transformational cycle that will re-define the health care economy, and should reward young companies that apply innovation to cut costs and improve care.”
      Waxman said smaller companies and private ventures can afford making riskier long-term investments, while larger health care providers and payers should focus primarily on managing costs and navigating reforms. Longer term, Waxman predicted innovations will be adopted by mainstream providers and payers.

      Roy Mark

      MOST POPULAR ARTICLES

      Big Data and Analytics

      Alteryx’s Suresh Vittal on the Democratization of...

      James Maguire - May 31, 2022 0
      I spoke with Suresh Vittal, Chief Product Officer at Alteryx, about the industry mega-shift toward making data analytics tools accessible to a company’s complete...
      Read more
      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      Applications

      Cisco’s Thimaya Subaiya on Customer Experience in...

      James Maguire - May 10, 2022 0
      I spoke with Thimaya Subaiya, SVP and GM of Global Customer Experience at Cisco, about the factors that create good customer experience – and...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×