New research from venture capital firm Venrock covers wide-ranging healthcare and business issues, with one key finding being that economic uncertainty will be a major barrier for healthcare IT innovation over the next 12 months.
The firm’s annual 2020 healthcare prognosis survey started in late February, and once the COVID-19 pandemic began to impact the U.S., the company issued two follow-up surveys in late March and April in order to track the rapidly changing sentiment elicited by the crisis. Overall, the surveys received nearly responses from nearly 900 executives, comprised of health IT company executives, providers, insurers, employers, and others.
Related to health IT, economic uncertainty as a core challenge doubled over the course of the surveys, while talent concerns dropped by half. “With the steepest job losses since the Great Depression, the war for talent is history. Now it’s the battle to get hired, even in healthcare — the layoffs in March marked only the fifth month in 30 years that the industry has shed any jobs at all,” Venrock analysts stated.
Regulatory changes were also cited as a bigger barrier in the first survey (40 percent) than the third (18 percent), while respondents believe funding is a greater challenge now (34 percent) than it was a few months ago (21 percent). When asked to predict the number of healthcare IT IPOs in 2020, 92 percent said they expect fewer IPOs in 2020 in the second survey, compared to 64 percent in the first.
What’s more, when asked what the hottest healthcare sector will be in the year to come, in the first survey, analytics/big data was the top choice (80 percent), trailed closely by telemedicine (75 percent) and then digital preventative care (59 percent). But in the second survey, when asked about the long-term role of telemedicine, 72 percent said it will be a lasting part of Medicare/Medicaid, 57 percent said it will replace office visits, while 26 percent noted “it’s a fad.”
In the first survey, as expected, COVID-19 barely outpaced opioids and hospital pricing as the number-one or number-two problem to address, while a full one-quarter of respondents cited it as the least urgent problem. However, in the second and third surveys, two-thirds of respondents said the virus is their top problem, ranking slightly above the opioid epidemic and hospital prices.
With so much talk about treatments and vaccines for COVID-19, Venrock asked respondents to weigh in on when these solutions might become a reality. When asked when there will be an effective drug to treat COVID-19, the number of people who said 2020 or 2021 actually dropped from the second survey (53 percent) to the third one (39 percent). The same drop happened when asked to predict when there will be an effective vaccine: in survey two, 45 percent said 2020 to 2021, but just 31 percent estimated that timeframe in the most recent survey.
According to Venrock, “The world is learning what it means for a vaccine to be not only effective, but also broadly available, leading our respondents to hedge their predictions a bit over the course of our inquiries. Some of the most encouraging treatments involve plasma transfusions from recovered patients, yet confidence that an effective drug treatment will be available soon waned.”
Further related to COVID-19’s impact on healthcare, 69 percent of respondents said the pandemic will spur a surge in innovation to make better and cheaper life-saving technologies, 60 percent said it will lead to permanent changes in medical licensing, 54 percent said it will create a shortage in healthcare workers, and 36 percent believe it will lead to a massive investment in interoperability.
Interestingly, in the most recent survey, half of respondents (47 percent) said they believe their business will be unaffected by the pandemic. About a quarter said it will lead to pay cuts, and the same number said it will lead to layoffs/furloughs.