There’s good news and bad news for digital health care startups,according to a report by consulting giant Accenture. The bad newsis that half of them will fail within their first two years ofexistence. The good news is that even startups that don't make itcan help develop the skills of talented entrepreneurs and workers,whose ideas can be of use to bigger companies.


The report estimated that $2.5 billion will be invested inhealth technology start-ups during thenext two years across the following segments:

  • engagement (25 percent),

  • treatment (25 percent),

  • diagnosis (21 percent)

  • and infrastructure (29 percent).

In the traditionally conservative realm of healthcare, many big players are starting to recognize thatacquiring startups is a good way to injecttheir companies with some much-needed innovative spirit.


“Many digital start-ups that are dying or in danger of failurehave developed solutions that can help traditional andnon-traditional health care companies achieve their goals,” saidKaveh Safavi, managing director for Accenture’s global health carebusiness.


The report is based on an assessment of health startups foundedbetween 2008 and 2013. Of the nearly 900 startups Accentureexamined, just over half had received less than $50 million duringthe timeframe and had not acquired any money in at least the past20 months.


Accenture designated such companies "zombies," ripe to be boughtat a low cost and plundered for whatever talent or products theyhave developed. Whether through potential leaders or theintellectual property rights to a new device that hasn't had enoughmoney behind it to truly flourish, zombies can be a big asset forhealth care companies, the report says.


"From wearables/nearables and telehealth toremote monitoring and on-demand services,” the report states,“innovative market offerings are diverse and potentially gamechanging for health care providers, payers, patients and evennon-traditional health care stakeholder."


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