Crain's Health Pulse: Investment in digital health companies during pandemic surpasses 2019 total

In the first seven months of this year, 70 digital health companies in the city raised $1.5 billion, surpassing the $1.2 billion raised in all of 2019, according to a report released today from New York City Health Business Leaders and AlleyCorp, an early stage venture fund and incubator.

The finding comes as telehealth, home health and virtual care have become the norm during the pandemic, the groups said.

"Covid has only heightened the need for more efficient health care, different kinds of delivery and more equitable health care," said Bunny Ellerin, president of NYC Health Business Leaders. "If investors are looking for good companies to place money in, it makes sense in that vein."

Digital pharmacy services was the largest area of investment, with companies in that space accounting for 25% of the haul. Companies focusing on patient engagement accounted for 22%, followed by those specializing in insurance (15%), analytics (13%), provider tools (9%), social determinants of health (8%) and women's health (7%).

The groups said the more than $100 million invested in social determinants of health is expected to increase, given the health care disparities that have been magnified by the pandemic.

Earlier this year, Crain's reported that a bevy of local health-tech firms were seeing increased inbound interest and business opportunities as a result of the public health crisis.

The report found that regulatory and reimbursement changes have cemented the widespread adoption of telehealth and virtual care services, which are expected to be here to stay.

The authors concluded that, from both an investor and employer standpoint, mental health and wellness will be key priorities going forward. In addition, they found that consumer health companies are advancing on a large scale. —Jennifer Henderson