According to Cheryl Cheng, the CEO and founder of Vive Collective, the investment focus in health IT is expected to rise, with the potential for conceptual AI to transition from excitement to actual implementation, and mergers and acquisitions becoming a common strategy for startups in 2024.
The upcoming wave of next-generation online health and wellness technology firms will leverage the innovative investment platform provided by Vive Collective. Through collaborations with care and technology experts, the company aims to nurture high-growth digital health enterprises.
Cheng recently discussed the upcoming trends and shared her insights with Healthcare IT News.
Q.. You suggest that medical CIOs and other healthcare IT leaders should monitor IT spending in the upcoming year. What is the rationale behind this advice?
A. Key medical stakeholders, health systems, and payers are expected to resume investing in software solutions. Following a period of workforce adjustments and reorganizations, organizations may recognize the need for technology to bridge the gaps resulting from staff reductions.
While a sudden surge of investment across the industry is not anticipated, there will be a gradual increase in funding opportunities, allowing larger firms to address gaps in their IT infrastructure. This shift signifies a positive outlook for companies moving forward.
Q. Artificial intelligence has been a prominent topic in the past year. What developments are expected in this area?
A. The year 2024 is projected to witness the convergence of expectations and reality regarding applied artificial intelligence. The initial hype surrounding AI will subside as stakeholders focus more on the underlying mechanisms, data sources, compliance issues, and ethical considerations associated with AI applications. Despite this, investments in conceptual AI and its practical applications will persist.
The healthcare industry is increasingly acknowledging the potential of conceptual AI to enhance various processes like billing, patient interactions, and administrative tasks. However, challenges related to patient data privacy and sharing practices remain unresolved.
As technology advances rapidly, policymakers are striving to keep pace with the latest innovations, indicating a sustained trend in this direction.
Prominent healthcare systems with substantial resources will likely internalize AI development to leverage their expertise and create innovative AI solutions. This shift is expected to further differentiate the scientific and operational capabilities of large and small healthcare systems.
Q. You mentioned that mergers and acquisitions will play a significant role in 2024. What can we expect in this domain?
A. With the increasing venture capital funding in digital health compared to previous years, mergers and acquisitions are poised to become a prevalent strategy for companies. The deal landscape might witness a bifurcation, with a few major transactions alongside numerous smaller-scale deals.
In 2024, smaller startups, including early to mid-stage companies facing funding challenges, may experience acquisitions. However, exit valuations are likely to be moderated compared to previous years, emphasizing realized revenue over projected figures.
There is a growing demand for operational and executive expertise, especially from firms adept at navigating the complexities of the healthcare sector.
The trend of consolidating platforms or merging stage-specific solutions to create robust offerings is expected to accelerate. This shift towards integrated platforms aligns with buyers’ preferences for comprehensive solutions over fragmented offerings, particularly due to resource constraints on the customer side.
