Graham Watson, executive chair of Scottish Health Innovations, considers fresh opportunities around heightened innovation which the pandemic has catalysed.
By any yardstick, 2020 was a pivotal year for healthcare in the UK.
The Coronavirus pandemic upended UK healthcare as we knew it, highlighting multiple NHS and care home challenges, but also delivering unexpectedly disruptive benefits with long-term significance.
Certainly, transformational change in the healthcare sector has accelerated markedly in recent months in line with a global health emergency demanding faster, more effective solutions.
The unprecedented speed of vaccine development and regulatory approval was matched by large-scale testing and vaccination delivery, alongside unprecedented demand for ventilators and PPE, the likes of which the UK has never attempted before.
At the same time, unrelenting focus on the NHS and care homes, and counterpart organisations around the world, has corresponded with record levels of investor interest, leading to an all-time high in fundraising, not to mention some eye-catching mergers and IPOs.
Investors and other industry insiders have maintained that the pandemic, for all its devastation and upheaval, has inspired incredible progress – some even suggesting it has pushed the healthcare industry forward a decade in just six months.
Indeed, global investments in healthcare startups set a new record in 2020, reaching $80.6 billion in equity funding. A recent report from research firm CB Insights said this was raised in at least 5,500 deals, with growth seen across North America, Asia and Europe.
According to the report, healthcare funding trended up throughout the year, growing for the three consecutive quarters after the pandemic hit in early 2020.
Notably, digital health funding globally went up by 45% over the previous year, while equity funding to digital health companies hit an all-time high last year, reaching $26.5 billion.
The pandemic has undoubtedly brought about a surge in interest in telehealth, where before it was a challenge. In the USA for example, J.D. Power found that only 10% of consumers used telemedicine in 2019. However, when the pandemic hit, patients and clinicians suddenly saw the flexible benefits of telehealth in a new light.
Closer to home, Scotland successfully introduced Near Me virtual consultations. In February 2020, there were around 300 Near Me video consultations per week. By June, this figure had reached 17,000 per week, and this high level of use has been maintained ever since.
Simultaneously, patient expectations have grown in recent years, driven by developments in other sectors. Indeed, new data-driven technologies are inspiring heightened digitisation and automation more generally. Traditional challenges are increasingly being overcome by new technological breakthroughs from start-ups, underpinned by greater interconnectivity.
As we slowly begin to see light at the end of the pandemic tunnel, we can perhaps then look forward to a more open environment where innovation in healthcare, rapid development of promising ideas, and early adoption of potential new technologies within the NHS become the established norm.
Against this backdrop, it should come as no surprise then that the healthcare sector is an increasingly attractive prospect for aspiring entrepreneurs and investors to focus their attention. Aside from the clear opportunity to serve the needs of an ageing population and help those struggling with the rising prevalence of chronic disease, the global healthcare industry is booming and is projected to be worth over $10 trillion by 2022 and to grow at a compound annual growth rate of 5% between 2019 and 2023.
Trends accelerated by the pandemic are likely to continue. Technology-enabled patient engagement strategies such as mobile apps are facilitating increased involvement for patients in their healthcare decisions, in addition to improving the efficiency of interactions with the NHS. We see this first-hand in Scotland with successful implementation of apps in COPD, dermatology and diabetes to name a few, with the models of data collection and integration with NHS systems deployed in these initial projects being applicable to multiple other disease areas, including stroke and heart disease.
Improving the health of the population is a unifying goal, requiring constant review of broader trends, as well as consideration of new care models and technologies that address the drivers of health, enable early diagnosis, and monitor response to treatment. The opportunity is clear, but a stronger investment landscape in Scotland is needed to make this a reality.
At Scottish Health Innovations (SHIL), we recognise the scale of both the challenges and the opportunity and work to minimise financial barriers to accelerating NHS-led innovation. We pride ourselves on our ability to bring innovations to market in investor-ready form and have established a unique position as a two-way interface between the funding market and the NHS in Scotland.
We work hard to attract and maintain investment in NHS-led innovation – particularly recent investments in Aurum Biosciences and Clear Surgical – support targeted expansion into new markets with the dual benefit of improving patient care in both Scotland and globally, but also to generate meaningful financial returns for the NHS. It is a model that benefits Scotland’s economy and health and wellbeing priorities.
In our soon-to-be launched Strategy 2021-2026, SHIL will continue to support and encourage an open and receptive environment to innovations originating across Scotland. We will work actively across the sector to minimise all barriers – systemic, financial or otherwise – to ensure innovations of substance and scale can be expedited onto the market.
We will also work proactively with partners across the NHS to identify specific challenge areas and facilitate targeted innovation calls to help advance solutions in areas of greatest need. These will be supplemented by the launch of a Healthcare Accelerator Fund, ensuring suitable projects can access early-stage funding to assess feasibility, which in turn can open up greater future funding options. The goal of the fund will be to identify a balanced portfolio of opportunities that, with appropriate interventions and support, can accelerate the healthcare innovation ecosystem in Scotland past its tipping point.
If modern healthcare innovation is to continue to grow at pace post pandemic, then having an optimal investment ecosystem is vital to encouraging its advancement.
More on this will be shared at a virtual event taking place on 4 March, entitled Healthcare Innovation Live – Maximising The Future of Life Sciences and Healthcare.
The event brings together investors and the Scottish Government’s Lead for Investment to inform the strategy behind its forthcoming Investment Plan launch – which will have a life science chapter as a core growth sector - and consider how best to support the investment community in relation to life sciences.
