Digital health (2024)

1. Reimbursement issues still scuppering startups

   Through Germany’s DiGA initiative, doctors in the country can now prescribe health apps to the country's 83m residents, with insurers picking up the tab. France has created a similar programme called ETAPES, covering 55 digital health apps, and Belgium has mHealth, which covers 30 apps.

   While DiGA was lauded as a catalyst for digital health, a Sifted analysis discovered that slow processes have dogged the programme — and some startups have failed after negotiations with insurers left the startups owing millions of euros. Hamburg’s Aidhere for example filed for insolvency in 2023 after negotiations with insurers dragged on for 18 months and a VC deal fell through, while Berlin’s Newsenselab met with a similar fate in 2022.

2. Data privacy and cybersecurity concerns grow

   The surge in online care has created new data privacy and cybersecurity risks. While new tools can help patients leave hospitals earlier and recover at home through remote monitoring, there is concern that hackers could seize control of these devices and manipulate readings or dosages.

   Research by IoT provider SOTI finds that 79% of UK healthcare organisations have experienced at least one data breach since 2021. Additionally, 88% of health IT professionals have expressed concerns over data security.

   The ransomware attack on the Irish health system in 2021 and a similar attack on the UK’s in August 2022 are further stark reminders of the risks involved with digitised care.

3. Scaling struggles

   Taking your tech to multiple countries is the goal of most startups. But efforts to scale digital health tools face significant challenges due to variations in reimbursement policies, language barriers and regulatory timelines — a case in point being French startup Doctolib, which has struggled to bring its offerings to Germany.

4. Mental health getting more attention

   Nearly half of all young people lack mental health assistance, according to EU survey data. A Eurobarometer poll from 2023 revealed that 46% of the EU population had encountered emotional or other mental issues in the preceding year.

   It’s for this reason that use of digital mental health tools is gaining traction — 40% of apps featured on Germany's DiGA list focus on mental health.

   Among the recent raises for mental health startups: Berlin-based Likeminded netted €7.4m in 2023 to expand its business-to-business services, while HelloBetter, another Belin startup, raised a €12m Series A.

5. AI’s fast improving bedside manner

   AI boosters say their systems will soon become clever doctor sidekicks. Already, some tools on the market are helping to settle diagnoses, as in Danish AI startup Corti’s case, or aid drug development and disease detection.

   But we shouldn’t expect superintelligent powers just yet. Talk to doctors and many will tell you they’d prefer help with tedious problems like paperwork.

   So we will see more startups this year in the vein of Paris-based Nabla, which last week announced it had raised $24m for its AI tool, which listens in to clinical consultations and drafts notes that summarise key elements of the interaction.

Who early stage startups are up against