News Feature | February 2, 2015

Health IT Funding Doubled In 2014

Katie Wike

By Katie Wike, contributing writer

Making Revenue Cycle Solutions Accessible To Your Clients

From $2 billion in 2013 to $4.7 billion last year, digital health funding is skyrocketing.

Mercom Capital Group has found funding for digital health more than doubled from 2013 to 2014. According to the report, in 2013, $2 billion was spent on health IT. In 2014, $4.7 billion was spent on the same. The technologies that were most invested in include, according to iHealth Beat:

● clinical decision support, with $517 million

● data analytics, with $367 million

● population health management, with $247 million

“The healthcare IT sector had another phenomenal fundraising year,” Raj Prabhu, CEO and co-founder of Mercom Capital Group, said in a statement. “In the five years since we started tracking funding data, the sector has raised $8.8 billion in VC funding and another $3.6 billion in public market and debt financings bringing the total to $12.4 billion – largely driven by the HITECH and Affordable Care Act. However, the enthusiasm in the sector shown by the VC community was not quite matched by the public markets when you look at market performance of companies that went the IPO route in 2014.”

Healthcare Informatics reports mHealth venture capital funding reached $1.2 billion, most of which went to wearables with $526 million and mHealth apps with $507 million. Telehealth companies received $369 million.

There were 219 health IT mergers and acquisitions in 2014. In 2013, that number was only 165. Revenue cycle management companies experienced 28 merger and acquisition transactions, while practice management companies experienced 28; and mobile health companies experienced 21 merger and acquisition transactions.

Another report says that $4.7 billion might be an underestimate. EHR Intelligence reports that a report from StartUp Health placed that number at $6.5 billion. The article notes, however, that despite the difference in numbers, both reports agree that “big data analytics, population health management, and consumer-focused engagement technologies are being heavily sought after by venture capitalists, which are willing to invest large sums in the success of novel ideas.”