Near-record funding and a string of public offerings have led to substantial buzz for the digital-health arena. Still, many of the areas ripe for disruption in medicine aren’t necessarily the sexiest or the most hyped. They’re the nitty-gritty problems, those which may go unnoticed by the vast majority of entrepreneurs but whose solutions help patients seamlessly negotiate a fragmented health system.

Take Amazon’s second acquisition in healthcare, a technology and services outfit called Health Navigator. The 12-person outfit, founded by an emergency medicine doctor, provides the clinical content that underpins certain digital health processes, like online symptom checkers and triage tools, according to CNBC, which first reported the news Wednesday. 

An Amazon spokesperson confirmed on background that Health Navigator will become part of Amazon Care, its employee offering designed to offer fast access to healthcare services without an appointment, when and where it’s convenient for staffers. The service connects employees and their family members to a physician or nurse practitioner  through live chat or video, with the option for in-person follow-up services from a registered nurse, the spokesperson added. 

Health Navigator’s content for medical taxonomy is used by other makers of consumer-facing tech seeking to route patients to where they need to go. In other words, it doesn’t make the chatbots and symptom checker apps; it makes the tech that powers them. 

That makes it emblematic of the kinds of startups getting enough traction to go public or get bought, says Mark Bard, founder of the Digital Health Coalition. That is, boring is still important.

“It’s a lot more fun to talk about chatbots, but if you look at where the activity is, it’s a lot of  ‘how do you apply technology to data to help make better decisions,'” said Bard. “And that sums up a lot of what’s out there.” 

In the third quarter, some 43 investment deals totaling $688.2 million were focused on clinical workflow, according to Startup Health, which tracks such deals internationally.

Certainly not all exits and IPOs, nor firms that snared large amounts of the billions invested in venture capital so far this year, fit that description. Other areas like wellness, research and patient empowerment drew more funding. 

Among the five IPOs in digital health so far in 2019 is Livongo, a chronic condition management platform offered by employers and health plans; Phreesia, whose wares include applications to help healthcare organizations manage the patient-intake process; Health Catalyst, a maker of data and analytics technology and services; and Change Healthcare, which offers revenue cycle management, payment management and health information exchange (HIE) solutions.

It’s on the private markets where things get a little more buzzy. Digital health companies raised $1.3 billion in venture capital in the third quarter, for a total of $5.5 billion year to date, and are on track to raise an estimated $7.3 billion by the end of the year, according to Rock Health. That’s 1.3 times more than 2017, though short of the record $8.3 billion Rock measured in 2018. 

Many of these players are, more or less, in the forefront of the healthcare ecosystem. Capsule, an online pharmacy offering same day delivery in New York City, raised $200 million in September to expand its service across the U.S., the largest of the U.S. digital-health funding deals on the private market, according to Startup Health. (The biggest outside the U.S. was population-health company Babylon Health’s $550 million raise.) 

Capsule enables patients to gain access to care while also empowering them to get their medications. The deal constituted the lion’s share of $420 million invested last quarter into health innovation companies with a focus on patient empowerment, a category which Startup Health defines as any type of technology that enables a patient to improve their own health. 

That level of investment shows “the soul of the health revolution—the patient—is still a market priority,” according to the group’s third-quarter funding report.

The fact that $420 million was invested within that space “is fantastic,” added Polina Hanin, portfolio director at StartUp Health, “because [such companies] allow the patient to be much more proactive with their health.” 

The deal also put Capsule into contention with online pharmacy PillPack, which Amazon bought last year for just under $1 billion. Analysts expect Amazon to leverage this toehold to continue building out Rx licenses for PillPack’s pharmacy in all states where it’s not yet operating, although the company has hit some resistance from entrenched competitors.

One of the other big investment areas of the third quarter, according to Startup Health, was women’s health. Over the course of this year, about $300 million has been invested in companies focused on this space, up 66% from the same time last year, with a 65% uptick in deal volume.

Top deals there include $52 million for Nurx, which offers online access to medical providers and home delivery of birth control, as well as home HPV testing and the HIV prevention medication PrEP; and $51 million raised by Pill Club, an online prescription and delivery service for birth control and contraceptives.

It’s the second quarter in a row that women’s health has been one of the highest funded of Startup Health’s “moonshots,” 11 big health goals it’s identified. For now, deals involving women’s health are nowhere as large as those seen among firms seeking to boost access to care, who have raised $4.5 billion year-to-date, or among those in the “cost to zero” moonshot, who have attracted $3.5 billion in private equity or venture capital monies.

“It’s a pity,” said Hanin, “that there are not that many companies exclusively focused on women’s health, being that we’re 50% of the population.” Then again, the cost-to-zero and access-to-care companies are starting to incorporate women’s health into the way they deliver care. Ditto for some of the other less heavily funded moonshots.

“People are starting to see the power of collaboration and the fact that this is not a zero-sum game,” Hanin said. “There are so many challenges that we have yet to solve that, if we start to think of the future as bigger than our past and bigger than our present, then there’s going to be plenty of room for innovation to take hold.”

I spoke with a number of other analysts and pundits about why so much private money is pouring into digital health, what’s getting funded, and who’s getting enough traction to get bought or go public. In a couple of weeks, I’ll report on what I found in a feature for the December print edition of MM&M. 

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