With Record Level of Health Care Tech Spending in Q1, Israel Makes Strides in US Market
$9 billion was spent globally on health care infrastructure in the first three months of 2021.
With a record-breaking amount of money spent on health technology companies in the first quarter of 2021, and most of it spent in the United States, Israeli companies made great inroads in what is easily its most important market.
According to a recently released report by CB Insights, a company that provides data analysis on the tech market, titled “State of Healthcare Q1’21 Report: Investment & Sector Trends To Watch,” global health care funding hit a new quarterly record, with a total of $31.6 billion from January to March. Health technology companies also secured a record high of over $9 billion dollars in the first three months of this year. Of over 130 deals involving electronic health services, 72 were made in the United States.
One Israeli startup making inroads is Aidoc, which signed a deal with the largest radiologists’ network in the US, Radiology Partners, with a presence in one-tenth of all American hospitals. Using artificial intelligence, Aidoc’s technology is able to automatically check images on the lookout for the most catastrophic health conditions, informing the radiologist immediately when it discovers such a case.
According to Ariella Shoham, vice president of marketing at Aidoc, the US is an extremely competitive market for health care technology.
Shoham says that Aidoc, like other Israeli companies, has a competitive edge due to Israeli society and the influence of the military.
“I think the Israeli culture, especially the military environment, gets us up and running in a more aggressive, strategic manner and I think that helps us overcome the mainstream way of approaching things in the US,” she told The Media Line. “It’s in our DNA: this constant trying to understand how to overcome obstacles and how to approach things differently.”
I think Israel is going to continue to be a fast adopter and the US is going to catch up
Still, Israeli health tech companies face challenges in the US market.
Shoham says one of the major trials is overcoming the outsized influence the big tech companies have on providers.
“Israel is very receptive to startup culture. The US is very centralized with east and west coast technology hubs. When you leave those bubbles, there are very large players that have already solidified their name and their brand,” she said.
The major challenge, she adds, is “to overcome the brand names and have people take that leap of faith and actually want to pay for a solution.”
Aidoc’s technology is already in use at all the major hospitals in Israel, which highlights how quickly the Jewish state adopts health care technology.
Shoham says that Israel is one of the world leaders in its use of health care technology, particularly in the area of electronic medical records.
“America still does not have a consolidated approach to health records, there’s a big concern about sharing health records,” she said. “That’s going to make it more challenging to adopt technology, for sure.”
Shoham foresees that Israel will continue to take on these tech approaches to health care over the next five years.
“I think Israel is going to continue to be a fast adopter and the US is going to catch up,” she said, adding that the coronavirus has only sped this up with the adaptation of telehealth and e-medicine.
Some health care tech is used by consumers directly. The Israeli company DayTwo has created an app that allows users, particularly those with diabetes, to input what they are going to eat, after which the technology determines the estimated impact on blood sugar, taking into account the bacterial composition of the subscriber’s gut microbiome based on an at-home test.
“This week we heard about a user of a DayTwo program in Michigan who canceled surgery to shorten her stomach; It feels like we are creating a product here with meaning. It becomes even more valid during the corona period when diabetes is known to be a background disease with a very high correlation to the severity of the epidemic,” Adi Lev, vice president of research and development at DayTwo, said in a statement.
Israel and the US health care technology markets also differ because the two countries have divergent approaches to health insurance.
“I think that the fact that Israel has public health care enables decisions to be made faster, to begin with. Because of the government-sponsored insurance, there is a need to make information accessible wherever you go as a patient in Israel,” Shoham said.
The fractured, mostly private health care system in America with different doctors that are or are not covered based on a health insurance company makes it more difficult to institute the digitalization of health records to which all the relevant doctors have access.
Meanwhile, DayTwo CEO Lihi Segal points out that, according to Kaiser Family Foundation, 49% of the US population receive their health insurance through their employers. This makes working directly with the employers and private health insurance companies critical to success for health tech companies.