Association of the Meaningful Use Electronic Health Record Incentive Program with Health Information Technology Venture Capital Funding

Samuel  Lite; William J. Gordon; Ariel Dora Stern

Article | JAMA Network Open

Association of the Meaningful Use Electronic Health Record Incentive Program with Health Information Technology Venture Capital Funding

by Samuel Lite, William J. Gordon and Ariel Dora Stern

Abstract

IMPORTANCE
Although the Health Information Technology for Economic and Clinical Health (HITECH) Act has accelerated electronic health record (EHR) adoption since its passage, clinician satisfaction with EHRs remains low, and the association of HITECH with health care information technology (IT) entrepreneurship has remained largely unstudied.

OBJECTIVE
To determine whether the passage of the HITECH Act was associated with an increase in key measures of health care IT entrepreneurship.

DESIGN, SETTING, AND PARTICIPANTS
This economic evaluation of venture capital (VC) activity in the US from 2000 to 2019 examined funding trends in health care IT, EHR-related companies, and all VC investments before and after the passage of HITECH. A difference-in-differences analysis compared investments in health care IT companies with those of companies in 3 categories: general health care (non-IT), IT (non–health care), and all US VC transactions. Data were analyzed from September 2018 to August 2019.

EXPOSURES
Venture capital funding received by US companies before and after the HITECH Act.

MAIN OUTCOMES AND MEASURES
Venture capital investment in health care IT companies and the proportion of those investments going to seed-stage companies, a proxy for very early-stage entrepreneurship and innovation.

RESULTS
The data included 70 982 investments, of which 9425 (13.3%) were seed stage, 10 706 (15.1%) were early stage, and 50 851 (71.6%) were growth stage. After passage of the HITECH Act, investment in both health care IT companies and EHR-related companies increased at a rate much faster (13.0% and 11.4%, respectively) than VC as a whole (6.9%). In addition, the proportion of investments going to seed-stage health care IT companies increased compared with both overall VC investments and non-IT health care investments. Health care IT companies saw increased probabilities of transactions being seed-stage of 5.1% (SE, 2.2%; 95% CI, 0.8% to 9.3%; P = .02) compared with the entire sample of VC transactions and 13.6% (SE, 1.9%; 95% CI, 9.9% to 17.2%; P < .001) compared with non-IT health care VC transactions. Health care IT had essentially 0 increased probability of a transaction being seed stage compared with IT companies outside health care (−0.8% probability; SE, 2.4%; 95% CI, −5.4% to 3.9%; P = .75).

CONCLUSIONS AND RELEVANCE
Although widespread clinician dissatisfaction with EHR systems remains a challenge, the HITECH Act’s incentive program may have catalyzed early-stage entrepreneurship in health care IT, suggesting an important role for incentives in promoting innovation.

Keywords: Health Care and Treatment; Information Technology; Laws and Statutes; Innovation and Invention; Entrepreneurship; Venture Capital;

Format: Print

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Citation:

Lite, Samuel, William J. Gordon, and Ariel Dora Stern. "Association of the Meaningful Use Electronic Health Record Incentive Program with Health Information Technology Venture Capital Funding." JAMA Network Open 3, no. 3 (March 2020).

In 2019, the co-founders of the Swedish medical start-up 1928 Diagnostics, CEO Dr. Kristina Lagerstedt and COO Dr. Susanne Staaf, had to pick the right business model to commercialize their novel technology to hospitals and health care providers. Developed in partnership with research hospitals to help fight the global antibiotic resistance crisis, the firm’s cloud-based technology platform helped partners identify resistant genes and mutations in bacteria more quickly and accurately, allowing for easier outbreak cluster tracking in support of hospital infection control management, as well as better diagnostics and antibiotic selection. By 2019, they had raised $5 million, employed 16 people, and had their tool deployed at 24 partner sites in 10 different countries. Their decisions on which markets to focus on and with which business model would crucially impact the young firm’s chances at successfully converting existing users and attracting new clients.

Emerging gene therapy and gene-editing technologies will have a growing impact on patient lives and health-care delivery. We analyzed a decade of data on clinical trials and venture capital investments to understand the likely trajectory of genetically focused therapies in the years ahead. The number of clinical trials and venture capital deals increased substantially from 2006–2017. We observed particularly notable growth in both industry-sponsored trials and trials involving specialty fields of drug development, including oncology, neurology, hematology, ophthalmology, and neurology. As the number of gene-therapy and gene-editing technologies continues to grow, we expect that such therapies will have a significant and heterogeneous impact on health-care delivery, including a shifting of resources from chronic disease management to more intense acute episodic care, an increase in the complexity of required intellectual property and manufacturing know-how, and the potential expansion of biopharmaceutical companies into service-based business models.

Article | JMIR mHealth and uHealth | July 21, 2020

Assessing Food and Drug Administration's Risk-Based Framework for Software Precertification with Top U.S. Health Apps: Quality Improvement Study

Noy Alon, Ariel Dora Stern and John Torous

BACKGROUND:As the development of mobile health apps continues to accelerate, the need to implement a framework that can standardize categorizing these apps to allow for efficient, yet robust regulation grows. However, regulators and researchers are faced with numerous challenges as apps have a wide variety of features, constant updates, and fluid use cases for consumers. As past regulatory efforts have failed to match the rapid innovation of these apps, the United States Food and Drug Administration (FDA) has proposed that the Software Precertification (Pre-Cert) Program and new risk-based framework could be the solution. OBJECTIVE:The objective of this study was to determine if the risk-based framework proposed by the FDA's Pre-Cert Program could standardize categorizing top U.S. health apps. METHODS:In this quality improvement study during the summer 2019, the top 10 apps for six disease conditions (addiction, anxiety, depression, diabetes, high blood pressure, and schizophrenia) in the United States Apple iTunes and Android Google Play Store were classified using the FDA's risk-based framework. Data on the presence of well-defined apps features, user engagement methods, popularity metrics, medical claims, and scientific backing were collected. RESULTS:The FDA's risk-based framework classifies an app's risk by the disease condition it targets and what information that app provides. Out of the 120 apps tested, 95 apps were categorized as targeting a non-serious health condition, while only seven targeted a serious condition and 18 apps targeted a critical condition. Since the majority of apps targeted a non-serious condition, their risk categorization was largely determined by what information they provided. The apps that were assessed as not requiring FDA review were more likely than those assessed as requiring review to be associated with the integration of external devices (15/58, 26% vs. 5/62, 8%; P=.03) and health information collection (24/58, 41% vs. 9/62, 15%; P =.008). Apps exempt from review were less likely to offer health information (25/58, 43% vs 45/62, 72%; P <.001), to connect users with professional care (7/58, 12% vs 14/62, 23%; P =.04), and to include an intervention (8/58, 14% vs. 35/62, 55%; P <.001). CONCLUSIONS:The FDA's risk-based framework has the potential to improve the efficiency of the regulatory review process for health apps. However, we were unable to identify a standard measure that differentiated apps requiring regulatory review from those that would not. Apps exempt from review also carried concerns regarding privacy and data security. Before the framework is used to assess the need for formal review of digital health tools, further research and regulatory guidance are needed in order to ensure that the Pre-Cert Program operates in the greatest interest of the public health.

Citation:

Alon, Noy, Ariel Dora Stern, and John Torous. "Assessing Food and Drug Administration's Risk-Based Framework for Software Precertification with Top U.S. Health Apps: Quality Improvement Study." JMIR mHealth and uHealth (July 21, 2020). View Details

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Association of the Meaningful Use Electronic Health Record Incentive Program with Health Information Technology Venture Capital Funding

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