Health care reform and the opportunities for startups

A key provision of the Affordable Care Act is going into effect as statewide insurance exchanges opened up around the country.

But thats just the latest in a series of changes to theU.S. health care system that will open up new opportunities for entrepreneurs.

With the passing of theHealth Information Technology for Economic and Clinical Health (HITECH) Actin 2009, doctors got new incentives to move from paper-based to digital systems. As a result, investors poured funding into new electronic medical record providers, like CareCloud and Practice Fusion.Since then, doctors use of electronic systems has shot up in May, the department of Health and Human Services announced that doctors and hospitals use of health IT has nearly doubled since 2012.

Smart entrepreneurs are paying equally close attention to the Affordable Care Act (ACA, also known as Obamacare). Weve already seen new companies form to offer private health insurance exchanges so consumers can shop for affordable care. These exchanges are open for business today, Oct. 1, enabling individuals to sign up online, by phone, or in-person, with health insurance coverage starting next year.

However, top health investors are thinking about the long-term impacts of the ACA, the biggest expansion in coverage in nearly 50 years. I caught up with investors from Emergence Capital, Venrock, Kleiner Perkins Caufield & Byers, and Google Ventures at a health IT dinner earlier this week to discuss new opportunities for health-tech entrepreneurs.

Heres what these expert investors think are the hot areas for health-tech startups to focus on.

A Boston-based health care system, Partners Healthcare, invested ina new suite of devices and tools to monitor patients at home and on the go. The connected health program was an expensive endeavor, but Partners reported promising early results.

Partners may be among the first to experiment with a connected health initiative, but it certainly wont be the last. The goal of the ACA is to help hospitals move from volume-based care to value-based care, meaning that doctors wont make money by ordering expensive tests. Instead, physicians will be motivated to keep patients healthy and prevent readmissions to the hospital.

Doctors in the Partners network use new devices that can track and monitor patients at home. According to a recent estimate by Rock Health, investors have already poured $102 million into the development of these new devices.

Entrepreneurs are building some seriously cool devices totrack body metrics, like a patients blood pressure and heart rate. Patients with chronic conditions, like diabetes, are purchasing glucometers, blood pressure cuffs, smart Wi-Fi scales, and pulse oximeters. Check out InformationWeeks list of the most promising remote patient monitoring devices.

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Health care reform and the opportunities for startups

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