Culling the Health Tech Herd

The threat of economic cataclysm is in the air, following the failures of Silicon Valley and Signature banks.

For digital health companies, the growing sense of gloom follows a bleak 2022 during which venture capital investment in them fell by more than half, according to a report from industry analyst Pitchbook.

The biggest problem? Companies are under budget pressure and spending less on employee benefits.

Similarly, health systems are buying less technology as they continue to navigate financial challenges. Labor costs are up and patient volume is down, making operating margins tighter than ever, reports management consulting firm KaufmanHall.

“What a hospital or health system is willing to buy is a pretty narrow set of products,” said Rebecca Springer, who authored a report on the health tech market and is a senior health analyst at Pitchbook.