The biggest take-away from Fenwick's third annual Digital Health Investor Summit is that the industry is starting to mature – or as Xconomy put it, More Dollars, Fewer Bracelets.

The widely reported 'end of wearables' was interpreted as a sign of an evolution in the sector from froth to substance. Malay Ganhdi, Managing Director at Rock Health, cited Omada Health as an example of a new class of digital therapeutics companies that provides clinically validated results, which patients or providers will ultimately pay for.

While investment in the sector continues to hit new highs with each quarter, Malay argued that we are not in the midst of a digital health bubble. He noted that the digital health investor community is showing signs of coalescing: 27 venture firms did three or more deals in 2013 compared to only eight in 2012, and 'dabblers' (who have done only one investment each) are graduating to the ranks of serial investors – all signs that the sector continues to grow and mature. He also noted that the post-IPO performance of recent digital health debuts has been stable.

The rest of the speakers reinforced the message that the sector is focusing on delivering measurable value.

Professor James Robinson from the Berkeley Center for Health Technology talked about the definition of value in the healthcare industry from a macroeconomic point of view. He concluded that the key for defining value had long been the FDA: if you get it approved, the market will come. These days, in a post ACA world, the focus has been on coverage policies. He explained that is now shifting to adoption by providers as provider payment and performance measures evolve. Eventually the consumer will be king as engagement becomes essential and cost-sharing inevitable.

But cost-sharing is problematic, as Casper de Clercq of Norwest Venture Partners pointed out: consumers will drive initial adoption of digital health, but someone else will need to adopt and pay for the valuable stuff. Casper noted that achieving lasting adoption is difficult, fickle, and very vulnerable to friction. On the other hand, insight, empowerment, social validation and a dose of dopamine can have an addictive effect that drives engagement.

Nina Kjellson from InterWest was not deterred by these challenges. She explained that an aging and physically inactive population, combined with a broken healthcare system, creates opportunities. She added that the needs of aging Baby Boomers and the preferences of Millennials, the generation that came of age using digital tools, will drive digital health adoption.

Skip Fleshman of Asset Management Ventures emphasized that in the new world of digital health, it will be common for exits to occur across industries. Examples include apparel company Under Armour buying MapMyFitness and the acquisition of wearable company Basis by Intel. He noted, "You don't know who is going to buy what."

And on the topic of exits, one of the final speakers was Peter Hudson who recounted his sale of iTriage to Aetna. Peter provided an excellent case study of how to build to sell, emphasizing that the exit strategy begins at the company's inception. He noted that it was important that entrepreneurs start with a problem to solve instead of an idea to nurture, and that they develop and articulate a clear and consistent vision at all times.

To view video click here.

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