More VC firms investing in health IT

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As the healthcare sector consolidates, science and tech companies are increasingly seeing the value of investing in healthcare IT.

One of them, the Pittsburgh Life Sciences Greenhouse (PLSG), an investment firm which helps entrepreneurs build life sciences companies, has invested nearly $2 million in the health IT realm.

Investors are looking for tech that goes beyond the usual programs to connect doctors, insurers and hospitals, reports the Pittsburgh Post-Gazette.

For example, PLSG invested in a software records company that allows dieticians to keep tabs on patients by tracking their grocery store purchases; sensors to monitor senior citizens remotely; and a small company working on patient care tracking to reduce hospital readmissions.

John Manzetti, CEO of PLSG noted that venture capital funding for life sciences has diminished in the past few years--but health IT is a safer bet.

Meanwhile, venture capital funding for health IT in the second quarter of 2013 is already equal to 2012's record-breaking total, a July report from Mercom capital found. With $623 million raised, there were 168 funding deals this quarter compared to 104 the previous quarter, and 163 total in 2012 totaling $1.2 billion. There was a considerable shift of VC money moving away from practice-focused technologies toward consumer-focused technologies. 

With diminished resources available, investing in IT looks safer and cheaper.

"Digital health [is] an easier way to play in this game," Stephanie Marrus, director of the Entrepreneurship Center at the University of California, San Francisco, told the Post-Gazette.

If someone can build a new health app, they can "escape the challenges of developing a new drug," Marrus said.

To learn more:
- read the Pittsburgh Post-Gazette article

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