Rodney Fernando

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Large Incumbents x Healthcare Q1 2024

Quarterly Tech x Retail x Healthcare Hero Image

Healthcare activities of Big Tech and retail players in Q1 2024

Tech & retail giants in healthcare (Q1 2024): Big Tech forges ahead, cashing in on AI revolution

<div>
 <ul>
 <li>
 
 Overall activity witnessed a slight dip during Q1 2024. 
 
 </li>
 <li>
 
 The AI revolution continues to fuel collaborations among Big Tech. 
 
 </li>
 <li>
 
 Investment activity slowed and M&amp;A activity remained muted. 
 
 </li>
 </ul>
 
 
</div>

<div>
 <ul>
 <li>
 
 Overall activity witnessed a slight dip (30 activities tracked in Q1 2024 vs. 36 tracked in Q4 2023)
 : In particular, after a notable rebound during Q4 2023, activities among retailers slowed during the quarter, accounting for only 10% of all activities tracked (down from 33% during Q4 2023).
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 <a href="https://sp-edge.com/companies/314571">
 Alphabet
 </a>
 continued to dominate activity: 
 The tech giant accounted for 63% of all Big Tech activity and 57% of all healthcare activity. Over two-thirds of its activities were concentrated in primary care, with 
 <a href="https://sp-edge.com/industry/106">
 Hospital Management
 </a>
 and 
 <a href="https://sp-edge.com/industry/29">
 Telehealth
 </a>
 being the main focus. After gradually making inroads during previous quarters, Alphabet, through Isomorphic Labs, picked up activity around 
 <a href="https://sp-edge.com/industry/13">
 AI Drug Discovery
 </a>
 . In addition, the company showed interest in the 
 <a href="https://sp-edge.com/industry/98">
 Clinical Decision Support Systems
 </a>
 , 
 <a href="https://sp-edge.com/industry/79">
 Hospital Interoperability
 </a>
 , 
 <a href="https://sp-edge.com/industry/32">
 Digital Wellness
 </a>
 , and 
 <a href="https://sp-edge.com/industry/39">
 Beauty Tech
 </a>
 domains.&nbsp;
 
 </li>
 </ul>
 
 
 
 <ul>
 <li>
 
 As in Q4 2023, 
 <a href="https://sp-edge.com/companies/29760">
 CVS Health
 </a>
 was the only active company among the retailers. 
 Although at reduced levels compared with the previous quarter (10% of overall activity in Q1 2024 compared with 11% in Q4 2023), the retail giant pursued both partnerships and investments in the healthcare space.&nbsp;
 
 </li>
 </ul>
 
 
</div>

Managing employee health-related benefits

Health Benefits Platforms

<div>
 <ul>
 <li>
 
 Health benefits platforms are online platforms that let employees and dependents access and manage healthcare-related services offered as part of an employer's benefits plan or an insurance plan.
 
 </li>
 <li>
 
 These platforms have recently gained traction due to their ability to reduce staff turnover, improve employee engagement, and attract talent. 
 
 </li>
 </ul>
 
 
</div>

<div>
 
 
 <ul>
 <li>
 
 Health benefits platforms are online platforms that let employees and dependents access and manage healthcare-related services offered as part of an employer's benefits plan or an insurance plan.
 
 </li>
 <li>
 
 These platforms have recently gained traction due to their ability to reduce staff turnover, improve employee engagement, and attract talent. 
 
 </li>
 <li>
 
 Drivers in this industry include shifting employee preferences, rising healthcare costs, and the need for platforms to manage complex benefits.
 
 </li>
 <li>
 
 Challenges include unsustainable increases in healthcare costs, data security risks, and regulatory compliance requirements. 
 
 </li>
 <li>
 
 Investment in the industry has maintained momentum, albeit unevenly.
 
 </li>
 </ul>
 
 
</div>

Breaking the one-size-fits-all mold: Navigating health benefit platforms

<div>
 <ul>
 <li>
 
 Overall activity of Big Tech and retail players picked up during Q4 2023. 
 
 </li>
 <li>
 
 New GenAI products spur Big Tech collaborations. 
 
 </li>
 <li>
 
 Investment activity picked up during the quarter, while M&amp;A activity continued to be muted. 
 
 </li>
 </ul>
 
 
</div>

<div>
 <ul>
 <li>
 
 Overall activity of Big Tech and retail players picked up during Q4 2023. 
 In particular, activities among retailers witnessed an uptick during the quarter, accounting for 33% of all activities during Q4 (up from 15% during Q3 2023). 
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 <a href="https://sp-edge.com/companies/314571">
 Alphabet
 </a>
 &rsquo;s dominant presence in healthcare continued. 
 The tech giant accounted for 33% of all Big Tech activity and 22% of all healthcare activity. Primary care remained the main focus, with half of its activities concentrated in this area. Within primary care, Alphabet showed interest in areas such as 
 <a href="https://sp-edge.com/industry/106">
 Hospital Management
 </a>
 and 
 <a href="https://sp-edge.com/industry/29">
 Telehealth
 </a>
 while also broadening its focus into other areas such as 
 <a href="https://sp-edge.com/industry/13">
 AI Drug Discovery
 </a>
 , 
 <a href="https://sp-edge.com/industry/56">
 Precision Medicine
 </a>
 , and 
 <a href="https://sp-edge.com/industry/3">
 Mental Health Tech
 </a>
 .
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 New GenAI products spur Big Tech collaborations. 
 New product launches from 
 <a href="https://sp-edge.com/companies/314571">
 Alphabet
 </a>
 (such as its 
 <a href="https://hitconsultant.net/2023/12/13/google-cloud-launches-healthcare-focused-generative-ai-models/">
 MedLM
 </a>
 family of GenAI models) and new AI and GenAI product launches by 
 <a href="https://sp-edge.com/companies/201465">
 Microsoft
 </a>
 (such as new data solutions within Microsoft Fabric, GenAI models of their own, and medical transcriptions services) were catalysts for partnerships by Big Tech in the healthcare space.
 
 </li>
 </ul>
 
 
</div>

Tech & retail giants in healthcare (Q4 2023): Overall activity picks up as retailers rebound

<div>
 <ul>
 <li>
 
 Adoption of GenAI in healthcare continues to grow, Big Tech competition heats up as Amazon makes major moves. 
 
 </li>
 <li>
 
 Alphabet continued to lead healthcare activity. 
 
 </li>
 <li>
 
 No major acquisitions during the quarter, but reports suggest a multi-billion dollar move by Walmart is on the cards. 
 
 </li>
 </ul>
 
 
</div>

<div>
 <ul>
 <li>
 
 Adoption of GenAI in healthcare continues to grow, Big Tech competition heats up as Amazon makes major moves.
 While Alphabet and Microsoft continue to make steady progress in the healthcare GenAI space through their product offerings, Amazon&rsquo;s consolidation through the launch of AWS HealthScribe (a HIPAA-compliant service that enables healthcare software vendors to build clinical applications that automatically generate clinical notes by analyzing patient-clinician conversations) and its strategic investment in 
 <a href="https://sp-edge.com/companies/1398144">
 Anthropic
 </a>
 demonstrate intensifying competition in this space.
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 <a href="https://sp-edge.com/companies/314571">
 Alphabet
 </a>
 continued to lead healthcare activity. 
 The tech giant accounted for ~32% of all Big Tech activity and nearly a quarter of all healthcare activity. Primary care remained the focus, with nearly 80% of its activities concentrated in the area. However, within primary care, Alphabet broadened its focus to improve preventive healthcare, hospital management and interoperability, AI drug discovery, and clinical decision support.
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Overall activity of retailers slowed in Q3 2023, 
 accounting for 15% (down from 32% during Q2 2023). Walgreens continued its commitment to value-based care. Following a landmark investment in 
 <a href="https://sp-edge.com/companies/324761">
 VillageMD
 </a>
 , Walgreens announced its latest strategic partnership with 
 <a href="https://sp-edge.com/companies/1622932">
 Pearl Health
 </a>
 to bring value-based primary care to communities across the country.
 
 </li>
 </ul>
 
 
</div>

Tech & retail giants in healthcare (Q3 2023): Big Tech pushing GenAI aggressively

<div>
 <ul>
 <li>
 
 The retail industry plays a pivotal role in the US economy and has been evolving with new technologies.
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 To maintain a competitive edge in this field, retailers actively pursue strategic partnerships, investments, and M&amp;As primarily in the transportation and logistics, retail technology, and health and wellness sectors.
 
 </li>
 </ul>
 
 
</div>

The retail industry in the US is an important part of the economy and is constantly changing due to new technologies. To stay ahead, retailers are seeking strategic partnerships, investments, and mergers and acquisitions in areas like transportation and logistics, retail technology, and health and wellness. These initiatives help retailers stay competitive and adapt to the evolving needs of consumers.

Beyond the shelves: A deep dive into retailers' innovations

<div>
 <ul>
 <li>
 
 The US digital health sector closed with 
 USD 3.6 billion
 across 
 289 rounds
 in Q1, up 5% QoQ
 
 </li>
 <li>
 
 Generative AI
 emerged as a common theme among 
 big tech incumbents
 , highlighted by AWS partnering with 3M and Philips to offer the Amazon Bedrock foundation model 
 
 </li>
 <li>
 
 The quarter also witnessed the entry of the 
 first AI-discovered drug
 &mdash;developed by Insilico Medicine&mdash;into 
 Phase II clinical trials
 
 </li>
 </ul>
 
 
</div>

Digital Health (Q2 2023): Funding flow steady; first AI-drug enters Phase II clinical trials

<div>
 <ul>
 <li>
 
 Alphabet continues momentum from last quarter; neck-and-neck with Oracle for most healthcare activity in Q2 2023
 
 </li>
 <li>
 
 No M&amp;A activity in Q2, a significant shift from the aggressive moves of the recent past
 
 </li>
 <li>
 
 Generative AI in healthcare emerges as a common theme in Big Tech partnerships
 
 </li>
 </ul>
 
 
</div>

Tech & retail giants in healthcare (Q2 2023): CVS hits pause on M&A; Big Techs enabling generative AI

<div>
 <ul>
 <li>
 
 The US digital health sector grew by 26% QoQ in Q1 2023 with 
 USD 3.5 billion across 232 rounds
 , and an average deal size of USD 15 million.
 
 </li>
 <li>
 
 A high level of incumbent activity was recorded in terms of partnerships and acquisitions, while several new digital health products were launched predominately from the telehealth and mental health tech space. 
 
 </li>
 </ul>
 
 
</div>

Digital health Q1 2023: Funding bounces back, incumbents expand primary care presence

<div>
 <ul>
 <li>
 
 Alphabet has emerged as the undisputed leader, accounting for 33% of total healthcare activity
 
 </li>
 <li>
 
 The primary care industry was abuzz in Q1 2023, with 65% of all healthcare industry activity
 
 </li>
 <li>
 
 CVS is betting big on primary care with its second multibillion-dollar purchase in just seven months
 
 </li>
 </ul>
 
 
</div>

<div>
 
 
 <ul>
 <li>
 
 Alphabet dominated healthcare activity, leading in partnerships and investments: 
 Alphabet accounted for 33% of all healthcare activity and 52% of Big Tech activity in Q1 2023. The tech giant continued to make waves with partnerships in hospital interoperability
 (see below)
 . It also demonstrated an active interest in mental health via an investment in 
 <a href="https://sp-edge.com/companies/1746434">
 firsthand
 </a>
 and its in-house development of a 
 <a href="https://www.mobihealthnews.com/news/googles-pixel-watch-adds-fall-detection">
 fall detection feature
 </a>
 for its Pixel Watch under silver economy tech. In the pharma and life sciences domain, Alphabet partnered with 
 <a href="https://sp-edge.com/companies/122694">
 Bayer
 </a>
 for AI drug discovery and invested in promising startups in large molecule and human gene editing.&nbsp;
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 CVS Health makes strategic move to shake up the Medicare space: 
 CVS Health dominated Q1 2023 with over 70% of all retail giant activity. The most notable deal was 
 <a href="https://sp-edge.com/updates/16180">
 its planned acquisition
 </a>
 of 
 <a href="https://sp-edge.com/updates/15588">
 Oak Street Health
 </a>
 , a primary care provider for Medicare recipients. This move aligned with the company's previous acquisitions of 
 <a href="https://sp-edge.com/companies/735696">
 Signify Health
 </a>
 and 
 <a href="https://sp-edge.com/companies/90956">
 Aetna
 </a>
 . Investors are increasingly interested in the Medicare Advantage (MA) market, which accounts for nearly half of Medicare spending and allows practices to code beneficiaries' diagnoses more aggressively for higher payments. CVS Health&rsquo;s strategic inroads into the market will allow the retail giant to use reimbursement codes more strategically and aggressively, boosting reimbursements for Aetna's MA beneficiaries.
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Corporate giants race to dominate the primary care market:
 The recent surge in primary care has attracted the attention of corporate investors eyeing potential deals to compete with other managed care providers and private equity firms. In Q1 2023, an impressive 65% of all activities in the healthcare industry centered around primary care, with both retail giants and Big Tech heavily involved. Notable deals in the space included CVS Health's investment in 
 <a href="https://sp-edge.com/companies/90956">
 Carbon Health
 </a>
 and the 
 <a href="https://www.cvshealth.com/news/virtual-care/cvs-health-launches-new-virtual-care-offering.html">
 launch of its new virtual primary care
 </a>
 offering, 
 <a href="https://sp-edge.com/companies/1658">
 Apple's
 </a>
 push to develop a non-invasive glucose test, and 
 <a href="https://sp-edge.com/companies/22572">
 Walmart's
 </a>
 plan to nearly 
 <a href="https://corporate.walmart.com/newsroom/2023/03/02/walmart-health-nearly-doubles-in-size-with-launch-into-two-new-states-in-2024">
 double its primary care 
 </a>
 presence by launching in two new states next year. These developments underscore a growing trend of corporate interest in primary care, driven by an increasing focus on value-based care.
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Google and Microsoft battle for AI supremacy: 
 As AI continues its momentum as a game-changing technology in healthcare, it comes as no surprise that two of the tech industry&rsquo;s giants, Microsoft and Google, continued to make strides in AI during Q1 2023. Google introduced an array of 
 <a href="https://blog.google/technology/health/ai-llm-medpalm-research-thecheckup/">
 new AI-driven healthcare tools
 </a>
 , including an AI chatbot Med-PaLM 2 that can shed light on medical questions. Meanwhile, Microsoft partnered with 
 <a href="https://sp-edge.com/companies/2027687">
 VinBrain
 </a>
 and 
 <a href="https://sp-edge.com/companies/2027687">
 Paige
 </a>
 to leverage AI tools for advanced diagnostics and predictive capabilities to unlock more value in these partnerships. Microsoft also announced the development of an 
 <a href="https://sp-edge.com/companies/596581">
 OpenAI-
 </a>
 powered app that can transcribe patient notes during doctor visits.&nbsp;
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Google offers developer tools to support interoperability: 
 Google is making significant strides in healthcare interoperability with a range of new tools and partnerships. 
 <a href="https://www.healthcareitnews.com/news/asia/singapores-ihis-taps-google-cloud-accenture-drive-healthcare-innovation">
 Singapore's Integrated Health Information Systems (iHiS) has teamed up 
 </a>
 with Google Cloud and 
 <a href="https://sp-edge.com/companies/181705">
 Accenture
 </a>
 to deploy Google Cloud's API management platform, Apigee, which will provide developers access to data and services from iHiS's systems to create new applications. Google 
 <a href="https://www.prnewswire.com/news-releases/redox-and-google-cloud-partner-to-accelerate-healthcare-data-interoperability-301749552.html">
 also partnered
 </a>
 with 
 <a href="https://sp-edge.com/companies/181705">
 Redox
 </a>
 to accelerate healthcare data interoperability. At the same time, Google 
 <a href="https://techcrunch.com/2023/03/14/google-introduces-open-health-stack-for-developers/">
 launched Open Health Stack
 </a>
 , a new open-source program that includes a software developer kit (SDK) for Android and design guidelines for health apps. This stack is centered around the Fast Healthcare Interoperability Resources (FHIR) standards, making it easier for developers to capture information.&nbsp;
 
 </li>
 </ul>
 
 
 <ul>
 <li>
 
 Big Tech continues to accelerate pharma innovation:
 As the pharma industry seeks to accelerate drug discovery processes, technology companies are increasingly investing and partnering in the space to expedite the development of innovative solutions. For example, Google Cloud partnered with 
 <a href="https://sp-edge.com/companies/122694">
 Bayer
 </a>
 to leverage quantum computing to predict the chemical and physical properties of drug molecules. Similarly, Meta Platforms' research arm, Meta AI, has developed ESMFold, an AI-based computer program that predicts protein structures 60x faster than Google's AlphaFold but with less accuracy. Additionally, Google Ventures has invested in companies such as 
 <a href="https://sp-edge.com/companies/122694">
 EpiBiologics
 </a>
 , 
 <a href="https://sp-edge.com/companies/2675304">
 Aera Therapeutics
 </a>
 , and 
 <a href="https://sp-edge.com/companies/1695679">
 Chroma Medicine
 </a>
 , which are developing advanced technologies such as next-gen protein degradation platforms and epigenetic editing technology to advance drug discovery efforts.&nbsp;
 
 </li>
 </ul>
 
 
</div>

Q1 2023 tech and retail giants in healthcare: Alphabet dominates; CVS continues purchasing frenzy

<div>
 <ul>
 <li>
 
 Microsoft, Amazon, and Google competed for control in the healthcare cloud market
 
 </li>
 <li>
 
 Apple&rsquo;s Watch and Google's Fitbit stepped up their wearable tech for medical use and Alphabet focused on its AI expertise to drive precision medicine 
 
 </li>
 <li>
 
 CVS, Walmart, Walgreens, and Amazon doubled down on their primary care and omnichannel care delivery
 
 </li>
 </ul>
 
 
</div>

EDGE Insights

Tech & retail giants in healthcare (Q1 2024): Big Tech forges ahead, cashing in on AI revolution

Breaking the one-size-fits-all mold: Navigating health benefit platforms

Tech & retail giants in healthcare (Q4 2023): Overall activity picks up as retailers rebound

Tech & retail giants in healthcare (Q3 2023): Big Tech pushing GenAI aggressively

Beyond the shelves: A deep dive into retailers' innovations

Digital Health (Q2 2023): Funding flow steady; first AI-drug enters Phase II clinical trials

Tech & retail giants in healthcare (Q2 2023): CVS hits pause on M&A; Big Techs enabling generative AI

Digital health Q1 2023: Funding bounces back, incumbents expand primary care presence

Q1 2023 tech and retail giants in healthcare: Alphabet dominates; CVS continues purchasing frenzy

Tech and retail giants: Everyone wants a piece of the healthcare pie

Tech & retail giants in healthcare (Q1 2024): Big Tech forges ahead, cashing in on AI revolution

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