Elizabeth Bailey, managing director at RH Capital, said there are plenty of opportunities for digital health investors and startups to make waves in the women’s health space.
Though women’s health tech still makes up a relatively small portion of overall digital health funding, Bailey said the environment has changed since RH Capital, which focuses on reproductive and maternal health, raised its first fund in 2019. The topic isn’t niche anymore – and venture capital firms should be looking for those untapped opportunities.
Bailey sat down with MobiHealthNews to discuss the women’s health landscape, how the Dobbs decision has affected the market and how startups can effectively work in maternal health.
MobiHealthNews: What are the areas in women’s health that you think need more investment?
Elizabeth Bailey: Pretty much everywhere in women’s health. When you think about how little investment there’s been in the women’s health space, what it means is that innovations are needed across every area that you can think of, from endometriosis, to menopause, to STIs, to heart disease. I think if you’re talking about women’s health and medical conditions, I cannot think of one that is not ripe for investment and innovation.
Especially with digital health companies, we saw a lot of direct-to-consumer companies, which was great. It was basically saying, “Okay, women, we want to empower you with the tools to manage your own health. You need new tools to be able to do that, and we want to educate you and give you greater control and more autonomy.”
At the same time, a lot of those things are private pay and out-of-pocket. It really puts a lot of that burden on the consumer. So you could say it gives more control, but it also adds more burden. Hey, you figure this out, you take control because the healthcare system isn’t working for you.
I think what I’m hoping for in this next wave of women’s health investment is that we’ll actually see more investment in companies that have commercial insurance reimbursement and Medicaid reimbursement to really get the system to support women’s health. Because if you can’t afford these new tools or apps that are available as private paid services, then you’re out of luck.
One of the reasons why women’s health has suffered in the way that it has is because there’s been no data. If you don’t do research, you can’t then come up with innovations. There’s a huge opportunity for companies to both amass the data and then use that to come up with digital biomarkers or decision support tools. I think that’s wide open, and I think we now have the AI tools to be able to do more.
MHN: Do you think the Dobbs decision is affecting funding or business decisions at women’s digital health companies? How do you advise your portfolio companies?
Bailey: I would say interest in contraception and pregnancy prevention has grown over the last six months or so, as well as interest in pregnancy and improving maternal health outcomes, specifically for underserved and marginalized communities. We know that the Dobbs decision disproportionately impacts low-income women and women of color. There’s just been this bright light shining on this issue that existed before, but I think it magnified it post-Dobbs.
We did just make an investment in a telehealth company that will be providing medication abortion, probably in the first quarter. There have been a bunch of startups in the medication abortion space. I think our bet has been on a platform play – so a company that’s not just doing that, because of the uncertainty and this really dynamic environment.
So I think it is a double-edged sword. There is increased interest from investors, but investors don’t like risk. Every day there’s something new. The FDA comes out and says retail pharmacies can provide abortion medication, and then there’s some new case being considered that could restrict access. So I think companies that are playing in this space need to make sure they’re diversified to be able to weather that storm.
I think the private sector is going to play a really important role in ensuring access to reproductive healthcare. But you need to make sure these companies are well financed, so they can weather these storms. I was an early investor in Teladoc, and we had assessed the regulatory risk. About a month after we invested, the Texas Board of Medicine shut them down. It’s just fascinating, in a very different space, but there were a lot of entrenched groups that didn’t want to see telemedicine take off. And it was through the perseverance of the management team, as well as the investors, who said, “We have staying power here. We are optimistic.”
But it was absolutely this roller coaster, and so I think you need patient, committed investors that are playing in the women’s health space.
MHN: You noted that some investors don’t want to invest in an uncertain environment, and there’s definitely a lot of variance between states, and what is legal and what isn’t. Is there also some stigma against abortion funding, since it’s a controversial topic?
Bailey: Yes, there are absolutely going to be those investors out there. What we have heard from some of our co-investors, or just other investors in the space, is “Our limited partners want us to stay away from abortion.” And so it’s not just the investors themselves. It’s actually the limited partners behind the scenes that are driving some of those decisions. I think there are funds and investors that explicitly say, “I don’t want to invest in that space.”
What I’ve seen more of is investors saying, “Wow, you know, I kind of wanted to stay away from this issue before, but I can’t be silent on it. I can’t not do something. And I can’t run in the other direction just because it’s complicated and because it’s polarizing.” So I think you see both.
MHN: Maternal health is still a huge concern in the U.S. We lag behind a lot of other rich countries when it comes to mortality, especially with Black women. How can health tech companies work to bridge those gaps? What do you think are some of the most effective ways for them to insert themselves in the process?
Bailey: Some of our portfolio companies really are playing in the health equity space, specifically to address health disparities for Black women. Their strategies have to be intentional. They need to develop products and services that are not for everybody, but are actually providing culturally congruent care, so that you’re matching providers that look like and have the same experiences, and are from the community of the patients that you’re serving. Developing products and services that build trust with the Black community is also really important.
One of the things we know is that, as an example, Black women go into the hospital. They’re not listened to; they’re not believed. And so creating objective measures of health indicators, so that it’s not about believing someone. It’s not subjective. It comes back to data. You need data and the tools to be able to do that.
And I think there’s a huge push toward providing care outside traditional hospitals. I don’t want the healthcare system to go away, but I think there are lots of opportunities to provide care outside of that, whether it’s in the home or in birthing centers. Technology is really critical to being able to provide more remote services or outside-of-hospital care.