Health Information and Vulnerable Populations: Financial Investors


Leaders of financial investment firms share their views on funding companies that provide health information to vulnerable populations.

Helen Leis and Parie Garg

13 min read

To gain a better understanding of how various healthcare stakeholders see their role in developing and providing health information to vulnerable populations, Oliver Wyman, with support from the Robert Wood Johnson Foundation, is conducting a multi-disciplinary study of the health information landscape. Over the course of the spring and summer of 2016, Oliver Wyman conducted interviews with nearly 100 marketplace leaders. The preliminary findings from that research were previously published. (Read the report.)

Here, we provide further details from our interviews with leaders of financial investment firms, and we share their views on funding companies that are working to provide more effective health information for vulnerable populations.

Current Investment Landscape

Over the past few years, the healthcare information technology space has seen a tremendous increase in investment activity. According to a report by Rock Health, the digital health space received over $4.5 billion in funding in 2015, up from the $4.3 billion invested in 2014. Investments in the overall healthcare sector have shown no indications of slowing in 2016, either. “The vibrant thread of innovation running through the sector should continue to present opportunities,” declared a report by Fidelity Investments

However, there have been limited investments in health information products that serve vulnerable populations. Investors we spoke with said that they do have some interest in the Medicaid market; but they acknowledged the commercial market represents a more established and lucrative revenue model, and so that is where most investments are directed.

In light of interviewees’ limited portfolio and experience with vulnerable consumers, what follows are insights on the health information investment space, generally. These findings do have implications, though, for future investment into products and services for vulnerable populations, as they reflect investors’ attitudes about information solutions and consumer behavior.

Current Investment Theses

Several funds expressed the belief that consumers are ill-equipped to make healthcare decisions (due to the complexity of the healthcare system), and simply giving them more information is unlikely to help. When one fund partner was asked whether it is viable to leave consumers at the helm of decision making, the partner indicated no, adding: “[You and I are] probably on the upper 1 percent of the informed consumer for healthcare, but I'm still not even sure how it works.”

Given these doubts about consumer ability, it is unclear whether investors would be willing to pursue investments even if we begin to see more companies seeking funding for products and services geared toward vulnerable consumers. (See related post about health information companies’ interest in developing products for vulnerable populations.)

Investors also voiced doubts about consumers’ willingness and ability to pay for health information tools. And that explains why they have, primarily, shied away from consumer self-pay business models. Said one investor: “[We] have an underpinning and a pretty strong conviction that for the foreseeable future, consumers are not going to pay for significant tools in healthcare.”

As a result, when considering business models, investors to date have mostly focused business-to-business or business-to-business-to-consumer models. That said, some investors indicated they would consider business-to-consumer models.

Key Obstacles: Investors ID Main Challenges for Companies Seeking Funding

Low-margin environment. Several investors stated that health information companies face a number of challenges when building investment cases for their products and services. To begin with, healthcare is a low-margin business and much of the market is facing extremely tight budgets. Any investment dollars are scrutinized very carefully; convincing plans, providers, and employers to apportion money into health information solutions is a challenge given more pressing organizational priorities. “Getting access to the plans and the providers for something new is obviously very difficult,” said one investor. “[Health information companies] are going in with something that probably works and has some value, but the hospital is saying, ‘Why do I want to spend the money on this?’"

Information-only offerings not enough. Presenting health information is one thing; prompting consumer behavior change is quite another.  When asked which types of investments drive value, one fund said solutions that deliver information, along with guidance or navigational support are more attractive. “If you take somebody and tell them ‘This is the diet and lifestyle that you need to have going forward.’ All those things are great, but that does not change [the] behavior going forward,” an investor said.

Industry instability. One fund expressed the view that certain types of information companies may become obsolete in the future, and therefore do not make a wise long-term investment. Using transparency as an example, a partner at one fund observed: “In most [non-healthcare] markets, you don't have to have a separate company [provide transparency information] for you. We all make our own determinations of ‘is the price fair, relative to my perception of quality.’  You don't have an entire company out there that makes money just because it's providing transparency and facilitating transparency in a marketplace.”

While the healthcare industry certainly needs transparency support now, the question is whether that will be a discrete business provided by a third-party in the future. Indeed, as the partner further noted: “The question [around transparency] is, should it really be a business versus should that just be how a more transparent market functions?” The transition to a more transparent market will take time; but the fact that the transition is already under way (even if only in the smallest way) may cause investors to hold back.

Ways to Accelerate Progress

  1. The most obvious path to increased investment is a more compelling value proposition. Information companies must convince employers, health plans, and providers that their offering will drive engagement and behavior change.

  2. Stakeholder groups that view health information as critical to their strategic goals must make their desire for innovative offerings more known. Currently, investors are not seeing it, and therefore do not believe a sufficiently large market exists or warrants investment.

  3. The Medicaid market must entice companies into the space with increased economic incentives. While there are companies with products that could be marketed in the Medicaid space, these companies have chosen to remain in the commercial world because of perceived better value. Until the Medicaid market can show companies that it can host profitable ventures, companies will not enter, and investments will not flow.

  4. Efforts like CMS’s Health Care Innovation Awards help to shine a light on innovative solutions for this population. More of this sort of attention may lead to increased investment activity in companies that serve vulnerable populations.


Financial investors widely believe that providing health information by itself is insufficient to impact consumer behavior. And though vulnerable populations remain an under-invested area, investors recognize the potential opportunities in those segments and remain open to compelling investment theses focusing on vulnerable consumers. Now the onus is on employers, health plans, and providers to demand new solutions. If they do, it will likely spur healthcare investors to act.

  • Helen Leis and
  • Parie Garg