Insights & Trends

Investing in future generations: Putting children at the centre of healthcare innovation

Insights & Trends

Investing in future generations: Putting children at the centre of healthcare innovation

May 15th 2023 / 5 min read

Words: David Cole & Tom Smith

Innovation and venture is all about building for the future. And while it may be a cliche, no one better embodies the future than children.

Children currently make up 25% of the population, but represent 100% of the future. Children will feel the greatest impact of the decisions we make today, as they will live with the consequences of our actions or inaction. 

The purest example of this is children’s healthcare (paediatrics), a highly pressing issue both in the near term and the long term. In the near term, strengthening access to and quality of paediatric care is crucial for improving young patient outcomes and preventing unnecessary deaths. We’re both parents, surrounded by friends with young kids, and ultimately we all want the best outcomes for our children if and when they need it. 

In the long term, the stakes are even higher: neglecting children’s health now will be deeply reflected in the overall health of our future population, creating a maelstrom of socio-economic challenges further down the line. This isn’t something we can afford putting off until later: it’s a problem we need to address now.

What has caused the stagnation in children’s health innovation?

So why is that paediatrics is severely lagging behind? 

For one, there’s a simple obstacle of funding. Despite children representing 25% of the population, children’s healthcare receives less than 5% of the funding. To our knowledge, there are only two VCs globally that focus on children’s health.

There may be a number of explanations for this. Children, by and large, are very healthy: by which we mean chronic illnesses are pretty rare. Even those suffering from serious illnesses (e.g. cancers), about 80% will recover. That remaining 20% is the problem area, the target audience who need paediatric innovation the most: and yet, from an investor’s perspective, that’s a small niche. 

The other consideration for investors is the expectation of returns. The impact of children’s health is long term—decades, not years—making it a difficult investment for investors looking for returns and exits. That’s combined with the fact that, in the UK, the NHS operates on a 12-month budget, making this return on investment even harder to predict. 

When considering why children’s health is lagging, there’s an important distinction to make between adult health and children’s health—a distinction which is often forgotten. This has a knock-on effect when it comes to improving the quality and suitability of paediatric care. It’s not simply enough to take adult-based solutions and scale them down for children: paediatrics requires bespoke innovation with children at the centre of any trials or innovation process.

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So why do we need to innovate now? 

For one, there really is no more time for delay. Studies underline the reality that, the earlier on you can tackle health challenges, the better individuals’ health will be going forward. A study in The Lancet showed that children who had a respiratory infection, such as bronchitis or pneumonia, before the age of 2 were twice as likely to die prematurely as adults. 

Innovation gets forgotten all too easily in a public context. When public purse strings are tightened, and NHS budgets are cut by incumbent governments, innovation often gets left on the floor as other short term challenges are prioritised. This underlines the huge need for private innovation, led by entrepreneurs and funded by private investors.  If the private sector is investing in the future of humanity then hopefully governments will also do the same.

We are currently facing an exciting turning point around health tech innovation. During COVID, the healthcare system saw decades of progress advance in a matter of weeks, underlining the capabilities of digital health, in particular telehealth and technologies that enabled remote care. This massively lowered the barriers to entry for healthtech startups, who suddenly saw far greater willingness for trialling and adoption by clinicians, insurers, and patients. Entrepreneurs operating today can seriously benefit from this shift. 

There are also wider learnings to take from paediatric innovation that could aid the healthcare system more broadly. The spectrum of childhood, from 0 to 18, has huge physiological changes and differences. If you can solve for this, there may be massive learning opportunities that can be scaled up for later in life. Consider the human lifecycle more broadly—in later life, you are a dependent, just as you are in early childhood. Again, a huge opportunity for learnings from paediatrics to be applied to geriatric care. 

What do children’s health entrepreneurs need?

Through the Children’s Health Impact Accelerator, we’re building a programme of support that aims to provide paediatric entrepreneurs with everything they need to set them up for success. So what does this include? 

First and foremost, you need to have children at the centre. Innovation is doomed to fail when it's built around adults and is scaled down for children. To succeed, ensure you tailor technology to the children for whom it is designed. There’s a positive here—children are natural innovators, and they know exactly what they want and what they don’t want (albeit in a blunter way than adults). 

Around these children, organisations need to ensure a culture of innovation. You need different stakeholders who are willing to drive innovation. This includes hospitals, who will provide the clinical validation for any potential technologies. We’re lucky to be working with Alder Hey Children’s Hospital, an organisation that has decades of experience of providing the best innovative care to children. Given the complexity of the highly regulated healthcare environment, working alongside healthcare institutions will give you a huge strategic advantage and help you get technologies implemented, monitored, and scaled. 

We want to work with entrepreneurs who are open-minded and willing to learn—these make the best founders. If you’re coming in pretending you know everything, then you probably don’t need an accelerator. 

Entrepreneurs also need to be able to measure the impact they are having. This might include financial savings, operational efficiencies, and lives saved. Maximising profit really shouldn’t be your focus: and if it is, you might be in this for the wrong reasons. You’ve got to be aware that children’s health isn’t a quick payoff: in 2023, these aren’t going to be billion dollar businesses. It could be in the future, but not now. 

As such, any potential founder needs to have the right reasons for being there, to endure the additional challenges of innovating in children’s healthcare, on top of global headwinds around tech at the present. Those with the right passion and commitment will know how big the possible reward could be on the other side. 

Are you a founder working in the children's innovation space?

Submit your ideas for Children's Health Impact Accelerator

Apply here

About David

David Cole is co-founder of Thinking of Oscar, a charity aiming to invest in technologies that will advance children's health. It is named after his son Oscar, who passed away in 2014 at the age of 1. He is also a strategic advisor in healthcare, including for Alder Hey Children's Hospital.

About Tom

Tom Smith is founding director of Humant, aiming to put humans at the centre of data-driven health innovation. He is also CEO of Wanda Health, a virtual care solution for providers, hospitals, and group practices.

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