Next digital health IPO: Practice Fusion, Castlight or ZocDoc?

In the last year, several health tech startups have gained momentum, but according to a survey of digital health entrepreneurs, Practice Fusion, Castlight and ZocDoc are the closest to making their public debut.

The survey of 100 entrepreneurs was conducted Conducted by Interwest Partners, the venture capital firm behind Epocrates, Doximity and other health tech and life sciences companies. When asked which digital health company will be the next to go public, about a quarter (26 percent) of respondents named electronic medical records company Practice Fusion, which has raised $70 million in the past few years. Twenty-one percent of respondents identified Castlight Health, which has raised a whopping $160 million for its price transparency and online comparison tools, and 19 percent chose online appointment booking service ZocDoc, which has raised $95 million.

Not surprisingly, the CEOs of those companies have been mostly quiet about their long-term plans. In raising the company’s $100 million Series D round, though, Castlight CEO and cofounder Giovanni Colella reportedly indicated that an IPO was up next for the company.

The survey also asked entrepreneurs which company they wished they had founded (besides their own). Google (s GOOG) took the top spot on that list, but it was followed by ZocDoc and then Castlight, electronic heatlth records company Epic and medical software firm Airstrip.

Much like those in the tech world at large, digital health entrepreneurs appear to have tired of the big buzzwords, with about a quarter of respondents each indicating that “gamification of healthcare” and “big data/predictive analytics” are the most overused phrases in health tech.

As for the biggest challenges to innovation, the respondents said that reimbursement was their top concern (27 percent), followed by government (19 percent).  Interestingly, even though it ranked highly as a company entrepreneurs wished they had founded, Epic (along with electronic health records company Cerner) was listed as one of the top challenges to innovation by 14 percent of respondents. Writing about the survey, Interwest’s Executive-in-Residence Michelle Synder wondered if that finding stemmed from recent research showing that while companies like Epic and Cerner (s CERN) dominate the health information exchange (HIE) market, health providers are dissatisfied with their ability to move data between systems.

Synder wrote:

Perhaps respondents who wish they had founded Epic had seen the recent KLAS data showing the company continuing to dominate the market? Or they have firsthand experience seeing the difficulties in trying to integrate into a closed system? Unfortunately for many of my clinician friends, Epic seems to be one of the few B2B companies that has found a way to succeed in spite of not providing a good “C” experience to the end user.