Physicians Capital Fund is an early-stage healthcare fund anchored by physicians and allied health professionals. We're bridging the gap between tech innovators and those on the healthcare frontline. Through strategic investments in the most fundamentally promising healthcare solutions, we're driving a new standard of healthcare innovation.
The next era of wearables won't just count steps, it'll help write clinical notes. In a recent PhyCap Fund webinar, we brought together voices from across the ecosystem to explore where this new wave of innovation is heading. Here are five signals that show how the category is maturing from wellness tracking to clinical impact.
The market is shifting from tracking lifestyle habits to improving clinical outcomes. Step counts and sleep scores built awareness, but the next phase will measure signals that inform care.
"We're moving from consumer-grade wearables to clinical-grade wearables, devices that detect, measure, and drive outcomes," said Vipul Kella, MD, General Partner at PhyCap Fund.
FDA data show a steady rise in medical devices incorporating sensor-based digital health technology since 20211, signaling a move toward higher clinical standards. Devices that produce reliable, longitudinal data can improve patient care and earn the trust of both physicians and payers.
The FDA's new Predetermined Change Control Plan (PCCP) allows pre-approved software updates without re-filing, supporting faster iteration2. Meanwhile, new CPT codes, particularly for Remote Therapeutic Monitoring (RTM), are expanding reimbursement opportunities3. These shifts make it easier for clinical-grade wearables to reach patients, but they also raise expectations for safety, efficacy, and real-world outcomes.
Understanding how care is delivered is as important as knowing what the market wants. Physician input ensures devices generate actionable data that fits clinical workflows, reducing diligence risk and accelerating adoption.
A cardiologist wants data that integrates with Epic. A surgeon needs accuracy when a device is under drapes. These are the practical details that determine whether innovation succeeds.
For wearables to move beyond wellness, the data must reflect the diversity of patients who will use them. Bias in device design and training datasets continues to limit performance across sex, skin tone, and comorbidities. Closing these gaps is both a clinical and commercial priority for the next wave of wearables.
Women's health, in particular, remains underserved in device design and data sets4. The next era of wearables will depend on personalized, clinically validated data that closes these gaps and improves outcomes for all.
Data alone is not enough. For wearables to achieve clinical adoption, they must demonstrate measurable improvements in outcomes, workflow efficiency, or cost of care. Validation against clinical standards has become the threshold for credibility with physicians, health systems, and payers.
Financial validation is equally important. The next generation of winners will show clear value by, reducing risk, improving efficiency, and supporting payer adoption and long-term sustainability.
Clinical-grade wearables are still early, but the signals are clear: progress will come from evidence, integration, and collaboration between innovators and clinicians.
At PhyCap Fund, we believe that meaningful progress begins with physicians - the people closest to patient care and most equipped to shape technology that lasts.
1 U.S. Food and Drug Administration.
Medical Devices that Incorporate Sensor-based Digital Health Technology. Content current as of August 10, 2025.
2
Ballard Spahr LLP. FDA
Issues Guidance on AI for Medical Devices. August 20, 2025
3
Binariks. Remote Patient Monitoring CPT Codes: The Ultimate Guide for 2025. 2025.
4
Villarraga, Marta. Closing the Gender Gap in Digital Health Technologies. Exponent. January 2024.
