“As healthcare innovators in this room, we know that changing the system is a slog. We’re fighting an uphill battle sometimes. But we will all face healthcare crises in our lives. And when we do, I would encourage everyone to harness those opportunities to remind us why we’re in healthcare innovation to begin with.”
~Wildflower Co-founder and CEO Leah Sparks on How My Healthcare Experience Inspired My Company
The quote from Leah Sparks accurately describes my experience during a recent Digital Health CEO Summit 2015 conference sponsored by Rock Health and Wharton in San Francisco. The conference was attended by 100+ CEOs of digital health startup companies spanning US, Korea, Finland, London, and Germany. More than 50% of these companies target enterprise providers (health systems, provider networks, payers or TPAs). Around 20% or more CEOs were serial entrepreneurs entering digital health arena. The event also saw top VCs/angels/bankers attend and provide advice. The top ones included- Morgan Stanley, Jason Calacanis, and John Doerr –Kleiner Perkins Caufield & Byers.
Digital health is attracting a lot of technology players in the market due the sheer challenge of solving a problem that directly impacts human lives. There are definitely few market trends that are gaining more importance in the digital health space than others.
Patient Engagement: The vendor community and the provider networks in general are observing the shortcomings of a traditional patient portal. Traditional portals fail to engage the patient in their care. Any care delivered without involving the patient whole heartedly, is deemed to be partial solution to the US healthcare challenge. Given this, the technology vendor community is seeing significant rise in solutions to engage the patients in delivering care. Whether it is mobile apps for patients to stay connected with their care team or remote patient monitoring devices, the technology community is helping open up a two way communication channel between patients and providers.
Price Transparency: The vendor community has realized that price transparency faces a threat of taking the form of wine shopping- costlier wine equates to higher quality. This definitely was not the intent of some of the early success in the industry, including Castlight Health. Consumers definitely benefit from more price transparency when it comes to commoditized offerings such as pharmacy, routine lab work, and regular checkups. The holy grail of price transparency lies in marrying quality data with price. Research has proven that high cost medical treatment is not necessarily high quality but the patients will benefit only when technology offerings can help correlate the two data points. Other than Castlight Health, companies like GoodRx and Health Expense are making good strides into the market.
Wearables: This trend seems to be a no-brainer for most of us. Interestingly, I have started to observe more and more technology vendors taking a step back and asking the question “What outcomes will this wearable drive?” This is the right mentality to grow the wearables market. The wearables market will succeed only when the devices can make significant impact on patient behavior. The number of apps and tools being built around Apple Healthkit and the recent news that more than half of US hospitals are trialling Apple Healthkit, it just seems like there is a strong ecosystem being built around it. With Epic, Mayo Clinic, Apple, and multiple startups partnering – this is definitely an area to watch out for. On the other hand, there are few companies, such as Nanowear, are taking a new approach to reduce the total cost of care than just changing patient behavior.
Other trends such as population health and evolving value based reimbursement are also influencing the vendor community. Given the scope of the population health challenges, it is definitely harder for startups to sustain the long sales cycle and hire domain expertise to provide an effective solution. This is where provider organizations are leaning on established EHR vendors to provide an effective solution.