"Break things and Move Fast" – is it time to re-evaluate the impact of digital health?

Digital Health has held much promise to disrupt, democratise and demonetize health care over the last decade. However recent events suggest that we need to rethink the impact and adoption of these solutions.

We have witnessed the recent demise of Babylon Health, a company borne out of the UK with the tagline of “Dream Big. We have a big dream - to put an accessible and affordable health service in the hands of everyone on Earth” This of course was and is a very laudable ambition. Founded in 2013, this disruptive company launched its telemedicine platform and promised AI at the heart of its solution for the future of healthcare. The problems faced by Babylon were numerous as I explained in my LinkedIn post below from too rapid scale, too large an investment, inadequate AI, opaque business model and ultimately poor revenue. Babylon went from a market cap of $4 billion post SPAC to bankruptcy and only could sell its telemedicine platform for $600k. Link to my article on Babylon Health

There are many parallels of Babylon Health and Pear Therapeutics, both founded in 2013 and ended up with the same fate in 2023. Pear Therapeutics had three FDA-cleared prescription apps to help treat substance use disorder and insomnia. Digital therapeutics was the darling of pharma companies looking to enhance their offering to either replace or complement to increase compliance and utilisation. The Boston-based company, which went public in a SPAC deal valued at $1.6 billion in December 2021 filed for bankruptcy in 2023. The average price of behavioural therapy using Pear’s apps was $1195, which users were meant to be used in conjunction with ongoing treatment by a doctor. In 2022 there were more than 45,000 prescriptions written for Pear’s products but only around half were filled and the company was able to collect payment for only 41% of those. Not surprisingly that same year Pear reported an operating loss of $123.4 million on $12.7 million in revenue.

In 2019, the health behemoth called Haven was set up by three of the largest companies in the world, JP Morgan, Berkshire Hathaway and Amazon and aimed to provide U.S. employees and their families with simplified, high-quality, and transparent health care at a reasonable cost. Adding world-renowned surgeon Atul Gawande at the helm as CEO and unlimited resources at their disposal surely success was guaranteed. However, within 3 years this group of rockstars disbanded without hitting the Billboard top 50. The reasons for this were numerous including an insufficient number of patients to squeeze lower prices from the providers, the fact that health care was rewarded for inpatients and sick care as opposed to preventing illness and COVID disrupted the mission as it became the number 1 priority for health care systems.

Teladoc, the highly successful telehealth company acquired Livongo in 2020 in a deal worth and eye-watering $18.5 billion and was the largest digital health deal in history. Teladoc was a leading provider of virtual visits, whilst Livongo was a leader in diabetic care and remote patient monitoring. There seemed to be a rush to complete this acquisition in only three months as the companies looked to leverage the financial tailwinds, telehealth boom and investor interest in digital health spurred by the COVID-19 pandemic. By 2022 Teladoc Health reported a historic loss of $13.7 billion in 2022, mostly from a write-off related to the plummeting value of its Livongo acquisition.

“Break things and Move Fast,” has often been associated with the culture at Facebook and some other fast-growing startups. The saying implies a commitment to rapid innovation and development, even if it means making mistakes along the way.

The advantages of this are.

• Rapid Innovation: Fast-paced development can lead to quicker innovation and adaptability.
• Early Market Entry: Being first to market can offer competitive advantages.
• Learning through Mistakes: Mistakes made early on can provide valuable lessons.
• Dynamic Culture: Creates an energetic and dynamic company culture focused on growth and development.

There are considerable disadvantages.

• Quality Issues: Quick decisions and rapid changes can lead to mistakes and quality problems.
• Burnout: The pace can be stressful and lead to employee burnout.
• Sustainability: It can be difficult to maintain this pace in the long term.
• Customer Trust: Repeated errors may erode trust among user base.

The “Break Hard and Break Fast” approach isn't universally appropriate, particularly in healthcare so a more cautious approach is warranted. A balanced approach may be more suitable:

• Iterate Quickly but Thoughtfully: Move fast but with strategic planning and reflection.
• Value Employee Well-being: Acknowledge and work to prevent burnout.
• Customer-Centric: Prioritize customer trust and satisfaction even while iterating.
• Learn from Mistakes: Develop a culture of learning and adaptation.

Final Thoughts

I think that maybe collectively we expected too much from digital health solutions. Perhaps the world is not ready for change and scale and moreover the providers are not nimble enough to support disruption or are too cynical not to cannibalise their own business models.

Maybe we should take heed from the Aesop Fable and accept, albeit reluctantly, that "slow and steady" will win the ultimate race of digital health.