Can Health Testing Be Consumerized?

Powerful devices in people’s pockets and homes.

An increasingly burdened healthcare system.

Patients wanting to control their own health, including access to their data.

Earlier detection and constant monitoring to lower costs and improve outcomes.

These main forces are rapidly changing the face of health testing. Indeed, the question is not whether health testing can be consumerized or not, but when. Here are three main factors that startup decentralizing health testing are and need to continue addressing.

1) Product -- How To Get Adoption?

Most companies so far, from 23AndMe for genetic sequencing to uBiome for microbiome analysis, have opted to go direct to consumer. This makes sense generally when there are no reimbursement codes and the go to market is lengthy.

But building a health business on the backs of consumers is also extremely challenging.  Self-insured employers are a typical hack in the digital health space but despite many employer-paid products around heart, diabetes, obesity and wellness in general, do not underestimate the barriers to adoption. Any survey of employee attitudes will find most are grudgingly okay with employers paying for such programs, since there is a lingering fear they will access the data also.

To get true scale one must embrace FDA regulation and long sales cycles into providers and payors. And for that, startups need to have enough time and capital to gather clinical evidence. The good news though is once you overcome the hurdle you are also much harder to displace.

2) Business Model -- How To Have Recurring Revenue?

In principle testing lends itself naturally to a recurring model. AgaMatrix pioneered blood testing through the iPhone a decade ago and built a business around replenishing the glucose strips. Arivale’s products include full genetic analysis with three coaching calls, multiple options for more coaching and further body analysis, and plans for weight loss and heart health testing -- most of them monthly subscriptions.

The obvious challenge is that human beings are not logical. If our tests are showing good results some of us will simply neglect doing further testing. If our tests are showing bad results some of us will simply stop testing also because we want to ignore the bad news. It’s a similar motivation to a non-trivial number of people who don’t want to test in the first place. And if the testing is simply about knowledge ie doesn’t lead to an action, then surely very few people will sign up for it.

What this all means is if you segment the market based on attitudes, a recurring business model is actually hard. Entrepreneurs be warned: top-down numbers around the market are deceptively attractive, what they will have to fight against is high CAC, low LTV, and high churn.

3) Platform -- How To Go Beyond A Single Test?

The word tricorder signifies a device in the palm of your hands that can test (and in Star Trek even treat) you comprehensively. It remains an elusive goal despite there finally be a winner for the X-Prize around it. Testing for multiple conditions simultaneously is surely the holy grail; all of us want a test that takes little effort, is quick, and comprehensive. Think Theranos if it had actually been legitimate and not a fraud.

Blood is an obvious substrate but it does involve a needle. The less invasive way of measuring multiple conditions is what our bodies produce and release naturally. Healthy.io, Scanaflo, Scanwell are all currently focusing on urine, Toi labs has a smart toilet, and there are plenty of efforts on measuring diabetes using sweat.

The challenge for all of these is getting enough sample size. Labs today will collect enough to clean the sample and test multiple times, both to minimize error. Ensuring accuracy and precision with microsamples remains a technological barrier.

This article is inspired by a conversation with Aleks Swerdlow. These are purposely short articles focused on practical insights (I call it gl;dr -- good length; did read). I would be stoked if they get people interested enough in a topic to explore in further depth. I work for Samsung’s innovation unit called NEXT, focused on early-stage venture investments in software and services in deep tech, and all opinions expressed here are my own.