Digital Health vs. Dot-Com Era

Comparing the digital health sector to the dot-com era is like apples and oranges – fundamentally different industries with their own unique dynamics. Some investors hoped digital health would pop with big returns, yet that has remained elusive for most. It can be a complex puzzle to solve from where I stand in the DTx space. Many seem to be looking for a magic bullet, yet, in my opinion, there are no shortcuts. Digital Health/DTx will have requirements that must be met to move forward.

What are some of the differences?

Regulatory and Compliance Challenges: Digital health has to deal with sensitive patient data, subjecting it to stringent regulatory requirements. Compliance with standards like HIPAA and GDPR can slow down innovation and adoption. Additionally, achieving HITRUST Certification takes time. What health system doesn't want its partners to have HITRUST Certification?

Complex Ecosystem: The digital health ecosystem involves various stakeholders: healthcare providers, payers, pharmaceutical companies, tech firms, and patients, to name a few. Coordinating these stakeholders and integrating solutions into existing healthcare systems is complex and can hamper adoption. For tech companies, connecting with one EHR system is not enough. Interoperability can be a challenge with hundreds of government-certified EHR products in use across the country, each with its own technical specs.

Long Validation and Adoption Cycles: Developing and validating healthcare products takes significantly longer than software or online platforms. These extended cycles can be a deterrent for investors and entrepreneurs. The selling cycles for hospitals, pharma, or integrated delivery networks can last well over 12 months.

High Bar for Evidence and Safety: Healthcare demands a high standard of evidence for the safety and efficacy of new products. This requirement can lead to extended clinical trials and substantial upfront costs. Talk to anyone working for or with CMS - they want US data that is ethnically diverse, geographically diverse, economically diverse, etc. Medicare and Medicaid cover nearly 1 out of 3 Americans, and they want data from their constituents. International data can be supportive but does not exempt you from needing robust US-based clinical data if you want CMS coverage.

Privacy and Security Concerns: Privacy and security are paramount in digital health. Concerns about patient data protection can pose a significant barrier to adoption. How do we remove data silos while getting comfortable with cloud storage and interoperability with multiple partners?

Reimbursement Challenges: Digital health startups need help securing reimbursement for their services, limiting their growth and sustainability. Getting FDA clearance does not mean reimbursement. Digital health companies must invest enough resources into clinical data explicitly designed for the payer market (insurance companies).

Fragmented Market: Healthcare is a highly fragmented market with diverse needs and many players. This complexity can make it challenging for digital health companies to gain widespread adoption. Where do you fit into the ecosystem? Medical benefits, prescription benefits, medical equipment, hospitals, HCPs, wellness, direct to consumer… The list is long!

Resistance to Change: Healthcare professionals and patients may resist change, making it difficult for digital health solutions to gain traction. You don't get coverage without utilization, and how do you get utilization without coverage? Remember, the federal government had to invest billions to get EHR adoption!

High Development Costs: Building and maintaining digital health products, especially those involving hardware components, can be expensive. Clinical trials cost $$$$!?

But here's the silver lining: Despite these challenges, digital health has significantly progressed in recent years. Advances in technology, growing consumer interest in health and wellness, and the impact of the COVID-19 pandemic have accelerated the adoption of telehealth and remote monitoring solutions. While it may not have seen the same explosive growth as the dot-com era, the long-term impact of digital health on healthcare delivery and patient outcomes will be significant and continually evolving. The advantages in access to care, minimizing health disparities, healthcare provider staffing shortages, eventual cost savings and convenience support Health Tech/DTx adoption.

Who will be the first authentic Billion dollar DTx brand?

?

#DigitalHealth #HealthcareInnovation #HealthTech #Progress #PatientCare