I have reviewed hundreds of digital health companies in the last year. With nearly $8 billion invested in more than 500 digital health companies in 2016 alone, the inflow of ideas and opportunities has grown at a record-breaking pace. The potential for many of these companies to transform healthcare is clear, but first, they need to cut through the noise and differentiate themselves in a crowded field. Even more challenging is for industry leaders to identify a clear corporate digital health strategy and set goals.
Why is it difficult to identify the correct strategic goals?
First, digital health companies originate and initially operate in a world separate from the life sciences industry, with an aim to solve a problem rather than a goal of fitting into a healthcare ecosystem. Second, many technology and life sciences companies are playing catch up and get lost in the weeds by looking into how the digital health offerings can enable their portfolio or product strategy rather than thinking of digital health strategy separately as a whole. Third, digital health offerings are divided into an overwhelming number of categories, distracting companies from identifying their strategic direction and instead focusing on the various, often arbitrary, classifications.
What should companies focus on?
The key to a winning strategy in digital health is to look through the healthcare ecosystem lens and classify strategic positioning based on the key life sciences pillars:
- Patient need
- Physician adoption
- IP protection
In applying these levers, the entire digital health space can be divided into the following three buckets:
- Connectivity, data utilization and collection. With the goal to enable better clinical decision support and data collection and analysis, among other applications, this bucket is of particular interest to pharmaceutical, biotechnology, diagnostics, and medical device companies. With limited reimbursement, IP, and physician adoption hurdles, this area includes patient stratification tools, medtech wearables enabling trial design protocols, clinician interaction portals and tools for efficient trials, data visualization for drug discovery, mobile apps connected to medical devices, and real world data platforms.
- Wellness, patient and physician engagement and education. Of particular interest to digital and technology companies, telecommunications, concierge clinics, hospitals and health systems, this bucket shares less in common with life sciences offerings and more with tech opportunities, scoring low on IP and regulation. From apps and tools measuring health data to give patients the ability to track health information and manage disease, and patient-physician interaction and communication tools, to virtual reality and tools for physician education, the emphasis is on providing the ultimate user experience and platform. Data collected and used here is not to be conflicted with the type of data collected and used for patient diagnosis, monitoring, and treatment, described in bucket 3.
- Precision medicine and disruptive diagnostic and therapeutic tools. This bucket contains all the elements of the life sciences industry, including high IP, regulatory, physician adoption, and reimbursement hurdles. It also, however, presents the biggest opportunities in healthcare, and specifically in a value-based system based on outcomes. These companies include digital tools for patient analysis, diagnosis, treatment, and monitoring, such as AI, genetic screening, bioinformatics, and big data analytics to predict outcomes. Pharmaceutical companies, biotechnology companies, digital and technology companies with appetite and appreciation for and strong expertise in regulatory environment are all looking externally or building internally these tools, but many underestimate the relevant challenges of bringing these technologies to market. And often undervalue the healthcare economic impact these technologies will have on the healthcare system in the next ten to fifteen years.
The reality is that by 2030, there will be clear digital health leaders, and the need to articulate, create, and execute on a long-term strategy in the digital health space is evermore present today.
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