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Healthcare stakeholders are still wary of digital health – Business Insider UK

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Even though the digital health industry is steadily maturing, health tech companies might still have a long way to go when it comes to establishing themselves as viable partners for entrenched health firms.

Nearly Half Of Healthcare Stakeholders Aren't Planning On Forging Ties With Digital Health Firms


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Forty-four percent of leaders working across the healthcare space said that they’re forgoing partnerships with digital health companies because of a lack of value proposition (18%), paltry payer reimbursement for the products (13%), and because it could open the door for cyberattacks (13%), according to law firm Ropes & Gray’s recent survey comprised of 300 respondents operating in healthcare.

Here’s a breakdown of why digital health companies are giving healthcare leaders pause. 

  • Nearly half of respondents think that digital health companies don’t understand the market they’re operating in. This notion could be fueled by tech firms’ notoriety for adopting the “move fast and break things” approach touted by tech guru Mark Zuckerberg, which doesn’t always fly for companies operating within the strict regulatory confines of the healthcare industry.
  • More than one-quarter report that digital health products aren’t useful — either because they’re not effective or don’t cut back on spending. This is likely because potential partners feel bogged down sifting through the hundreds of thousands of digital health solutions on the market — a large share of which never launch. And with the FDA’s recent announcement that many mobile health solutions will remain outside its regulatory scope, healthcare leaders might remain suspicious of solutions that haven’t demonstrated effectiveness.

Digital health newcomers should therefore make concerted efforts to curry favor with healthcare incumbents.

  • Stocking teams with healthcare pros could help companies establish credibility. Hiring leaders who have experience in healthcare roles can help startups navigate the industry and pinpoint what sort of innovation is need-to-have. We’ve seen some companies in the digital health space carving out positions for leaders with healthcare expertise: Insurance startup Clover Health ditched a chunk of its tech employees to make room for healthcare hires in March — just before debuting its drug development offshoot. And we’re seeing some tech companies operating on the periphery of the industry adding C-suite healthcare roles: Direct-to-consumer prescription delivery startup Hims & Hers, for example, hired its first chief medical officer in July. Having experienced healthcare leaders guiding operations and strategy could help prove to other stakeholders that a healthcare upstart is well versed in the space.
  • Flaunting their cost-effectiveness should help digital health firms rope in partners. Firms that provide metrics for the dollars and cents their products could save healthcare companies will likely find the most success: For instance, chronic disease management company Livongo — which partners with payers — revealed that it can help save employers $90 per month per employee using its diabetes therapy. And fellow digital therapeutics firm Propeller Health’s inhaler sensor and accompanied app boosted medication adherence in asthma patients by 21% — which could help payers stave off some of the $300 billion annual costs associated with patients not taking their medication. As the digital health space becomes more crowded, rolling out data revealing the savings benefits of their solutions could prove crucial for players in the field.

Despite many leaders’ persistent wariness of digital health companies, we expect to see more partnerships — especially forged by providers — in the coming year. Over 40% of respondents said they’d link up with an AI partner in the next year, according to the Ropes & Gray survey.

And more hospitals are planning on implementing predictive analytics strategies, which execs say could pare down costs by 15%. This provides an opportunity for AI companies to form big-scale partnerships: We just saw North Carolina-based health system Novant Health enter into an alliance with Georgia-based startup Jvion, for example.

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