It’s no secret that digital health is at a crossroads with a new era for digital health innovation on the horizon. HealthXL has long accompanied clients along this journey and we are preparing the industry for what comes next. To kick things off this January we are bringing you a three part blog series focused on the next phase of digital health - Digital Health 3.0 - authored by leading industry experts who succinctly explore how we’ve landed at this crossroads and hypothesize on what’s next for digital health.
In the first blog of the series, Martin Kelly, Founder and Chair at HealthXL, reflects on the evolution of digital health, successes and the path ahead.
Healthcare continues to resist ‘digital’
The macro environment is challenging across the board; this year we have witnessed inflation, layoffs and the threat of another recession. Healthcare is not being spared - the investment taps have been turned off. However, unlike other sectors, there has been little adoption of digital technology over the last 20 years. Finance, travel, entertainment and news have all been transformed, however, the glaring exception has been health-care.
Let’s rewind - how did we get here?
Digital is the answer but what’s the question?
The concept of digital health first arose in the early 2000s. Underlying this new language was a desire to stand out from ‘traditional IT’ as a back-office function and position tech and tech teams as key players in an exciting new world of transformation and disruptive innovation.
It wasn’t long before venture capitalists (VC’s) who had flooded other industries started to ‘get it’ - they could visualize just how tech might solve healthcare’s biggest problems. As the investments started to flow into new startups, it was not long before corporations also started to explore what their role might be in this new world. Innovation teams began to crop up as software began to eat the world. New roles, new teams, innovation was everywhere. There was fear you would be branded as old school if you didn’t embrace disruptive innovation and see how tech was the answer to healthcare.
Google, Amazon and Apple all transformed media, travel and retail - healthcare needed to be next. Fear of missing out (FOMO) is a powerful force which significantly influences human behavior, so digital became the de facto answer regardless of the question.
Innovation budgets must be spent
With everyone piling on, the ship inevitably becomes unstable. Rarely if you give someone a role and budget will they talk themselves out of doing the job or not spending the allocation. Building point solutions seemed like the correct path, even though most patients were on multiple medications and unlikely to use multiple apps. A negative user experience and disjointed products are the unfortunate by product when the innovation budget must be spent.
The language around digital and innovation developed but proving business value emerged as the main challenge. The main topic of conversations was the potential of these technologies rather than what specific business problems they could solve. As a result business leaders switched off and focused on delivering core metrics and growing the business rather than brainstorming with the digital team.
However, we’ve come a long way and saw some successes
Digital health has been with us for years and has led to successful initiatives and great improvements in healthcare. During the COVID pandemic, while many other industries crumbled, the healthcare industry thrived. For instance, the pandemic fueled the transition towards telemedicine. Telemedicine use under Medicare increased tenfold from about five million services (in April-December 2019) to more than 53 million services during the same months in 2020. Remote patient monitoring devices allowed clinicians to remotely monitor patients from their homes and decrease the risk of exposure to COVID within hospital settings.
Life sciences companies have also benefited from advancements in technology and digital health. Drug discovery has seen the introduction of artificial intelligence technologies that shorten the time to target and lead identification significantly. Clinical development teams have seen the introduction of new trial formats - decentralized clinical trials - that can help with trial recruitment and retention and improve data diversity.
Going forward ROI and clinical validation are a must
But we’ve fallen short of delivering transformative products at scale and have unfortunately clung onto the old health system principle, that of treating problems when they arise instead of intervening before they do. The industry is facing a time of smaller budgets and wiser spending, which often leads to some of the best innovations. As we enter this new era, Digital Health 3.0, business leaders will double down on business impact/value and ROI - focusing on asking the right question and in tandem, standing up initiatives that matter most. Digital health has untapped potential and we need to unleash it over the next decade.
Stay tuned for next week’s blog, which will examine challenges within healthcare and how digital health might just be the fix we need going forward. Are you interested in learning about our community's thoughts on this topic? HealthXL will be releasing a report exploring the role of digital health in pharma and in true HealthXL fashion we’re consulting with our community to bring you insights from industry leaders.
Check out our past reports here.