We’re back with part two of our three-part blog series on Digital Health 3.0. This week, Robert Garber, Partner at 7wireVentures, explores challenges within healthcare, barriers to technology adoption, and how digital health might just be the fix we need. 

We need to focus on quick wins AND revolutionary change in digital health 

Backoffice activities like billing and claims processing can offer real opportunities for artificial intelligence (AI) and automation to remove costs. There is no requirement to change patient behaviour or clinical workflow making it a quicker win for health systems. Process efficiencies rarely make the headlines, despite having a material impact. 

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Digital health solutions that enhance existing clinical processes have started to show tremendous promise with measurable ROI. For example, clinical decision support tools (e.g., image analysis) that merge AI and technology to help clinical teams make sense of complex data, better target treatments, and improve outcomes will demonstrate significant value over time. 

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These examples offer incremental improvement rather than transformational change, and while important, they don’t move us towards the promise of empowering patients and personalizing care. Healthcare has many challenges that need to be overcome before we realize this goal, and as we enter a new era of digital health, we’ll need to seek more ambitious and impactful solutions to help us move towards this goal. 

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Healthcare is really sick care, fraught with many challenges

Many discussions focus on sickness rather than on keeping people healthy and out of the system. There are many reasons for this, not least that gyms and diets are not fun. Changing consumer behavior is especially hard when health literacy is lacking. Many people simply don’t know what to do to live healthier lives, how to access these resources, or how to afford them.  

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Misaligned financial incentives in the system do not help. Margins for novel drugs are high, fee-for-service care has proven resistant to change, and the transition to value-based care has been glacial. While digital health can be part of the solution, moving from sick care to well care won’t be a reality unless we address the structural limitations of the system, improve reimbursement for well care, and crack the code on getting consumers to take accountability for their health.

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We do not have enough healthcare professionals

Healthcare professional (HCP) burnout and shortage is a major problem in the healthcare system - engaging with physicians (primary care, ER, specialists) who are already overloaded is challenging. How do you ask burnt-out HCPs to try a new technology? How do you ask a doctor practicing medicine for 20 years to change how they deliver care? Short answer - you don’t!

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The initial success stories like Livongo took proven models and used technology to reduce the involvement of HCPs to deliver repeatable results. They got over the need to change clinical practice by leveraging technology to automate agreed standards of care - WIN/WIN.

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Trust and Money

Unfortunately, as our level of trust increases from Payer < Employer < Doctor, their availability to engage with us decreases. The average time for a doctor appointment is 7 mins - almost enough time to ‘break the ice’, not to mention completing a diagnosis and treatment plan. And things will only get worse as we predict massive labor shortages across most, if not all, healthcare professions. 

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But let’s assume for a moment that we can address the gap in terms of skills and resources and resolve the problem of time. The next question a doctor might reasonably ask is ‘will I get paid?’ Is there a code for RPM (remote patient monitoring)? The good news is that these codes are emerging, however reimbursement rates for these solutions are still relatively low. 

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With net margins for health systems hovering around 2-4% (pre-Covid), providers are seeking out new lines of business with significantly better margin structures and these incremental codes are unlikely to substantially move the needle on profitability for providers. Increasingly, providers will need to reevaluate and reengineer all aspects of care delivery to optimize better patient-driven care and sustainable financial performance, no easy task.

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Digital health literacy is a real problem

Have you ever asked friends outside of the digital sphere what they think and whether they’ve tried any digital solutions? Those in the NHS might have heard about Babylon before they exited the U.K. market, or similarly, patients in Germany might have heard of DiGA. However, it’s likely that the percentage of the population who know the name of even one digital health solution is small. 

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The net result is that we have a new type of health literacy issue associated with technology solutions - i.e., the patient must understand their disease as well as which digital solutions are best for them and which are available in their market. This problem plagues providers as well who have to sort through thousands of digital health solutions to vet those that have validated clinical data, are clinically appropriate, and can be easily used by the patient. 

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Barriers to digital health adoption

Apart from the healthcare challenges outlined, there are still other barriers to overcome to make digital health a reality. For example, in diabetes, an area transformed in the last decade by connectivity and digital health, continuous glucose monitoring (CGM) is becoming more readily available allowing people with diabetes to check their glucose levels in real-time or monitor glucose readings over a period of time. The technology is becoming more readily adopted by patients and physicians, however, there are still obstacles including cost, education, and availability. 

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Like many patients with chronic conditions, those with diabetes often have multiple comorbidities (e.g., cardiovascular or mental health issues) which start to multiply the complexity for patients and providers even further. Many employers work with 15-20 companies to provide a “full” suite of digital tools to their employees but often these lack interoperability, single sign-on functionality, or even common user interfaces. With these challenges, creating a holistic solution for the consumer that addresses their individual set of conditions continues to be extremely difficult. 

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However, there is light at the end of the tunnel. Digital initiatives are being explored that can help alleviate some of these everyday healthcare problems and overcome adoption barriers. 

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What can be expected in 2023?

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New care models are entering the market

Medical procedures (e.g. home dialysis, home infusion) apart from acute care, are being moved out of the hospital and into patients’ homes. Additionally, the hospital-at-home movement is growing, allowing patients to receive acute-level care in their homes. Technologies like remote patient monitoring devices are allowing HCPs to predict adverse events and reduce hospitalisations which in turn lowers healthcare costs. At the same time, chat-based and virtual consultations can help reduce unnecessary in-person visits alleviating HCP burden. 

Digital solutions are being deployed for a broader group of chronic diseases

We are seeing a wave of new solutions emerge across a wider variety of chronic diseases including respiratory, stroke, severe mental illness, and age-related diseases, that can help reduce costs associated with these complex and prevalent conditions. 

Big tech companies are entering the healthcare space

Apple and Amazon are driving new health models focused on consumer experience and world-class logistics. This year alone, we have seen Amazon further solidify its space within healthcare, with the launch of its virtual clinic, ‘Amazon Clinic’, its pending acquisition of One Medical and healthcare analytic tools (Amazon HealthLake Imaging and Amazon HealthLake Analytics). 

Innovation focused on reducing prescription costs

Increasingly, digital health solutions are tackling some of the more challenging problems associated with pharmacy costs including the surge of expensive specialty therapeutics (e.g., Zerigo Health), and the frustration of expensive Pharmacy Benefit Managers (e.g. Waltz Health).    

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The Road Ahead 

Although there are challenges, great promise lies ahead as we enter the next phase of digital health and integrate the learnings of the last decade. Over time, “digital health” will become a part of a broader and more holistic set of “health” solutions that integrate physical health, mental health, and social support resources for optimised care. For now, we need to stay focused on creating high impact solutions with clinical validation that meet consumers where they are and allow them to live happier and healthier lives. 

Stay tuned for next week’s blog, which explores digital innovation in pharma, why it has fallen short so far and how it can succeed going forward. And check out last week’s blog if you missed it: Digital Health 3.0: Past, Present, and Future.

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.

In the meantime, check out our previous report here.