I had the chance to attend Rock Health’s Digital Health Summit, a really well-run event which brought many of the major players from all different sides of the healthcare system. I took notes throughout the two-day event, and wanted to put down some of the more overarching themes I saw come up across the different discussions. This is definitely not a comprehensive list, and I highly recommend watching the conference videos when they’re available.
Major themes:
Digital health is very different from tech (especially time horizons)
Probably one of the biggest overarching themes from the conference was highlighting the difference between tech and digital health. Health is a gigantic, lucrative, and essentially recession-proof business but takes time to get there due to regulatory issues and the need for outcomes data (constraints tech faces less of).This is especially important on the investor side, where VCs might see explosive growth in consumer tech companies, but need to buoy those expectations with health companies. Chamath Palihapitiya of SocialCapital frequently returned to the quote that “It’s better to be long-term greedy, than short term greedy”. Almost every investor that spoke from the VC side emphasized that venture capital as an asset class was designed to make risky bets on companies that have longer return timelines, so healthcare is an important place for them to be. As Noah Lang of Stride Health said, “Important thing is to be patient” (guessing he didn’t intend the pun, but it worked).
Another huge aspect that makes regular tech and digital health different is the need to show evidence and the inability to have a soft landing. Tech is known for pushing out products and iterating as they get feedback especially when things aren’t working. Health is different because you cannot fail, people’s lives are at stake. And because of that, potential customers want to see actual impact from these companies before they sign up (which presents the catch-22 of “how do we get evidence if we can’t get customers?”)
Care needs to be more personalized/local
As we move towards value-based care (as opposed to fee-for-service), attention to patients is being given new priority. And because of this, the old system of fitting patients into a one-size-fits-all mold is ready to be disrupted. Many companies are doing this, whether it’s using software to connect customers/patients with the correct caregivers that match their preference (like Honor), making sure the coaches continuously work with the same users to understand their needs (like Lantern), or helping users find the right insurance company for them (like Collective Health). This is a great time for small and nimble companies to find niches that they can appeal to, which allows them to compete with some of the larger entrenched players.
Preventative medicine is what’s cool right now (and still growing)
The Affordable Care Act and Affordable Care Organizations have increased the market size and importance for preventative medicine, and lots of companies are ready to operate in this space. By providing more individualized care, we can make sure that patients are identified as at risk and helped before they have to enter the hospital. Lyra Health does a good job of this by identifying patients that might need their behavioral health services at critical moments by using data (like after pregnancy or coping with chronic disease). In fact, the goal of the Human Longevity project as a whole is being able to use genomic data to identify problems before they occur, rooting the company in preventative medicine. As we get more data from patients outside of hospital settings, it will be easier to identify those who are at risk.
Lots of entrepreneurs are coming from tech into digital health
It was interesting to see the number of entrepreneurs that were jumping into healthcare from tech (even if they didn’t have a background in the field). On the panels were David Ebersman from Lyra Health (previously Facebook), Ali Diab from Collective Health (previously at Qwilt Software) and Alejandro Foung from Lantern (previously at Trulia), as well as many entrepreneurs I met at the reception with similar backgrounds. Coming from tech brings positive qualities, like the willingness to break systems when they aren’t inefficient, the desire to move quickly, a strong customer oriented focus, and the absence of status quo that’s generally seen from people that have worked in the healthcare industry for a while. However, it’s important going into healthcare to understand more patience is necessary (see above) and behaviors are very different. In tech investors/customers care much more about your growth. In healthcare people care much more about how much money you’re saving them, and want data to back up your claims.
It’s all about the data, and that data needs to be open. We need better interoperability.
New data is being created by the boatload, and healthcare is not doing a good job keeping up with this. As James Park, CEO of Fitbit, said, the wearables they create allow people to visualize something that was previously invisible (your activity). As wearables, diagnostic tests, online portals, etc. create and accumulate data, we need better ways of packaging it and making it usable so that doctors and systems are not bombarded with noise.
Unfortunately, due to tight regulations surrounding health data, outdated EMR systems, and hesitance about data quality, there is very little communication and interoperability between systems. These separations will need to come down in the future for any progress to happen. As J. Craig Venter of Human Longevity said, the innovations in genomic data/linkages that his company is doing with the genome are “only useful if the data is available”.
Siloing health problems is no longer the way to go
Healthcare has historically taken an approach of focusing on one issue at a time, but “integrated care” is coming into the spotlight as more people realize the cost of comorbidities. J. Craig Venter spoke at length about how different alleles and phenotypes are interconnected, and we need to look at the system as a whole. More anecdotally, several presenters spoke about how patients with chronic diseases who subsequently develop mental health problems as a result (such as depression) are much costlier to the system than either problem alone. However, reimbursement from insurance companies currently isolates each condition separately, even as more evidence mounts that it’s not the case. In the future, we’ll be able to use better data to understand how these correlate and better treat and price our patients.
Huge digital health goal is to improve efficiency -> remove humans from non-core functions
One of the biggest improvements digital health can bring is to improve efficiency. Many startups that spoke talked about how they’re trying to remove any process that isn’t a core function of a healthcare professional (Sandy Jen from Honor spoke extensively about how their software removes a lot of the tedium aspects from caregivers that are not directly related to taking care of their customers). By using software, not only can more time be dedicated to better care, but allows for better scale so that practitioners, coaches, and caregivers can see far more people in a far shorter time.
Branding is extremely important
The concept of a brand came up several times in different aspects. The first was DJ Patil, explaining that branding for software workers in government needs to change, with workers being called “IT” when in reality they’re designers, programmers, product people, etc. and it’s important to recognize them as such. Sandy Jen from Honor spoke about how people are adamantly against people putting their parents into homecare services, but if positioned as “someone coming to check on your parents every couple of weeks”, people are much more receptive. And finally David Ebersman from Lyra Health talked about the importance in phrasing and methodology of outreach when talking to people that might be at risk for behavioral disorders (as well as a wider conversation about behavioral health as a whole, which still sees a lot of stigma).
The current regulatory framework is broken
There was a unanimous battle cry among everyone at the conference about the need to change and address the broken regulatory issues. Chamath talked quite passionately about this issue, and explained that the capital intensity required to get through the FDA process was what allowed companies like Axovant etc. to go public at crazy high valuations without any products out and created a secondary issues where many investors were scared that regulatory burden would cripple their investments before they could even get to the starting line. Leslie Botorff of GE Ventures outlined the different levels regulation the FDA imposes, and how startups are trying to find ways to stay in the less heavily regulated classes of FDA approval. On top of FDA issues, the need to be HIPAA compliant is one of the driving reasons why interoperability and data sharing is such a complicated issue in the country.
Developing countries great places to start digital health companies
Developing countries have become ideal places for investors to look to invest in digital health companies. Not only do they have less stringent and complex regulations (which result in lower costs to start companies and more open uses of data), but the governments in these areas are much more concerned with increasing the population health of their citizens so that they can compete with the standard of living in the US. In addition, the massive populations and their growth (in India and China specifically) yield extremely high patient to doctor ratios, which creates a strong demand for more efficient systems. Combined with a growing working class that will have more income to spend on healthcare, the arenas outside the US are starting to look promising.
Once again thanks to Rock Health for putting together a really amazing event with a great set of speakers. Did I miss anything major? Feel free to reach out to me on twitter @nikillinit to talk more.