Digital Health Showcase: State of the Industry Report

January 19, 2016 ctheodoropulos

Digital health is a young, vibrant industry with great transformative potential. Now, after five years of buzz, it’s beginning to deliver on that potential with opportunities for drug developers, clinicians and patients, according to speakers at the Digital Health Showcase, held in conjunction with Biotech Showcase™ 2016 January 13 in San Francisco.

This industry is possible today only because of the convergence of big data analytics, clouds computing, biosensors and personal IT that makes it practical to collect, store and analyze gargantuan quantities of data, and consumers’ eager embrace of all things digital. Consider smart phones and fitness trackers ready examples. In today’s healthcare environment patients are consumers, expecting the same convenience in medical solutions that they experience with their personal computing devices.

DHS

Digital health companies understand this and are working “to transform healthcare delivery and the therapies that are available,” said Yarmela Pavlovic, partner, Hogan Lovells. And, given the challenges in healthcare, transformation is a very attractive, potentially lucrative, proposition.

“Investment in digital health has been at record levels the past two years and is expected to reach USD 20 billion by 2020,” Pavlovic said. To actually reach that point, “companies are beginning to focus on demonstrating outcomes, providing clinical utility evidence to payers and integrating big data analytics into a population-based health approach,” said Kevin McRaith, CEO, WellDoc.

That evidenced-based approach will shake up the digital health market, causing some companies and investors—particularly those from consumer industries—to leave the healthcare market. This shakeout ultimately will make it stronger, as companies meet healthcare regulatory requirements that are far more stringent than those for consumer products.

Opportunities are abundant for savvy entrepreneurs. For example, Vivek Bhatt, chief technology officer, GE Healthcare Life Care, pointed to what he called “the sickness aspect—getting people healthy and keeping them that way.” This could have a particularly profound effect in managing chronic illnesses, which accounts for much of the cost of healthcare. “The monitoring tools used for chronic conditions can also be used in clinical trials, opening the possibility of continuous feedback and drug-like interventions delivered digitally,” added Eric Elenko, executive VP, science and technology, PureTech.

“Medical adherence is another big opportunity,” Christine Lemke, chief product officer, Evidation Health, said. Digital health solutions can contribute to behavior changes around pharmaceutical regimen compliance and understanding risks, and driving new businesses based on those new insights.

The challenges faced by digital health combine those of the biopharmaceutical industry with those of the IT and medical device industries. For example, although digital health company WellDoc has FDA approval for its software and an NDC code for reimbursement, it also must have a “note to file” to allow it to initiate software updates. That makes software updates difficult and slow to occur. “Regulations need to be more nuanced to allow companies to iterate on their products for patient engagement and to move the needle on patient behaviors,” Lemke said.

Other challenges include how to fit digital health devices into the normal workflow for caregivers and payers, and how to develop user interfaces that patients actually will use.

Reimbursement is another challenge. “As yet people don’t understand how to fund and reimburse these things,” Lemke said.

Attracting the right talent for the development team is also challenging. The problem, McRaith explained, is finding “people who really understand healthcare at a very deep level, combined with true software and consumer expertise. This requires specialized talent.”

The digital health industry also must fit itself into the existing, traditional healthcare model. As Elenko elaborated, “Think about Uber and Airbnb. The system bent to them. But in healthcare, it doesn’t matter how good your product is, the system will not bend to you. You bend to the system.”

The reason, Bhatt said, is the lack of individual choice in healthcare. “You’re part of a big, heavily entrenched system. Change comes slowly. Therefore, find the problems in the system and the people who care about fixing them, and work together.”

In doing that, patients and patient advocates are natural allies for digital health companies. “Empowering patients is one of the strong points of digital health,” Elenko pointed out. Their involvement ensures that patients’ needs aren’t obscured by those of payers or other stakeholders. “Having both the patient and caregiver perspective of a digital health technology is critical.”

The digital health industry is new and much remains to be learned. Some things are obvious, however: digital health solutions are vastly different from consumer devices. They demand more rigor and come with more regulation. Moving forward, their success depends heavily upon proving clinical value to caregivers and payers, and designing solutions that patients embrace.

 

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