Mike Sanders

Is your digital health strategy “bubble-proof”?

digital health strategyThe digital health market is starting to remind me of the dot-com bubble, when anything internet went from boom to bust. Back in 1998 I was with a start-up company that monitored equipment health, particularly equipment used to make computer chips. We were a software development company, but we did not have an internet solution and only shared in internet growth through semiconductor sales. Yet the company quickly raised 18 million dollars in venture funds. Then, three years later, after the bubble it was impossible to raise anything!

The digital health market has some similar characteristics. Everyone could see the move to on-line in the dot-com era. Today everyone sees the movement to connected patient-engaged digital platforms. The economics with accountable care are there, the technology is there and the users are ready. Digital health done right has such promise in reducing healthcare costs that it is a well-deserved “hot” investment.

Wild rides ahead for Digital health, akin to the dot-com era

But much like that dot-com era, exactly how the value and market will develop is not straightforward. Back in 1998 the ‘smart money’ was betting on companies like Cisco and Intel as they would owe the infrastructure. Facebook was not even in the picture. We did not even understand the internet market segmentation in 1998, let alone social media. Anyone remember MySpace?

So what can we learn from the dot-com era when building medical devices for the new emerging market of digital health?

Value is in the data nodes of the network

As technologists we have learnt a lot things since the “old days”. There is opportunity to add value to data and information at every node in the network. For medical device companies this is a golden opportunity as the data flow often starts right from the device, whether an implantable, ingestible, wearable or classic hand-held or bench top system.

To start, we need to invest in the core connectivity at the device and secure internet levels. This does not need to be complicated. For example, StarFish Medical has developed some simple yet powerful systems, using technology stacks based on common consumer-based IoT and responsive web interfaces.

Medical Device Data: Value for the Eco-System

Just like in the early days of the internet, there are a lot of unknowns and development in infrastructure. But the difference between then and now is that we do not need to sell to the investment community, and then build the whole system. Getting investment for the entire digital health vision, starting from a medical device business model is a tall order.

I love the comment from Lisa Suennen: “… they were never meant to be companies. They were meant to be products, or parts of products, or parts of companies. And as valuations are coming down, which they are, and as access to capital is becoming a little more challenging and there’s more need for evidence and proof that what you have is a legitimate solution big enough to be a company, you’re going to see more and more of this type of M&A. Of small good ideas that were never meant to be standalone, rolled up into bigger projects, into bigger companies.”

The investment community gets it: that there are large opportunities, but each company fits with an eco-system. Our value is in the fuel for that eco-system: high quality data from medical devices. By focusing on device data, our companies become very attractive to larger partnerships. The entire digital health concept is big eco-system integration but it starts with accurate, well curated data.

Partnership Opportunities

Again this is just like the early days of the dot-com era. Much like the internet back then, everyone gets the digital health eco-system… conceptually. But chances are you have not yet met your long term partner. The number of platforms, partnerships and acquisitions are large, and even historical markets boundaries (such as consumer wellness, primary care and tertiary care) are blurring.

The world is also different from the early days, given today’s connected infrastructure. Digital health will ultimately be part of today’s complex and multifaceted system. Functions range from cloud security to behavioural psychology and gamification; from low power miniaturized electronics from the internet of things to big data analytics and the intelligence of IBM Watson.

To illustrate, consider these words from Apple CEO Tim Cook:

“We’ve gotten into the health arena and we started looking at wellness, that took us to pulling a string to thinking about research, pulling that string a little further took us to some patient-care stuff, and that pulled a string that’s taking us into some other stuff. When you look at most of the solutions, whether it’s devices, or things coming up out of Big Pharma, first and foremost, they are done to get the reimbursement. Not thinking about what helps the patient. So if you don’t care about reimbursement, which we have the privilege of doing, that may even make the smartphone market look small.”

The infrastructure is not only complex but still largely undefined. Luckily that is not a large issue for medical device companies. We have the fuel for the network: the accurate validated data sets. Instead of looking at the infrastructure or the markets, we can focus on the data.

Which brings us back to whether your Digital health Plan is “bubble-proof”. It can be wrong in the details of the infrastructure. But if it is focused on the key value of the data that your medical device can bring to patients and care-givers, it will be right over the long term. The focus needs to be on key data connectivity and secure data access, not on the details of the final eco-system.

Data Connectivity to Secure Dedicated Repositories is Fundamental

The data itself can be huge, once it is picked up by the winning eco-system. The proof is in Metcalfe’s Law which states the value of a network is proportional to the square of the number of nodes of the system (n²).

To quote Steven Krein, cofounder & CEO of StartUp Health, “five, 10 years down the line as the implications of this vast amount of quantified health data take root, there will be the Facebook of personal health or wellness — rest assured.” We will be wrong in who and how that comes about, but we can be ready with that quantified health data.

Image: 20630807 – Canstockphoto.com

Mike Sanders is a StarFish Medical Business Development Applications Engineer. He writes digital health blogs on topics including mobile and cloud privacy, security and cyber threats.

 



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