Life is becoming more digital. The healthcare industry is no exception. Technology has been a boon to the healthcare field, and it’s changed the way we interact with our doctors, how we monitor our health, and even how we get medical information about ourselves.
According to Grand View Research, “The global digital health market is expected to grow at a compound annual growth rate of 15.1% from 2021 to 2028 to reach USD 295.4 billion by 2028”
It’s also one of the fastest-moving industries in healthcare, with new products and services introduced on an almost daily basis. For those who want to start their own digital health company or launch digital health initiatives, there are many things to consider and questions to answer.
The following guide will discuss how you might answer these questions and introduce some must-have tools for any aspiring digital health innovator looking at launching into this fast-paced industry.
Table of Contents
What Is Digital Health?
Digital Health refers to the convergence of healthcare with digital technology, such as mobile devices or wireless networks, to deliver medical care.
The term digital health has expanded to encompass a much broader set of scientific concepts and technologies, including genomics, artificial intelligence, analytics, wearables, mobile applications, and telemedicine.
In addition, digital health technologies are being applied much more broadly in medicine to include diagnosis, treatment, clinical decision support, care management, and care delivery.
In 2018, the World Health Organization issued a detailed taxonomy of Digital Health, articulating dozens of facets of this expanding space.
For mobile health applications alone, there exist more than 3,00,000 health apps with more than 200 health apps added daily.
This highlights the increasingly voluminous and cluttered landscape all healthcare stakeholders—patients, providers, payers, industry, and regulators—must navigate.
Their challenge is finding solutions that provide real value.
Currently, no reliable mechanism exists to identify validated digital health solutions. Payers, too, cannot easily identify quality in this crowded field.
Despite this, Investment in the digital health sector is enormous, with nearly $6B in funding in 2017, increased from $4.4B in 2016.
Given these conditions, there has never been a better time to create and develop digital-first healthcare solutions.
What Are The Benefits Of The Digital Health Industry?
If you’re going to jump into the digital health industry, you’re going to need to know its main selling points. What makes it that much better than the traditional medicine system?
There aren’t many issues today in the healthcare sector that digitization cannot address. It offers us a new way of thinking about and addressing things like patient engagement, chronic disease management, cost containment, and even mental health.
Here are some of the key benefits that drive so many entrepreneurs to launch their digital health businesses:
Coordinated Collaboration
Digital health is about reducing the fragmentation in healthcare today and using technology to allow doctors, specialists, nurses, and medical centers to work together seamlessly.
This past year spent wrestling with the COVID-19 pandemic showed us exactly how crucial telemedicine can be!
Transparency
Digital health also provides increased transparency for patients by providing them with information on their treatment options through e-diagnosis or remote monitoring tools. This gives them a greater understanding of the treatment they are receiving.
Digital health has also enabled patients to interact with their doctors through mobile apps and monitoring devices, creating a new level of connectivity for both parties that helps build trust between doctor and patient.
Cost Containment
Digital technologies can help contain costs by reducing hospital readmissions and providing patients with personalized care in their own homes.
Digital health can also provide patients with an alternative to expensive office visits and measure how well they are doing at home with their daily activities and medication. This can help improve the quality of life for those suffering from a chronic disease or managing an injury.
Mental health is another area that has shown a lot of promise with digital health solutions. These include online counseling and education and tools like mood trackers to help monitor the effects of mental illness, virtually eliminating the need for an office.
Time-Saving Technologies
Digital healthcare offers time-saving technologies by dramatically reducing the length of appointments through interactive chatting tools or other online screening programs. This frees doctors and nurses to handle more patients, allowing them to serve a larger patient population.
Digital healthcare also helps eliminate the need for unnecessary office visits through remote monitoring devices and digital therapeutics that provide users with real-time updates on their blood pressure or glucose levels.
Lower Barrier to entry
Finally, you don’t need to build a hospital or clinic to get started in digital. It can be much simpler than that, particularly if you find a digital health solution that lets you use existing facilities.
With so many opportunities available to get involved in the digital health industry, this is a great time for people with all levels of experience and backgrounds to start exploring.
The Tech Stack in Healthcare
Source: statinvestor.com
The data on this chart displays the estimated size of the mobile medical apps market worldwide in 2017 and a forecast for 2025. In 2017, the total global market was valued at around 2.4 billion USD. It is projected that by 2025 it will rise to over 11 billion dollars.
Digital healthcare includes various technologies like therapeutic apps that have emerged from Silicon Valley over the last few years. The emergence of companies like Apple, Samsung, and Google into this space is undoubtedly a signal that the future of healthcare is digital.
The digital health slippery slope
But beware, digital health applications rarely stay that way. The relationship with a patient can only be built up so much with pure technology.
Furthermore, the revenues of direct-to-patient digital health are paltry compared to the beefier nature of digital health provider organizations.
Consider mental health, for example. Although they are great tools, there’s an inherent ceiling to the care and guidance that solutions like Headspace, Calm, or Big Health can provide.
What happens when cognitive-behavioral therapy (CBT) isn’t working? When is the anxiety too much? It’s a logical evolution to try to break that ceiling with services, build a path of escalation and capture more revenue from payers or employers.
“A few care managers or coaches would be a cool new feature,” thinks the astute Product Manager.
From there, with that one well-intentioned thought, the slippery slope from software-only to full-blown digital health provider organization has begun.
How to Find a Lucrative Opportunity in Digital Health
There are many ways to get involved in the burgeoning field of digital health. There is often a need for people with skill sets that go beyond those who have degrees or advanced training – which means there are plenty of opportunities available, especially when it comes to entrepreneurship.
You can find out about these opportunities by attending meetups and conferences, networking, or reading about the latest advances in healthcare technology.
For anyone looking to invest in a digital health startup or enter the field, we have some helpful advice:
Related: Here’s our Guide to Building a Digital Health Company in 2023
Understand the Digital Health Ecosystem
Before you begin your digital health journey, you should first do some homework by understanding market dynamics, existing players, and public and private reimbursement schemes.
I’ve reviewed what you need to know about telemedicine and reimbursement specifically for digital health.
But digital health is broad, so let’s take a step back here to align definitions. There are essentially three main sub-genres, with overlap and evolution creating a fun Venn diagram:
Patient apps
This is the category of consumer-facing health applications on mobile, web, or other platforms. These are typically pure-play software solving a specific health-related function for a patient.
Direct to the patient (B2C) is one way these start, but often as they seek to grow further, they go en masse to groups of patients via employers or their insurances (B2B2C) that have a semi-captive audience and built-in distribution.
It’s an interesting organizational transition, as traditional enterprise sales flex a distinctly different muscle than building brand awareness on Instagram and recruiting influencers to hustle your health products. Examples include Calm, OneRecord, or even Fitbit.
Provider software
These organizations sell software solutions to brick and mortar / traditional care provider organizations.
This is the convergence of digital technologies with traditional non-digital health care delivery models. Companies in this subdivision make software intended to bring digital trends like telemedicine, artificial intelligence, machine learning, and wearables to conventional care providers.
This of course disrupts and takes market share from legacy health technology vendors. Examples include Solv, Murj, or Vital.
Provider organizations
Digital health companies that employ providers and are covered entities themselves fall into this category.
Natively digital and designed from genesis to be customer-friendly, they on paper have distinct advantages over legacy organizations bolting on digital health solutions.
Their revenue comes from the same places most traditional healthcare organizations find their revenue – patients, insurers, and employers.
Evolution and Growth
As companies evolve, they often come to operate across multiple parts of the Venn. They may, for example, release different products aimed at each segment. For example, DrFirst has a ton of digital health provider software solutions, but also a consumer digital health app, Huddle.
Similarly, Amwell sells a digital health provider software solution directly to hospitals but also has its own digital health provider organization, Amwell Medical Group.
Even if companies aren’t diversifying through different product lines, they often also start to operate in the margins of the Venn as their single product expands, like our aspiring young PM adding care managers and therefore shifting from pure-play consumer digital health to nascent digital health provider organization.
An EHR company (digital health provider software) may expose a patient portal (a digital health consumer app). A telehealth digital health provider organization may white-label their services and sell that package to traditional healthcare organizations (becoming to some extent a digital health provider software with services)
Your Team Must Have a Medical Professional
It’s important to have a medical professional on your team, such as an M.D., who can guide the design process and ensure that any products you create are accurate in terms of how they replicate human physiology.
To overcome barriers to entry is to form partnerships with existing players in the digital health space or creating strategic alliances with other startups.
Engaging Product
When it comes to innovation, you should always think about your product or service problem.
Keep in mind that digital health is a constantly evolving space, and this means new challenges pop up all the time. Be prepared to stay on top of trends so you can adjust accordingly as needed.
As stated earlier, there is a broad range of product categories within digital health. A useful way to understand where your product or service fits is to consider the level of clinical evidence and regulatory burden required.
Digital health spans the gamut from zero to full-fledged clinical trials on par with Class II medical devices and may require a prescription.
In all cases, because you are ultimately developing a digital system, you must find a way to engage your customers.
You engage them by simplifying their workflow, presenting insightful and useful information, or creating an engaging experience that users love.
Related: How To Build Amazing Digital Health Products That Patients Love
Clinical Validation
To build trust with consumers (patients or providers), it is important to have that validation or endorsement from thought leaders in the field. You can find such endorsements on digital health blogs and publications.
A pro-tip here: Many doctors see the advantages of digital health solutions but are not trained in the field. You’ll find health care professionals, both young and experienced, eager to participate in digital health any way they can.
Gather Insights From Data
Focus on your data strategy, as these will be your most potent competitive advantage before starting any project. Make sure there is a demand for your product or service and gauge how many patients you could potentially reach.
Start early on quantifying the impact your solution could bring. It’s OK to not have all the answers. It’s far more important to show that you’re asking good questions.
We’ve all just gone through a collective experiment, ie. a pandemic, that’s shown a light on everyone’s need to be adaptable and learn as we go.
How to Get Validation on a Budget
There are many apps for health, but developers may have to jump through hoops of validation before they can stand out from the crowd. Validation of any type is expensive, but there are a few tips and tricks that you can use to get validation on a budget and secure that initial investment.
Know Your Product or Service Value
The key to success for any entrepreneur is understanding what value your product or service brings and how you intend to create that. This will take some research, but it’s worth the effort as this knowledge will help guide your decisions in the future.
When considering the value proposition of a digital health innovation or program there are 3 key areas that drive value in healthcare – Patient experience, clinical outcomes, and economic outcomes.
Patient experience
This drives usage and keeps patients on track with their health goals. If patients have a great experience everyone is happy. Doctors benefit because patients keep coming back, patients stay on track healthwise and payers are happy because costs remain low.
Clinical outcome
If you can provide a superior clinical outcome, this can be a huge value driver in healthcare. This is especially true if you can do it more cheaply or while avoiding conventional sticking points like side-effects, complications or compliance.
Economic outcome
Ultimately everyone understands that healthcare costs are ever-increasing. Any solution that reduces the economic burden to patients or providers is welcome. The flip side to this coin is extracting more value from the current economics. For example, if you can save doctors time, provide more insight, or automate tasks but can do this without adding additional cost to the current model.
Develop a Communication Strategy
You need to get people excited about what you are doing, and this may require some thought when communicating with them, such as using images that tap into their emotions. Keeping your message concise but powerful is key for digital health startups.
People want to understand that you have a connection to your project. Tell a story that personally connects you to the innovation and you’ll start to see how that passion translates to support.
You Need to Be Able to Articulate Your Value Proposition
Don’t just say it; show it!
Show and tell is the best way to understand what you are about in digital health as products and services are virtual, but needs can still be understood visually.
Know your numbers, know your market, know your business. Potential investors or approvers want to be sure you are to be trusted in this field, and professionalism is the only way to prove that.
Practice your pitch, and be ready for any questions that may come your way. You should also already know how you want to improve your product or service in the next version.
Do Not Overestimate
In the end, you need to be able to afford your validation studies, and they should align with what is important for your business – such as getting a reimbursement plan or meeting clinical requirements.
The more money that goes into research upfront, the less risk of failure there will be in the future. Without validation, it may be difficult to identify the target market for your product.
You might need to test out different words that will resonate with them to build trust through marketing efforts.
The Digital Health Scorecard
Digital health solutions continue to grow in both number and capabilities. Despite these advances, the confidence of the various stakeholders — from patients and clinicians to payers, industry and regulators — in medicine remains quite low.
As a result, there is a need for objective, transparent, and standards-based evaluation of digital health products that can bring greater clarity to the digital health marketplace.
For digital health solutions to have greater impact, quality and value must be easier to distinguish.
A pragmatic framework that addresses the current limitations in evaluating digital health solutions is the Digital Health Scorecard.
The Digital Health Scorecard allows better discrimination of digital health products, but just as important pushes digital health companies to build impactful products that work for real patients, providers, and healthcare systems.
This aggregate score allows gross initial selection of digital solutions. Individual scores allow finer discrimination of particular products.
Such scores also allow digital health companies to identify where improvements are needed and inform stakeholders on what gaps will exist when the products are deployed.
The scores could become benchmarks and establish thresholds for particular types of digital solutions. These scores would also need to highlight and prioritize how well the product ultimately met the end-user requirements.
In the consumer financial industry the concept of a global score, such as the FICO score, represents a global score as an amalgamation of credit information to approximate borrower quality and lending risk
Components of Digital Health Scorecard
The four domains of a digital health scorecard with example considerations are detailed in this figure. Their relationship to an assessment of stakeholder requirements is also presented
Source: https://www.nature.com/articles/s41746-019-0111-3
A visual representation of the Digital Health Scorecard is shown below for CancerAid, an oncology treatment app.
The number in the wheel at top indicates overall performance with individual domain performance summarized in segmented portions of wheel. Performance by domain is detailed below the wheel with overall domain score indicated with subdomain performance included below.
Source: https://www.nature.com/articles/s41746-021-00476-7?mc_cid=60d04ac1d7&mc_eid=b4fc3f599f
Best Additional Funding Sources
If you have done validation upfront, now it’s easier for investors to see the value of your product or service. This means that you will have better access to additional funding sources and may be able to negotiate a bigger deal for yourself in terms of investment, valuation, and equity.
One of the best kept secrets to funding early-stage digital health ventures is the Small Business Innovation Research (SBIR) Grant program. Secure anywhere from $256k to several million dollars in non-dilutive funding. I’ve personally secured over $2.5M in funding for my companies. Learn exactly how I did this by following my guide to winning SBIR funding.
If you’re looking for venture capital investment you’ll want investors focused on early-stage digital health investing. See my post of the Best Digital Health Investors to see what typical investments look like and even a point of contact when you’re ready.
Here are some other digital healthcare funding sources you should look into to raise funds for your digital health company.
Marketing your Digital Health Company
Once you’re up and running, the fun part begins! It’s now time to go out there and find as many patients as possible. Your product or service should ideally make their lives better, so it’s in everybody’s best interest if your company’s name becomes heard.
Use the Proper Language
When dealing with this type of industry, you should speak a certain way to convey professionalism and integrity. Some changes are subtle, such as not referring to people as clients, even though they will be bringing in the money. Instead, address them as patients and make sure they know you always have their best interest in mind.
Also, be wary of any health claims you make. People will look up to your business as an authoritative figure, so they will believe what you say. Make sure your sources are linked to reputable sources and fact-check everything you post online.
Mind the Law
Depending on the type of business you’ll be operating, and if your services are local, nationwide, or worldwide, there may be some legal hurdles to overcome. It’s best to keep a specialized lawyer on your team to help you navigate through the treacherous abyss of the law.
Crowdfunding as a Validation Tool
Especially when you’re just starting out, crowdfunding can be an excellent way to validate your company in the eyes of others. The beauty of this method is that everyone wins because even if you don’t reach your monetary goal, your online presence will have increased.
Social Media
When marketing a digital health company, you’ll want to make the most out of social media.
Use a content marketing strategy with digital healthcare to get patients and rely on social media as a free way to track the success of your efforts. These platforms will allow you to amass large numbers of followers and provide you with valuable data that you can use for future endeavors, all at no extra cost. Just ensure that anything you are posting provides value to your followers.
SEO
Digital health provides personalization and patient-centered solutions in a way that conventional healthcare cannot.
That means that patients engage with digital health solutions differently and expect a much higher level of personalization.
Think about shopping at the old mall vs shopping on amazon or your favorite online store. You expect a certain level of digital experience.
Just like the top e-commerce businesses – you’ll want to rank high in searches when people are looking for services.
Preferably, you want your digital health company to be on the first page of any search engine results. This way, your potential clients will see what services you offer without having to dig deeper into search queries.
Make sure your website is optimized so that it’s easier for potential customers to find what they’re looking for. If you do this right, organic traffic, location traffic, and social media traffic will increase organically.
You can also post informative blog posts to your website regularly to trigger google’s algorithm for keywords.
Paid Advertising
Make sure you check the list of top sites for digital healthcare advertisement before committing any money.
Pay per click is the most common paid advertising method for digital health, and it’s recommended to start small. It’s always a good idea to see how things go before spending more money on ads that you aren’t sure will work.
It’s important to keep paid advertising as a tool in your toolbox. But just like anything else, there is a right time to use the tool. Use paid advertising when you need to scale, are launching a campaign, or want to get in front of many people quickly.
Just be aware that healthcare advertising is its own special category. You’ll want to focus on organic traffic strategies first. With so much growth in digital health, you can probably hold off on paying for traffic in the early stages.
As long as you do your research (from what we learned above), you’ll be able to avoid most ads gone bad and find a successful advertising campaign that will work for your business.
Bottom Line
The digital health industry is one of the fastest-growing industries in today’s job market. If you’re looking for a lucrative opportunity while positively impacting your community with innovative healthcare products and services. In that case, digital health may be right up your alley.
Through this blog post, we have provided some guidance on how to get started and examples of careers available in the field. To learn more about making a difference now, access additional funding sources, find out which companies might interest you most – Medtech Founder provides in-depth information that helps you succeed in today’s digital health care.
Join the discussion 3 Comments