Ignoring these fundamentals could make it hard to scale a digital health startup

Digital health is a popular business these days, but it’s also a tricky one. In theory, remote monitoring and engagement products have the potential to drive long-term cost savings, but robust data is lacking and consumer adoption so far has been relatively low. In a guest article for Re/code, Dr. Beth Seidenberg, former chief medical […]

Digital health is a popular business these days, but it’s also a tricky one.

In theory, remote monitoring and engagement products have the potential to drive long-term cost savings, but robust data is lacking and consumer adoption so far has been relatively low.

In a guest article for Re/code, Dr. Beth Seidenberg, former chief medical officer at Amgen and a general partner at KPCB, pointed out six fundamental truths that entrepreneurs should embrace to build and scale a digital health startup.

A few of them we hear a lot: A solution should pose a financial benefit to the system and provide some kind of benefit for consumers or patients, and the startup team should come from a variety of backgrounds.

But she made a few other good points:

Open API is a must: A lot of healthcare data is still stuck in silos, and the next generation of products will require interfaces that can open up data. However, Seidenberg notes that the lack of industry-wide language and communication standards, and some parties’ unwillingness to share data, could get in the way.

Building a revenue model should come first: At first, Practice Fusion struggled to sell electronic medical record software starting at $300 a month to physicians’ offices. When the company began to offer its platform to doctors for free, thousands signed up, and it was able to monetize through data and targeted advertisements. “Businesses often fall back to per-member/per-month pricing — but consider creative alternatives,” she urges.

High-tech isn’t the opposite of high-touch: The human element is still an important part of healthcare. With digital health products, the challenge is to make them as social and integrated into people’s lives as Twitter and Facebook. A number of companies doing this are leveraging persuasive design and gaming elements to keep users coming back, she notes.

Read the whole post here.