Health IT, MedCity Influencers

Where will the dominant digital health platform come from?

I read an interesting Wall Street Journal article recently that discussed the war between tech […]

I read an interesting Wall Street Journal article recently that discussed the war between tech companies to control future consumer distribution platforms. The article explains that the cash-flush giants “…each want to own the digital platform where people communicate, shop and seek entertainment.” This got me thinking about platforms in healthcare.

Right now, it’s fair to say that there are three major healthcare platforms. Insurance companies such as Aetna, WellPoint, United Healthcare and Humana have substantial members. However, mentioned in the article is the continual need for innovation. Tech behemoths are“…aware of all the big companies that died because they rested on their laurels.” Payers have the most to lose as they have the largest identifiable platform, albeit a fragmented one. They’re trying to innovate (see Aetna’s purchase of iTriage and United Healthcare purchase of Audax Health) but the innovation isn’t happening quick enough, and in reality most M&A transactions are supplemental product lines. Providers’ platforms are integrated delivery networks; both care deliverer and payer, (Kaiser Permanente, Geisinger Health System and Intermountain Healthcare) as well as the emerging accountable care organizations or ACOs. And then there are the self-insured employers where the major focus with this platform is reducing cost or health expense on the balance sheet.

All these platforms are limited to their own membership and offering. There isn’t one platform with 200M patients for health “communication, shop and seek services” like a Facebook, Twitter, Pinterest or Whatsapp. Yes, the largest payers like United Health (70M), WellPoint (33M) and Aetna (18M) have significant numbers to their platform, but given the obscene number of offerings and products, it’s hardly a uniform platform to target. Consumer-facing companies have tried, such as HealthTap, Teladoc, Doctor on Demand (and all other telemedicine-like plays), Microsoft HealthVault and Google Health.

Which brings me to personal health records (PHRs). The unspoken name. Those that have failed shall never be mentioned. Everything I’ve seen recently is trending towards a more consumer-focused healthcare system — the consumerization of healthcare. The thesis: with patients (read consumers) now buying insurance on exchanges, consumers need to be more knowledgeable and engaging in current and subsequent health decisions, given that it’s a significant chunk/expense out of their pay check. A doctor and good friend of mine wants to replace the word “reimbursement” with “payment”: “You’re paying for a service,” he says. “None of this reimbursement crap.”

Added to this increased emphasis on consumer decision is the fact that mobile is now a large piece of our daily lives. Most of how we interact with the healthcare system (doctors, hospitals, retail clinics, etc.) is outside the four walls of our home, which means that the PHRs of the past which were once useless desktop-based systems are now relevant mobile technologies. I’ve seen at least half a dozen companies recently attempting to generate a new age PHR, mixing an Evernote with a Box with a Mint.com to produce a smooth, intuitive, easy-to-use product. An obvious question to ask is: is there interoperability with existing HIT systems, mainly EMRs? Does interoperability matter if you have 100M consumers storing their medical information on your PHR system? What can you do with such a large number of healthcare-oriented people on a unified platform? I don’t know the answer, but I’m intrigued enough to find out. Blue Button comes closest to this, but being run and implemented by the government, it’s not a free market initiative per se.

Outside of the PHR space, there are other platforms in the mix. One Medical and MinuteClinic come to mind in the hotly contested primary care market. Doximity is trying to own the physician market. In the past, Epocrates (now athenahealth), WebMD, and UptoDate have tried capturing the physician platform for decision support. But these seem more like legacy businesses rather than new age, and are platforms that haven’t been mined to the fullest extent. Nike+, FitBit, Jawbone, MapMyFitness and RunKeeper are the most direct to consumer, either in hardware, software or both, and are trying to monopolize the “quantified self” platform. And it’s interesting to see Google and Apple (rumored) specifically focused in this space. When you think about it, this is the closest any healthcare businesses come to the tech world. In other words, these businesses that deal in ‘health data’ are as far away from any healthcare company as can be.

Healthcare folks often poo poo the notion of changing the healthcare industry by systematizing and technologizing it. They say that healthcare is a different industry that is too complex with too many stakeholders. “You can’t just add technology, mix and end up with a perfectly efficient system.” I somewhat agree. But thinking strategically about healthcare is not a bad thing. The leaders of the technology world think clearly about the frontiers of communication, operational efficiency, customer acquisition and satisfaction.

Here at Lux, we’re currently incubating a company in the senior care market that wants to own sub-segments of the 65+ platform. And we’ve recently seeded a company that wants to own doctor house call visits by building a scalable, on-demand platform. From now on, I’ll certainly have platforms at the back of my mind as I look to invest in digital health companies.


Adam Goulburn, PhD

Adam Goulburn is a senior associate with Lux Capital, based in the firm's New York headquarters. Adam concentrates on investments within the healthcare and life science sectors, including healthcare IT, services, mobile health and therapeutics. Adam has worked extensively with a number of Lux portfolio companies including Kyruus, Tech Care, Kala Pharmaceuticals and Genocea Biosciences. He is also a mentor for healthcare incubators Blueprint Health, Healthbox, TigerLabs and Aging2.0.

This post appears through the MedCity Influencers program. Anyone can publish their perspective on business and innovation in healthcare on MedCity News through MedCity Influencers. Click here to find out how.

Shares0
Shares0