At a time when the healthcare industry is battling point solution fatigue, it begs the question: is there still a place for all these solutions?
According to one industry executive —Doba Parushev, the head of Healthworx, the innovation arm of the payer CareFirst BlueCross BlueShield — it depends on the solution. He noted that point solution uptake largely came from employers due to dissatisfaction with the performance of health plans.
“[They said] ‘Let us build a portfolio of our own solutions. Because we think we can do better,’” he said in a recent interview. “To be fair, there’s nothing wrong with that, and maybe they’ll be able to assemble some fantastic point solutions. But they’re running into the same [issue] we are, which is managing point solutions is expensive and difficult and requires a long-term commitment. So a bit of the hangover that we’re seeing is actually coming from employer groups saying, ‘Alright, we have 20 contracts, we’re working with two payers and they have their own 20 contracts. How the heck do we manage this?’”
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He noted that there are some areas where point solutions make a lot of sense, such as when they’re focused on a condition without a lot of comorbidities. An example of this is musculoskeletal (MSK) solutions. Someone battling MSK conditions may also experience some mental health challenges, but “by and large, the number of comorbidities is not as acute,” Parushev argued.
Metabolic conditions are a different story.
“Between CKD, COPD, diabetes, chronic heart failure, etc, we’re seeing much more confluence of comorbidities, and therefore having a purely diabetes solution or a pure play cardiac solution feels off,” Parushev said. “Cardiac issues tend to be the highest comorbidity on pretty much any chronic condition output. … I think this is where some of the point solutions are going to see the most pressure. Maybe it makes sense to have an MSK solution, but having three solutions, one for diabetes and one for cardiac health and one for nutrition? That’s likely going to see some degree of consolidation.”
Parushev also predicted that in 2025, there will be fewer companies. There were a large number of companies funded in 2021 and 2022, but many are now facing challenges due to the current economic climate.
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“Reality is we’ll end up with fewer companies,” he said. “Whether that’s going to be through mergers or consolidation or companies going out of business, that story right now is currently being written. That’s always been a dynamic of how valuable an underlying technology is [and] how valuable the underlying customer book is.”
This idea of point solution fatigue has been brewing for a while. In a recent edition of Second Opinion, author Christina Farr and Big Health co-founder Peter Hames argued that point solutions should largely steer away from employers due to excessive competition and the fact that many do not address broad enough needs. Others, including Shawn Gremminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, believe there’s still a place for point solutions in the employer market. However, employers now have higher standards for the solutions they choose to work with.
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