The Digital Health Institute for Transformation (DHIT) is excited to announce that we have relaunched the DHIT Frequency, a digital web series bringing you the latest and greatest insights into current and future trends in digital transformation across the healthcare landscape. For the first edition of our relaunch, our CEO and Co-Founder, Michael Levy, led a roundtable discussion with DHIT Board member and US commercial expert in digital health, Rob LaHayne. Rob has extensive experience implementing digital health solutions for employers and a deep knowledge of scaling businesses, employee engagement, benefits, and HR technology, which is why he was our chosen subject matter expert to help lead the discussion around current risks and successful strategies to enter the US digital health market.
Check out some of the key insights from the discussion below.
1. Show me the money!
While COVID-19 acted as a digital health catalyst, accelerating adoption and awareness by a decade, prior to the pandemic, there was a rush to invest in digital health solutions, notably during the 2016/2017 VC boom. At that time, the sector held novelty and intrigue for consumers, with the market ready to test across micro and macro problem sets. With over 160 million people relying on employer-based health insurance, a fertile ground emerged for testing innovative solutions in the employer space. However, the landscape has subsequently evolved over the last few years, and the focus has shifted to pressing customer demand for tangible ROI and clinical validation for implemented programs. Digital health solutions now face the task of substantiating earlier narratives with hard data, translating promises into quantifiable results to demonstrate its much-heralded impact on the healthcare paradigm.
2. Consolidation and ROI shape venture capital investments
In response to the evolving landscape of venture capital investment in digital health solutions, a notable trend is the consolidation of companies, with both complementary and competitive offerings, seeking to enhance the consumer experience. It has led to acquisitions of focused digital health solutions in areas like chronic illness and disease management by virtual primary care providers, in a move to augment their service portfolio and deliver increased patient value. Amidst current economic setbacks, the digital health paradigm is witnessing significant saturation across care verticals, prompting a cautious investment approach. Investors are now emphasizing the creation of robust business models with profitability and positive EBITDA as key objectives. This shift underscores the dual emphasis on building customer value and sustainable business growth, reflecting a refined perspective in shaping investment portfolios with clear long-term plans and exit strategies.
3. Differentiating against competitors in the US market
In the complex landscape of the US healthcare market, marked by fragmentation and intense competition across a multitude of segments, a comprehensive understanding of key players and distribution channels is paramount for any new entrant. The mere value of a consumer-oriented product does not guarantee a profitable business or capturing market share. Players looking to compete will analyze and segment the market, delve into viable customer bases like payers, providers, employers, and associations, and discern the value proposition within each submarket to better tailor their solution to the specific market’s needs. Identifying decision-makers, payers, installers, and beneficiaries within these categories is crucial. The process entails dissecting the market through categorization and conducting targeted penetration tests to pinpoint the most receptive audience. And amid the tempting array of opportunities, maintaining focus is challenging. If you can avoid chasing after “shiny objects,” you can ground your strategy and allow for a plan tailored to attain sustainable success.
4. Find a thought leader, not a yes man
Navigating the complex US healthcare market necessitates a strategic partner, whether an experienced employee, consulting firm, or agency, to chart a path to success by defining objectives, formulating strategies, and executing plans. This journey involves leveraging contacts for pilot initiatives, assessing program effectiveness and efficacy with clinical resources, and accessing viable opportunities through networks. Moreover, the quest for partners extends to those unafraid to offer a candid assessment of your solution stack. Evading the allure of those who merely echo affirmations is crucial. Many innovative solutions stumble due to a lack of guidance on necessary pivots or adaptations, hindering their quest for a suitable product-market fit.
5. Use what’s already there
For emerging players in the market, it’s crucial to perceive existing digital health solutions not merely as standalone entities, or even competitors, but rather as potential platform partners and powerful distribution channels. This strategic shift in perspective opens avenues for collaboration, innovation, and mutually beneficial growth. At the same time, established solutions that have gained traction in the market must recognize the value of embracing novel offerings as complementary additions to their repertoire. By weaving together the strengths of both emerging and established solutions, customer needs can be more adequately addressed and collective success becomes the ultimate objective.
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The Digital Health Institute for Transformation (DHIT) is a non-profit education and research institute supporting communities through the process of digital health transformation. We collaborate with leading academic institutions, associations, and industry to cultivate talent and ecosystems with our immersive learning platform, harnessing real-world experiences that drive the adoption of next-generation skills, emerging technologies, and models of health. For further information visit: https://www.dhitglobal.org