By Dave Muoio, Mobihealth News | October 3, 2019

Many healthcare and digital health stakeholders don’t believe that health tech companies fully understand the complexities of their market, according to a new survey published this week from law firm Ropes & Gray and media company Crain’s New York Business.

These data from nearly 300 respondents also suggest apprehensions surrounding healthcare partnerships with digital health companies, with many citing lack of reimbursement, data and demonstrated value.

“It’s kind of a chicken-and-egg situation, and you don’t have a lot of runway to demonstrate that your product works before you run out of money,” Brett Friedman, a partner in Ropes & Gray’s health care practice and co-chair of the firm’s digital health practice, said in the report. “It’s a very small window to collect and analyze data, refine your technology, generate shared savings, and prove outcomes before you go belly up. That’s an enormous task when historically the health care sector moves very slowly.”


Three in five respondents highlighted the industry’s longstanding business and reimbursement practices as a clear road block for digital health products going to market.

As a result of this complexity, 47% of respondents were of the mindset that “most” health tech companies don’t have a complete understanding of the market they’re attempting to break into. Additionally, 27% said that they believed most digital health products to not be useful to patients, physicians and caregivers, due either to a lack of cost savings and quality improvements or because the products simply don’t address a real underlying issue.

Attitudes toward partnerships with these companies were mixed as well. Twenty-nine percent of respondents said they have entered into a digital health partnership over the past year while 26% said they were likely or somewhat likely to do the same. However, roughly 45% said that they were not considering an affiliation due to undemonstrated value (18%), unlikely reimbursement (13%) or data exposure and cybersecurity (13%).

On that last point, 70% of respondents said they believed that a digital health partner wouldn’t secure or encrypt health data before sharing, and 79% said that they were worried (34%) or somewhat concerned (45%) that the digital health partner would experience an accidental data breach.


The survey collected responses from 284 healthcare and health tech stakeholders during July and August of this year. Among these respondents, 46% said they were customers of digital health companies, 14% said they worked at a digital health tech vendor and 6% were digital health investors. Respondents most often hailed from a provider (27%) or a pharma, life sciences or biotech company (14%), with more than half of all participants identified themselves as some form of senior management.


New deals between digital health companies and health industry juggernauts are increasingly springing up and bearing fruit, but by and large these types of partnerships are generally still uncharted territory. Both sides of the aisle are still putting together their roadmaps of best practices, with those on the digital health side well aware of what such deals will do for the young sector.


“We’ve created a cult following around digital health. It’s really cool, but is it what we really need?” an anonymous healthcare investment executive was quoted in the report. “Should we be paying for it? Adopting it? Or are there less technical ways of solving our challenges?”

Original Article