Where Will Digital Health Gain the Most Traction?

Where We Started:

In the early days of mHealth (2010-2011) I was imploring the international NGO I worked for to experiment with sending text message reminders to women who needed to return for Depo-Provera shots. There were a lot of questions. Who pays for the texts? What if there is only one cell phone per household? (This was a real concern a decade ago.) What if there is no cell service where these women live? We were grappling with both technology barriers, social norms, and funding for something so new. 

Fast forward to 2021 and digital health has its own venture capital firms, news reporters, graduate programs, scientific journals, and conferences. It is interwoven with many traditional healthcare verticals as well, like pharma, insurance companies, and hospitals. There is also the direct to consumer world of digital health. What I am wondering is where digital health will gain the most traction. Here are a few options:

The Case for Consumer Digital Health:

There is a strong argument for the Direct To Consumer (D2C) market. The “worried well” certainly have supported the growth of companies like Fitbit, which has 30 million users (who log in at least once a week.) But, from a revenue standpoint, Fitbit peaked in 2015 at $1.8 billion, yet was acquired by Google early this year for a cool $2.1 billion. That’s not too shabby for devices that run about $100 a pop. 

The New York Times ran an article last week asking “Is FemTech the Next Big Thing in Healthcare?” (The answer is YES.) FemTech is largely focused on the consumer market. According to Pitchbook, in 2019 FemTech generated $820.6 million in global revenue and received $592 million in venture capital investment. That’s nothing to sneeze at for a relatively new sector of the digital health market.  

Peloton is lumped into digital health, is a much more expensive investment than a Fitbit, (though I’d argue it might fall more into fitness…) and while the company was once the source of ridicule for their marketing tactics, the pandemic launched them to the main stage as gyms closed. They are projecting $3.5 billion in revenue in 2021.

The Dual Market Approach:

I’ve worked with a few companies that are going hard into dual markets -- consumers and someone else that would pay for access to the product as an insurance or company benefit. 

There is a compelling reason to consider the B2B2C option if you are a digital health company. The sales deals are bigger for one, and someone else is distributing your app or wearable or service, reducing the need to rely on intensive social media (and other) marketing efforts and spend. However, I wonder if consumers will be as enthusiastic about an app their insurance company provided to them versus something that they sought out to solve a personal health problem or need. 

But what about Digital Health(care)?

Now, I’ve left out an important piece of the digital health puzzle: Digital Health Data that can inform healthcare decisions. In my days at Duke, I had a LOT of conversations about how we can better care for patients with remote monitoring. I co-wrote an article on selecting the best mobile health technologies for EHR integration after numerous inquires from physicians on how to do this. With 60% of American adults diagnosed with at least one chronic medical condition, technology that helps patients care for themselves, reduces barriers to connection with a healthcare provider, educates them about their condition, and provides insights into how their are managing their diseases at home (as well as alerts when it isn’t going well) will arguably improve our population’s health the most significantly. If Duke is any example, physicians are clamoring for this flavor of digital health. 

In order for digital healthcare to get traction, we are back to the question of who pays for it. There are some incentives with value-based care (essentially a flat fee for delivery of a service, like a birth, or a knee replacement) for hospitals to pick up the bill, but in the case of chronic diseases like diabetes, a bluetooth enabled glucometer seems primed for an insurance provider to cover if it can be proven that its use by a person with diabetes reduces complications, surgeries, and improved health and wellbeing and fewer resources of the healthcare system. For the companies that create connected digital health devices there is sure to be a windfall if they can establish themselves best in class. 

What do you think?

So these are my ponderings. For those of you working in the various digital health communities, which do you think will gain the most traction? Traction can be defined either as number of users, distribution pathways, or revenue. I’m still thinking it through and am interested to see what the future will hold. As always, I am optimistic about the potential of digital health.