Can health systems help push digital health development forward?

The highly competitive digital healthcare market is teeming with companies looking to achieve a singular goal: create solutions with staying power. In recent years, companies have launched and folded in short order, showing that developing effective digital health tools is a formidable task. As companies struggle to cater to complex healthcare needs, well-resourced healthcare provider organizations have taken the matter into their own hands — entering the market as investors, developers, and development partners.

Mass General Brigham has its Center for Innovation in Digital HealthCare, Icahn School of Medicine at Mount Sinai has its Center for Digital Health, and Providence its Digital Innovation Group. Mayo Clinic offers a suite of products to support the development and deployment of digital health solutions through the Mayo Clinic Platform, including the recently launched Solutions Studio.

“The primary goal [of the Solutions Studio] is to accelerate the speed of getting innovation into the hands of the healthcare providers and to bring as many of these innovations as possible through the program,” said Steve Bethke, vice president of Solutions Developer Market, Mayo Clinic Platform, in an email. 

These efforts point to the complexity and trenchant nature of the healthcare industry’s pain points. While healthcare providers may be able to bring their unique perspectives to digital health development, experts who spoke with mHealthIntelligence say there are numerous hurdles to success in this area.

WHY HEALTH SYSTEMS WANT IN ON DIGITAL HEALTH DEVELOPMENT

Healthcare finances were left in shambles following multiple waves of the COVID-19 pandemic. Though Kaufman Hall data shows that hospital operating margins are improving, the recovery has been gradual.

According to Thom Bales, PwC's health services sector leader, this has resulted in immense cost and growth pressure, prompting healthcare provider organizations to throw their proverbial hat in the digital healthcare ring.

“It could be because these health systems are increasingly going down the path of addressing fundamental costs, infrastructure costs, facilities costs, and seeing [whether] digital health [can] provide a vehicle for a different kind of a cost structure,” he said in a phone interview with mHealthIntelligence.

Creating digital health tools can provide revenue for the organization by itself — through a subscription model, for example — and support efforts to maintain patient volume and create closer patient relationships, he added. Additionally, becoming a digital health player has become a vital strategy to remain competitive in a market with retailers and legacy technology entrants like Walgreens, Amazon, and Google.

Amid this rising competition, Mayo Clinic aims to reduce friction between digital solution developers and healthcare providers. To that end, the health system has set up the Solutions Studio as a platform business versus a pipeline business model. The platform model involves creating a virtual platform or physical space where interactions, including sales and service deployments, can occur. In pipeline models, the organization contracts with sellers and is responsible for inventory management and other operating expenses.

Through the Solutions Studio program, technology developers can partner with the health system to gain access to de-identified longitudinal data, model validation expertise, strategies to streamline model integration into clinical workflows, and advisory network and logistical services.

“The program provides credibility and trust for qualified innovations with the Mayo Clinic Platform brand and streamlines the deployment of these innovations by reducing technical and contracting burden,” Bethke said. “We remove the need for large budgets for technology infrastructure, technology teams, and contracting complexities.”

The collaboration also allows Mayo Clinic to develop “positive business relationship[s]” with solution developers.

Moving into the digital development sphere can prove fruitful for health systems. However, they must be prepared to address a myriad of challenges.

ADVANTAGES AND DISADVANTAGES HEALTH SYSTEMS MAY FACE

One of the most significant advantages that health systems have with regard to digital health development is that they have the best vantage point to identify pain points in healthcare operations. Becoming involved in developing solutions to mitigate those pain points leads to “inside-out innovation,” said Larry Cohen, CEO of Health2047, an innovation firm backed by the American Medical Association.

“We think [this is] one of the most productive ways to improve healthcare, which is to have healthcare providers or physicians or organizations who are instantly involved in the issues that face them, identify the problems, [and] work out solutions,” he explained in a phone interview with mHealthIntelligence. “So, it absolutely is starting from the right place. From our perspective, it's much better than having technology and looking for a problem that it solves.”

Mayo Clinic’s Bethke echoed this, adding, “As a healthcare provider that understands the needs of the patients and those who care for the patient, we bring experience and proven expertise in ensuring that developed digital health tech is useful and safe.”

Mayo Clinic is able to leverage data from the millions of patients it sees worldwide to gain a comprehensive view of patient and provider needs. This access to data may be the most significant edge health systems have over technology-first digital health companies.

“They have clinical expertise, clinical data, personal information that can drive a different kind of experience and engagement with their patients,” PwC’s Bales said.

Further, Bales noted that some large health systems today, despite the pandemic-era downturn, have the revenues to make their digital health visions a reality.

“We're talking about health systems that are anywhere from $1 billion to $400 billion in revenue these days, which in comparison to many of the digital startups have far more resources, far more depth of expertise in a lot of different areas than where these digital startups are,” he said.

However, this points to one way healthcare provider-led digital health development could be a net negative for the industry. Health2047’s Cohen noted that the industry’s heavyweights are entering the digital health development arena—not the financially strained hospitals. This could ultimately widen the already considerable gulf between technology adoption in rural healthcare facilities and their well-resourced counterparts.

Additionally, solutions developed by or in partnership with health systems run the risk of being too specific.

“The fact that the solution is tailored to a given organization's particular mode of behavior could be a limitation because the question is, if you derive this solution that works best at Mass General Hospital, how applicable is that for other organizations, and is it really going to be that easy for other people to adopt?” Cohen said.

This lack of generalizability is not the only hindrance to creating tools that multiple healthcare organizations can use. The rules and regulations governing the in-house use of home-grown digital health solutions and those provided to other organizations are different, Cohen noted. The solutions will also require frequent upgrades and modifications as healthcare needs evolve, resulting in burdens on the back end.

On the other hand, Bales pointed out that digital health startups have the agility that large, integrated health systems do not. While they carry risk, their risk profiles differ from those of brick-and-mortar healthcare provider organizations, allowing them to adopt new tools and new types of engagement at lower costs.

Agility is valuable in digital healthcare, where good ideas do not always translate to clinical outcomes. The Peterson Health Technology Institute (PHTI) recently released a report showing that digital management tools targeting type 2 diabetes that use remote patient monitoring (RPM) and behavior and lifestyle modification approaches do not provide meaningful clinical benefits. The report examined eight digital tools from several companies, including DarioHealth, Glooko, Omada Health, and Teladoc Health.

Thus, health systems that plan to develop digital health solutions must also ensure they can demonstrate solid clinical evidence of efficacy.

“How do you demonstrate convincingly that your intervention really has clinical benefit? And that is the bottom line,” Cohen said. “If you think about the innovation that has really worked in healthcare, robotic surgery comes to mind. It probably took 20 years for robotic surgery to gain the momentum that it has now. But the reason that it's gained that momentum and it's becoming a force is because of the efficacy.”

Health systems looking to expand digital health development efforts must also carefully consider their approach. Bales emphasized the difference between digitizing one part of the patient care journey and overhauling the whole experience.

For instance, digitizing health insurance cards made the healthcare experience more accessible for patients and providers, but it didn’t change pre-appointment protocols.

“It made one element of engagement simpler, but it wasn't a rethink of what that whole experience could have been,” he said. “And I think that remains the opportunity.”

In light of the advantages and challenges of digital health development, health systems may do well to follow the Mayo Clinic's example and focus on driving partnerships with technology-first companies.

While health systems have troves of patient data and an on-the-ground view of healthcare delivery challenges, digital health companies have the technology know-how and agility to develop effective tools.  

“You've got two contributors, each of which has a crucial sort of bucket of information... So, I think that the future of this is probably better interaction and better collaboration between the two,” Cohen said.

Regardless of how they choose to be involved, Bales believes health systems with the money and resources to establish a foothold in the digital healthcare arena should do so.

“I don't think that they have the right to excuse themselves from this space,” he said. “They have to be thinking about how they drive digital across their whole business model. They have to be thinking about how they reinvent themselves.”