Unfortunately for us, MobiHealthNews doesn’t have a crystal ball (it would be darn useful for getting scoops). But we do have more than a decade’s worth of experience tracking the emergence of this space and we spend a lot of our time talking to smart people with industry experience and opinions of their own.
As we enter into a new decade in 2020, your MobiHealthNews staff has put our heads together to cap off our “Looking Ahead” theme month by offering some perspectives on upcoming trends and, yes, even some predictions, for 2020 and beyond.
1. Big tech isn’t going away — and its healthcare moves will only get bolder
This has become a perennial prediction, but it’s still an important one. Few people believe at this point that Amazon’s Amazon Care program will stay an employee experiment for long. We’re convinced it’s headed for a wider rollout that will see Amazon offering, or at least facilitating, telemedicine services, disrupting the supply chain for care the same way it has with so many other things. Exactly what form that will take remains to be seen, but healthcare is a market ripe for disruption and Amazon is well-positioned to get more involved in disrupting it, as indeed they already have with mail-order prescription delivery. We’ve heard surprisingly little out of Haven, Amazon’s joint venture with JP Morgan Chase and Berkshire Hathaway, but we suspect Haven and Amazon Care are pieces of the same puzzle.
Apple and Google may not be taking as direct a role, but we expect to see them slowly expanding their role as well. Apple continues to invest in a whole ecosystem of hardware and software around both health monitoring and mobile-enabled health research. Recent signals by Google that it may want to compete — including a new 510(k) clearance for the Verily Study Watch and the company’s acquisition of Fitbit — should only heat up Apple’s efforts.
As for Google, we had the opportunity to hear Google Health VP David Feinberg speak last week at the Startup Health Festival. After sharing several interesting AI projects the company is involved in around mammography and eye health, this is how he described the company’s vision:
“Fundamentally in 10 years, I feel like we'll be successful if we have helped the health care system in communities redesign health care. So it's actually centered around patients and families. I think we fundamentally have built the wrong system. And I think these tools can help us achieve that. How that looks, I'm not sure. But it will be more affordable. It will be much easier. The quality will be better. There'll be joy in being a caregiver. And health will be something that you don't have to worry about, because when bad stuff happens or if we can predict bad stuff, we can get you in the right direction.”
2. Data privacy will remain in the spotlight, and HIPAA won’t cut it
The limits of HIPAA are a double-edged sword for big tech, something Google learned the hard way this year when news broke of its Ascensia partnership in a less-than-flattering way. The company was operating within the letter of the decades-old law, but that was a cold comfort to patients alarmed that (A) Google had access to their data and (B) they weren’t notified.
At events like the HIMSS Security Forum in December, a growing chorus of voices saying that we need a new law — some kind of fusion of HIPAA and GDPR that protects patient data even if it didn’t originate in the health system (for instance, if it came from a direct-to-consumer wearable).
These concerns aren’t new, but that chorus is getting louder. We need something that gives patients more transparency into the hundreds of business associates agreements that permit hospital partners to use that data in increasingly novel and varied ways. We need a law that acknowledges the limits of de-identification.
“Everyone’s concerned about what’s happening to their data,” Salesforce CMO Ash Zenooz told MobiHealthNews in an interview on the sidelines of JP Morgan. “And this is a global thing. GDPR tried to address that. But our healthcare data for our interactions with our providers and insurance companies lives in a place, but there’s a ton of other data about us that’s living outside that’s not protected by HIPAA. … Most of our data is sitting outside and that’s the data that a good part of that is going to predict what’s happening to a person’s health, and I think people are appropriately concerned about where that’s being utilized.”
Of course, HIPAA has always existed in tension between its role as a privacy protector and its role as an access enabler and this dynamic isn’t going away. Look no further than recent news about Epic’s pushback against HHS info blocking rules to see this dynamic at play.
So it isn’t going to be easy to create legislation that addresses privacy concerns while still avoiding the risks of killing innovation or scaring hospitals out of using data to improve patients’ lives. Probably the incremental rule changes HHS puts out won’t get us over the finish line any time soon. But some kind of major privacy law reform, spurred by the realities of digital health and the consumerization of healthcare, is coming.
3. Last decade’s cutting-edge tech is moving into the boring, but productive, part of the hype cycle
Most of you are probably familiar with the Gartner hype cycle, a useful conceptual framework that describes how new technologies move from a “peak of inflated expectations,” to a “trough of disillusionment,” to the “slope of enlightenment” and, finally, the “plateau of productivity.” Several times speaking with stakeholders at JP Morgan, it was striking how many technologies seem to be in the last two of those stages.
Virtual reality and augmented reality is a strong example — the wow factor of VR is finally starting to fade. Neither of the two startups we spoke with at the show who use this technology described themselves as VR startups. Instead, they casually mentioned the way their solution deployed VR the same way they might drop in a reference to the cloud or a mobile app. The technology itself is no longer eliciting excitement — or trepidation — about a product. And there are signs of blockchain, until recently the ultimate tech hype punchline, moving in this same direction.
Other technologies, like AI or digital therapeutics, have hype cycle that seem destined to be longer and are still offering some unrealistic promises and hype-driven pitches. In fact, it’s hard to imagine a better example of the trough of disillusionment where, as Gartner says, “interest wanes as experiments and implementations fail to deliver,” than the recent spat of public digital therapeutic partnership failures. Or, for that matter, some very public AI algorithm foibles.
Still, in both these areas there are more and more examples of the down-to-earth workhorse companies that mark the beginnings of the slope of enlightenment.
4. More digital health-specific investor firms and funds will emerge
We predict the investor pool will mature and continue to specialize. Due to the relative new-ness of the digital health industry, investors have come from a variety of backgrounds including tech, biopharma and general health. However, industry insiders have continued to stress the importance of understanding the health ecosystem.
“It is vital in digital health to have people not just on the venture side, but also on the boards and management of digital health companies, that come from different genders, economic backgrounds, ages and different perspectives,” Luba Greenwood, lecturer at Harvard and former Verily business development manager, told MobiHealthNews in April. “The best return on your investment is going to be in companies that are going to do that by working with payers, provider groups, pharmaceutical companies and diagnostic companies. Because you have such different types of companies, you need different perspectives as an investor. You need to understand how the consumer world works.”
As the industry ages so will the experience level of investors. We also predict to see an increasing number of digital health-focused firms, like 7Wire Ventures, Rock Health and StartUp Health, and targeted investment funds such as Flare Capital’s sophomore health tech fund.
“Most investors don’t like strategy drift. So, the fund size is slightly larger but the strategy is unchanged — my guess is a company in the last fund could easily be in the new fund, and vice versa,” Michael Greeley, general partner at Flare Capital Partners, told MobiHealthNews about the fund back in July. “Around us the market has become more compelling, and so we just feel like there’s continued validation of the strategy, the approach and the importance of the sector.”
5. Asian digital health markets will continue to rise
Our eyes are on the Asia/Pacific market for 2020. Last year Beijing topped the list of the most digital health funding in a non-US city, coming in with $855.4 million, according to Startup Health’s 2019 funding report. While this is number is about $100 million less than last year, it pulled ahead as the clear leader as the international funding hub over London (which it was tied with last year), and we expect this trend to continue. Mumbai, Bangalore, Shanghai, Singapore, Guangzhou and Delhi also made the top ten list.
“In 2018, the total amount of venture capital that was invested in Asia Pacific amounted to about $6.8 billion. To put in context, in the US it is $8.2 billion and $2 billion for Europe,” Julien de Salaberry, CEO & founder of Galen Growth Asia said at the SFF x SWITCH conference in Singapore in November. “So clearly Asia Pacific is the number two in the world with some four-and-a-half to five thousand startups in the region that are growing from strength to strength and raising more money, getting more FDA regulatory-type approvals,."
We expect Asia's funding growth and digital health maturity is already becoming evident. For example, China’s Tencent Trusted Doctor platform raised $250 million in a fundraising round in April. Additionally, Indonesia-based health-tech platform Halodoc raised $65M in a Series B funding and Chinese medical AI startup Synyi raised $36.3M in Series C funding in early July.
China, by far the economic powerhouse in the region, is expected to continue to lead the funding. This is particularly true following the kickoff of Healthy China 2030, the nation’s first long-term strategic health plan since 1949. This means there is now a government mandate that makes healthcare policy a priority. However, India and the Middle East will also likely continue to crop up on the radar.
6. 2020 will be a banner year for digital health commercialization and distribution
As more digital health products hit the prime time, we see a splintering in the path each is taking to market — especially within the realm of digital therapeutics. Among many of the other major takeaways following last fall’s digital-pharma breakups is an understanding that these products are unlikely to follow the traditional drug development and distribution model.
Pear’s situation in particular highlights irregularities in the back half of the process. The original kickoff for Pear’s reSET was a hybrid strategy that avoided physical pharmacies, and instead had physician-written scripts sent to a Patient Service Center that guided patients through downloading and using the app.
When Novartis’ Sandoz stepped away from the arrangement in October, Pear’s CEO and President Corey McCann stressed that his company has now established “the commercial infrastructure necessary to solely handle commercialization.” This suggests that going forward, the company will be hesitant to partner with another pharma to support the launch of its other pipeline products.
The whole scenario could be seen as something of a vindication for Akili, which announced as early as last January that it was bucking the trend of pharma commercialization partnerships in favor of developing its own digital therapeutic distribution platform. And while the company hasn’t pulled back the curtain on exactly what shape that platform will take (and likely won’t until its AKL-T01 product receives its long-awaited FDA clearance), CEO and cofounder Eddie Martucci is still beating the drum of new market models for digital therapeutics.
“The traditional medicine models, I don’t think that’s where we should be as digital therapeutics,” he said during a late September event. “I don’t think we’re ever going to demonstrate value to patients in the way digital therapeutics really can … unless we make big bets, unless we say traditional medicine not only may not be the answer, is very likely not the answer, and we need to invest and stumble a little bit, experiment [with] putting out creative models.”
Also fueling change is the FDA’s PreCert Program, an experimental regulatory pathway that could substantially lower the burden for digital health companies hoping to more rapidly release their products. The program’s one-year pilot came to an end with the calendar year and the agency is promising the publication of a report card similar to what it put out around the half-year mark.
Should the FDA like what it sees and moves to fully implement the new pathway, participating companies will (for better or for worse) have free rein to launch and relaunch their digital health products much more easily than ever. This would stand as a major benefit for software-based products in particular, which could begin pushing out updates of their algorithms or other underlying systems at a rate that traditional biologics could never hope to match.
But these points aren’t to say that tried-and-true distribution models are unable to accommodate large-scale digital health commercialization, and the payer side of the industry in particular has made some major crossroads here. One clear development has been pharmacy benefit managers like Express Scripts and CVS Health's work on digital health formularies and similar resources to help their clients select vetted digital health products from third-party vendors.
These major market players are making a major effort to corral digital health products into an offering that’s more palatable for their longstanding businesses. And it should go without saying that those companies taking part in the PBMs’ opening salvo are viewing the traditional-yet-novel pathway for reimbursement and distribution as an important part of their long-term strategy.
“We [at Propeller Health] believe this is a really good step in the process of making digital health and digital therapeutics more traditional in terms of reimbursement and distribution,” Chris Hogg, CCO of Propeller Health, told MobiHealthNews after announcing his company as part of the Express Scripts formulary’s inaugural cohort. “For us, we view this as a mechanism to provide access and reimbursement for many more patients, for a product that we have clinically validated.”
The takeaway here is that 2020 in particular is poised for a convergence of contrasting go-to-market strategies. The success of one won’t necessarily disqualify another, but expect the digital health players of tomorrow to follow the most successful examples on display throughout the next 11 months.