I’ve worked in digital health for a while (I’m the co-founder of digital health start-up Care at Hand and a physician at Boston Children’s Hospital and Boston Medical Center), so I was as surprised as you may be when I discovered a tough truth: despite over $5 billion in investments in digital health in 2014, there appears to be no correlation between that investment and improved quality of care for patients. This information comes from a recent study out of the Institute for Healthcare Improvement (IHI).
When my colleagues from the IHI and I decided to conduct this study, we knew one thing for sure: most major healthcare organizations purchase healthcare technology with little guidance. We wanted to help organizations and individuals better choose and implement technology based on the various dimensions of the Triple Aim, one of the guiding principles of the $1 trillion Affordable Care Act (ACA). The Triple Aim includes improving patient experience, improving the health of populations, and reducing the cost of care. Which healthcare technologies were actually helping Americans achieve the Triple Aim?
Our study included a systematic, blind review of the top 100 most funded health startups in 2013. In our analysis, we sorted each of the technologies based on the dimensions of the Triple Aim, end-user, type of technology, level of investment, and level of evidence. And what we found is something I’d hoped not to see: the Triple Aim influences many of the provisions of the ACA, yet there are major gaps between where investor money is going and where we should be investing if we truly want to see change in our healthcare system. Only 2% of the technologies reviewed in our study hoped to improve all three dimensions of the Triple Aim.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
Concentration and gaps in digital health
This begs an important question: If we’re investing in technologies that don’t support the Triple Aim, how do we decide where to refocus our efforts? Here are some of the little-known (and huge) business opportunities in healthcare reform – opportunities that may help us put our money where our stethoscopes are:
- Invest in the Research
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Andrey Ostrovsky, MD Website Physician and social entrepreneur. Creating disruptive technology to better health for vulnerable populations. Specializes in applying Lean Startup Thinking and Design Thinking to discovering social and commercial value of innovations in healthcare. Andrey blog's at www.disrupthealthcare.org. He is the CEO and Co-Founder of Care at Hand, Inc (www.careathand.com). He practices as […]
Only 23% of the technologies in our study had peer-reviewed research supporting their claims of improving medical outcomes, decreasing the costs of care, or improving patient experiences. What about the rest? They had little or no research supporting them at all.
It often seems intuitive to invest in a company with a strong mission, a good back-story or a well-rounded team. But what’s important to note here is that unlike many other sectors, failed healthcare investments have implications beyond poor financial ROI, including morbidity and even mortality. So when we invest in healthcare technologies, we should, in fact, be focusing carefully on areas that promise real, research-backed advances. What does this look like? In our study, companies with peer-reviewed research to support their claims included Proteus Digital Health, the creators of ingestible sensors that track medication compliance; Lumosity, an online brain exercise program; and PatientsLikeMe, a patient network and real-time research platform. Technologies with evidence of impact are positioned to have a competitive advantage.
- Target the Trifecta
Technologies that expand their solutions beyond just improving patient outcomes, focusing instead of all three points of the Triple Aim, are positioned to grow. Why? ACA initiatives like the Readmission Reduction Program, Bundled Payment Program, Value-based Purchasing Program and STAR Quality Rating Program are built to incentivize companies that achieve the Triple Aim.
Our analysis suggested that many of the top-funded digital health technologies fall out of the Triple Aim loop because they cater to fee-for-service-based reimbursement. This reimbursement strategy dictates short-term success – success that the ACA is hoping to move away from. Investors need to focus on companies that develop outcome-driven technologies (i.e., population health management and telehealth options), as these companies have the potential for continued government financial support, rapid growth and Triple Aim achievement.
- Run Toward Failure
It may sound crazy, but organizations with evidence of failure often have better chances at success, as long as they use that failure as a mechanism for learning. I recognize that publishing peer-reviewed outcomes is time and resource consuming, especially at a boot strapped start-up. So intermediate and less resource-intensive alternatives that can be used to validate the impact of digital health startups are quality improvement (QI) initiatives. Entrepreneurial luminaries like Stanford’s Steve Blank, Harvard’s Clayton Christensen, and Penn’s Roy Rosin espouse using rapid cycle approaches similar to QI, such as the Lean Startup, to expedite value discovery in organizations large and small. So keep an eye out for technologies with using QI – they’re well worth the investment.
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Our healthcare system is a mess. The Triple Aim is a lofty goal, but one that could change our system for the better with ground-level changes that allow the initiative to fully take shape. What’s required now is a major investment in technologies that pack a big punch, proving that they can learn from failure, that they are focusing on all three aspects on the triple aim, and that their research demonstrates the true potential of their creations. We need to invest in companies that will move us toward, not away, from a system that lowers the costs of care, improves health outcomes and streamlines the patient experience.
[Photo from Flickr user Will O’Neill]
Physician and social entrepreneur. Creating disruptive technology to better health for vulnerable populations. Specializes in applying Lean Startup Thinking and Design Thinking to discovering social and commercial value of innovations in healthcare.
Andrey blog's at www.disrupthealthcare.org. He is the CEO and Co-Founder of Care at Hand, Inc (www.careathand.com). He practices as a pediatrician at Boston Children's Hospital and Boston Medical Center.
