October 12, 2020

The digital health landscape is changing fast—are you ready?

Daily Briefing

    Covid-19 accelerated digital health in unprecedented ways, forcing health systems to examine their digital health strategy. In this episode, host Rachel Woods sits down with Advisory Board's John League and Andrew Rebhan to talk about some of the recent major digital health deals, including the acquisition of Livongo by Teladoc; other developments in digital health, such as Amazon's new wearable; and what the future of digital health will look like.

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    Read a lightly edited excerpt from the interview below, then download the episode to hear the full conversation.

    Rachel (Rae) Woods: There's been a huge amount of activity on the digital health front recently—the acquisition of Livongo by Teladoc, of course, but also Amazon's new wearable, MDLive's announcement that it will likely launch an IPO next year, Fitbit's new line of wearables, and Amwell going for the public market even as Google invests $100 million into it.

    So let's talk about what providers could actually be doing next, or what they should be doing in response to all of this disruption. How can a provider organization actually compete with a Google or an Amazon or I'm just going to say it, Teladongo, in this space? Or even should they be?

    Andrew Rebhan: I think that a lot of health care stakeholders need to come to terms with their core competencies. They need to have a moment where they understand what they're good at and they need to drop the rest.

    The ability to know that you're not going to be Amazon or a Google is a very healthy perspective to have when there's so much digital disruption going on around you, because you don't want to become so ambitious that you, essentially, throw money into a hole, and so I think that is the first step, but that's not to say that health care providers don't have their advantages.

    Obviously they have embedded relationships with physicians and other clinicians, they have their relationships with their existing patients, but they also have of course just the gold mine of clinical data that they work with, the firsthand knowledge of care delivery and workflows. And that's essentially the pilot environment that all of these digital health firms are trying to test their solutions in anyways, so a health care system could certainly leverage these advantages where appropriate to partner up with digital health firms or big tech companies. But I think that trying to compete with them head-on—unless you're a very innovative, large-scale, heavily resourced health system—is unrealistic.

    John League: I agree completely. I think competition is the wrong way to frame these relationships. Look at Livongo, that company focused on chronic condition management. There are plenty of unmanaged or undermanaged patients out there—just because Livongo is getting patients in your market that doesn't mean there are not folks out there for you to be serving. There's no lack of opportunity, certainly.

    I think the better way to think about this than competition is, what can we learn from these players? Both from the perspective of, how do we get the same kind of lower cost outcomes that a lot of these folks are getting, but also taking their approach as what problem of care delivery can telehealth solve rather than looking at telehealth as a problem to be solved.

    Woods: We talked about this in the last podcast, it's not about what should my telehealth strategy be, it's how does telehealth fit into my existing strategy or solve the existing challenges I already have?

    Rebhan: Another thing about this that I left out as far as how a health care provider might adjust here is that they should be looking to leverage some of their existing vendor relationships anyways. This is essentially going to be focused around the EHR in most instances, right? So I have this EHR that I invested a ton of money in and it has the capabilities to be modified and customized and we can build out these third-party application programming interfaces (APIs) where appropriate to expand our solution set. And so, if you already have that existing vendor relationship, why not try to leverage that in this kind of expanding set of digital health capabilities?

    Woods: So then, if competition is maybe the wrong way to frame this, I'm curious, in your opinion, how worried should providers actually be as they hear more and more announcements like the ones we've talked about in today's podcast?

    Rebhan: I think it's going to be a mixed bag. Again, Covid-19 is a very special case in a lot of ways. I think that there is the unfortunate reality that, because digital health funding expanded so quickly and there's so much hype in this space, the market has been flooded with a lot of unproven untested solutions from companies that are both the kind of large, legacy vendors who are making these very just quick business pivots, to startups that nobody's every heard of and they're just not sure what they can do.

    So I think that there is unfortunately a little bit of a wait and see approach as the market kind of filters out some of these solutions that are not scalable, that don't really have a clear ROI, and so there is a sense here of not necessarily being the first mover in all cases.

    Woods: John, what do you think?

    League: I think the bigger issue is when we start to look at these organizations that are expanding vertically and changing from point solutions to solve a specific care delivery problem, to develop more integrated services that extend across the care continuum and parallel the kind of care coordination functions that health systems and medical groups have tended to think was their domain.

    I'm not sure that worry is the right question, but I would certainly be watchful. Again, going back to what can we learn from these folks, but also what do we see about how payers are responding to those alternative channels? What is the uptake among consumers? What sort of testing and data do we have on the efficacy of those things? That's where I think the rubber meets the road and we continue to see more and more research quality research being done across a host of telehealth modalities, I think that's the thing that we really want to be aware of as we think about, are we prepared for delivering care in the future?

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