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Thought leadership and innovation for the Pharmaceutical Industry

Digitizing an analogue process may deliver benefits but only a radical rethink will bring true success

By Douglas Haggstrom on Nov 1, 2017

In June, the Techtour Healthtech Summit returned to Lausanne with an overarching theme of the convergence of medtech and digital health, and the search for a successful digital business model.

Although there were two tracks – medtech and digital health – there were digital health companies in the medtech stream and lab companies in the digital health stream that felt very much like medtech.

One way to tease apart this convergence and to ask how future business models may evolve is to look at whether companies simply digitize analog processes or fully digitalize.

The digitization of an analog process aims to deliver efficiency; it may change the economics but will probably leave the existing players and business models in place. Think how dollars from traditional ads in print and TV have become cents in online banner advertising, yet the players and purchasing processes remained similar.

Digitalization, however, can lead to the creation of new sources of value and a change in business model. Think how Netflix and similar services have changed the traditional TV model from how we access content to who produces the programs themselves.

Renal Tracker began with digitization of an analog process – it built its mailing list and initial customer base by e-mailing PDFs of existing guidebooks on renal failure. They then it progressed to the digitalization of care for patients at risk of renal failure by combining information around diet and exercise with coaching, training programs and personalized one-to-one online help from a nurse to create a program they could sell directly to patients. A classic software bootstrap story applied to healthcare.

Other patient-focused companies at the Healthtech Summit included two from last year. The first, Noona Health, presented further clinical evidence and experience from the field that demonstrated how patient-reported outcomes could increase early intervention and reduce adverse events for cancer patients. The second, Sword Health, has changed from supporting physiotherapists with feedback on patient performance to an entirely digital system that can potentially replace physiotherapist for certain rehabilitation tasks.

The electronic health record (EHR) is an example of the digitization of an analog process that has yet to deliver its full value. Several companies looking at patient flow have shown that a digitalization approach can deliver value by rethinking how work is done. Lumeon Care and Linda Care both demonstrated how healthcare providers can change workflows by automating some tasks to free up resources and improve the quality of care.

Clinical trials are another area where companies have gone beyond digitization. Both Trialbee and Be the Partner have shown that digitalization can not only make trials more efficient but create new value by extending the populations and settings where trials can be performed.

Finally, when it came to the question of what digital health companies needed to succeed, one idea dominated – the need for a strong sales and marketing team knocking on doors. A distinctly non-digital solution to building a winning business.

Doug Haggstrom writes on developing digital health business models with a focus on what can be learnt from other industries. He previously wrote the Digital Health Inside Pharma column with Tina Boggiano.