There are two approaches to using consumer-facing approaches in the healthcare sector: consumer health and consumerized healthcare. Although both sound similar and are often conflated, they serve different users and needs, and have vastly different implications. If you’re an entrepreneur in the digital health space, here’s what you need to know about the difference.
Consumer health is an all encompassing term referring to products and services meant to promote general wellness. Headspace, for example, is a consumer health product meant to help a user meditate and practice mindfulness in their everyday lives. It serves the purpose of helping users improve their state of mind and is targeted at the general population through a simple value proposition (use this app, be more mindful) that has given it significant traction. 15 million downloads is a feat unto itself and it has no doubt added immense quality to the lives of users.
Now, there’s nothing wrong with that (in fact, the Sidebench team loves Headspace!). However, consumer health can only do so much. Ultimately, health products focused on consumers are unlikely to move the needle when it comes to lowering healthcare costs and improving the overall health of Americans.
Consumerized healthcare, however is a different story altogether: consumerized healthcare refers to products and services that aim at disease prevention or even full-blown disease treatment, but utilize techniques and practices from consumer industries. For example, White Coat Healthcare is an on-demand provider service that leverages the same behavior and motivations of consumers who seek convenient and quick services, and combines it with preventive care measures (physicals, vaccinations, etc.). AliveCor is a smartphone mounted ECG that can tell you if you have a heart arrhythmia — at its core, it’s a well designed experience that’s accessible to the everyday consumer.
What The Health Tech Startup Needs To Do
Healthcare tech startups must decide which side of the spectrum they fall into, as the customers, the end users they serve, and the value propositions they must develop are vastly different. In the consumer health space, the customer and the end user are one and the same. In the consumerized healthcare space however, the end-user is often the patient but the customer may be a physician, the patient’s family, or an insurance company hundreds of miles away. This makes it far trickier to craft a value proposition. It takes great care and thoughtfulness to design a product that delivers value to both patients and the stakeholders in their health, of which there can be many.
However, we believe that despite the challenge, the latter approach has the potential to make the biggest dent in this country’s healthcare woes — provider shortages, lack of access, and poor chronic disease management. It also has the greatest potential for long-term gain — it is estimated that over 80% of healthcare spending in the United States is for individuals with chronic conditions. In the U.S. 2010, heart disease and stroke cost $315 Billion and diabetes cost $245 Billion.
So what do new healthcare tech startups building consumerized healthcare products need to know about how to win in this space? First, the obvious requirement is that there needs to be a value proposition linked to either the prevention or treatment of a disease. Propeller Health helps patients manage and prevent Asthma and COPD attacks. Second, the world of medicine is rooted in scientific merit — and evidence-backed solutions are adopted far more readily. Omada Health has been able to show, through multiple clinical trials, that its diabetes prevention program is efficacious. This evidence base is a critical part of validating their value proposition. Third, it’s essential to engage with key experts and stakeholders, and ensure that you leverage stakeholders from all sides of the table so you have a full understanding of who your customers are. The thing that healthcare tech startups need to ingrain in their approach is that even if you can’t build out a product that is perfect for all stakeholders, you still need to be aware of the many interests at play as you plan out your product’s roadmap.
Finally, the standard best practices apply — use an iterative approach, talk to actual users, and never stop learning. In the end, choosing the path of consumerized healthcare products is far more challenging from both a business and technical standpoint than building purely consumer health product, but it can be far far more rewarding in the long run.
— Ben Nguyen, Digital Health Strategist
Ben is a medical student at the Keck School of Medicine of USC, where in addition to medicine, he studied medical device development, product design, and business strategy at Marshall and Viterbi as part of the HTE@USC program. Prior to joining Sidebench, Ben worked at the USC Center for Body Computing, a digital health research division and think tank, where his projects involved everything from virtual human avatars to mobile chronic disease management to biometric sensors. Follow him on Twitter: @BDKnguyen
This article was originally published on Medium