The health care sector does not behave like other industries when it comes to money. First, attracting investors – especially in the early stages - is minimal, and the odds of capitalizing on a blockbuster drug or device is becoming ever slimmer. Second, because the U.S. health system does not incentivize it, payers do not rush to financially support or reimburse the waves of new technologies flooding the market. Third, companies entering the market often fail to stand out from the noise of competitors, meaning that getting noticed by investors or being able to commercialize well is near impossible.
In fact, according to Asher Rubin, Global Head of the Life Sciences and Healthcare Industry Team of Hogan Lovells, when separating the tools from the toys in digital medicine, some of the first questions asked by potential investors are, “How will it be approved, or not? How will it be reimbursed? And will the industry even care enough to pay?” Therefore, health investors remain risk averse - and if the recent past has taught us anything, it’s that there are far too many options and an ever-changing industry that will ensure this trend continues.
Because landscape transformations due to technological advancements and policy shifts have made health care financing a Wild West compared to other industries, products and devices of real value have a hard time communicating their importance above the noise. The upside is that the products, devices and apps of impact have led to digital health and medicine progress in the last five years, attracting potential investors and payers. But the downside is that there are so many new items making similar claims, even the experts can’t determine the difference.
At the recent Digital Medicine Connect conference in Boston, VC’s claimed they see the value in getting ahead of growing trends like digital health and mobile medicine. But, they are taking cues from third-party payers like insurance companies (particularly in states with one primary insurer like Blue Cross Blue Shield or Kaiser) to see where the returns might come from.
They are also searching for products that are ready to be commercialized to the public, and past the R&D trials, as they are more likely to succeed. This means being funded early is very difficult for startups. That is, unless they embrace the new world where M&A is replacing R&D, and the startup is willing to go in as a partner with the investor for commercialization. And we’ve been seeing this more frequently as larger company’s like J&J and Google are willing to put money into supporting health startups, but also partnering with them to roll out packages of products.
While VCs have never played in the health sector the way they traditionally do, the importance, interest and potential gain in the emergent health tech space is proving that they make good partners. And for startups, partnering with investors in novel ways can create all kinds of new opportunities to learn from their expertize. Not only from financial investment, but also mentorship, network, intellectual property and contributions to help make commercialization successful in today’s market. Which in turn decrease the risk for third-party payers and those who reimburse for new technologies.
With the Midwest relying increasingly on foreign-born healthcare professionals to fill critical labor gaps, a new study by the Chicago Council on Global Affairs finds that urgent immigration reforms are needed to ensure the future vitality of the healthcare sector. Updating visa allocations for foreign-born graduates from US medical schools, removing H-1B visa quotas and caps for healthcare professionals, and streamlining credentialing processes for foreign-born professionals would help the United States, and the Midwest in particular, mitigate acute shortages of healthcare workers just as the aging baby boomer population is expected to demand increasing resources.
The healthcare sector, which is fundamental to the U.S. economy and livability, is under strain:
A continued political stalemate on immigration reform means these issues will only grow in urgency. The report argues that Congress should work urgently with the next Administration to update policies to:
As gamification and game mechanics gain popularity in the healthcare space, so too does the need to understand primary motivational factors that influence human behavior. Gamification itself uses game elements and digital game design to address common business dilemmas and drive social change, and has been very popular with the military, airlines industry and even higher education institutions. However, the ability to influence action with gamification is only now gaining traction in the health industry.
Although gamification is here to stay due to factors that include vast U.S. utilization of smart phones, a tech savvy 18-34 population (38% of the uninsured) and advancements in the field such as augmented reality, the underlying motivators to change human behavior are not new.
Behavioral economics differs from traditional forms of economic study – which generally assumes unbounded rationality, unbounded willpower and unbounded selfishness – because it recognizes that individuals are bound by many factors that inhibit decision-making. We see this daily through activities such as smoking and drunk driving. Further, in the healthcare and health insurance sectors, neither patients nor providers know the true costs of care.
Without knowing actual costs of care and fully understanding the various options available, especially in moments of panic, rational decision-making is near impossible. Therefore, departures from rationality materialize in people’s beliefs and in their choices.
With a youthful population in the US that lives a significant portion of their lives online, and are accepting of new technologies in the health space in exchange for ease, the growth of applications and services that target health behaviors is developing at lightening speed. Further, these applications give rewards that motivate change. Most gamification methods in health and wellness are presently built around the notion of positive reinforcement. This is true both in engaging and monitoring patients and engaging and motivating providers. The same principals that incentivize humans to be active in their own health incentivize practitioners to provide better care, leading to better outcomes for patients, and therefore a hospitals bottom line.
As the new landscape of healthcare in the United States takes root, gamification technologies and advances will play an integral role in transforming health and care. Using smartphones, tablets and other mobile devices game mechanics will become more prevalent in almost all parts of the health ecosystem, from education to accountability and monitoring.
Gamification Elements of Vital Importance in Health Technology:
Using long-held behavioral and economic understanding, the ability to improve health outcomes through engagement and interaction has never been greater. Gamification has been a driving force in many sectors of business and social interaction, with healthcare prime for this kind of change. Pathfinder is optimistic that gamification and digital game design techniques, patient-centered care will see great growth.
Send along your stories on behavioral economic, incentive and gaming tactics. Pathfinder would love to learn more about what your company is doing and help connect with others in the space.
When confronted with a health system that is expansive beyond comprehension, very complex and severely flawed it is no wonder patients are often passive observers. Providers and administrators often do not know how to navigate the environment themselves, let alone a patient who infrequently touches the system.
This is further complicated by the ever-changing world of health care practices. While adoption rates are often very slow in the clinical setting – taking on average 17 years between research findings and clinical adoption – the transition for consumers is never-ending, often leaving those administering care and those needing care on very different paths.
Despite this, we know that when a patient is involved in their own health, better outcomes are experienced. Provided with the right tools, we know that many patients will use those tools to their advantage. We also know that new Affordable Care Act and Meaningful Use policies target the creation of better engagement and satisfaction methods and metrics for patients.
With that model in mind, how does a provider get a patient to be “engaged” in their own care and stay on course with their prescribed care, all while being compliant in a new world of health reform and get reimbursed? Perhaps it is getting a patient to exercise regularly, take medications properly, or something interactive and different. While no one answer exists, there are steps that can be taken to improve engagement that lead to patients feeling informed enough to take positive action in their own care. Further, with a growing body of literature and new policies, reimbursements and standardization are beginning to coordinate.
When only 10% of consumers are estimated to be “very confident” in their own abilities to find high-quality care and 6% to “affect the cost of care,” it speaks volume about the distance US-based systems need to go to empower those we care for.
Outcomes are a reflection of the pathway that the patient takes, and it is necessary to understand that each person has a different level of understanding, set of resources and faith in their own knowledge. However, patients want to be involved; they want to help.
Providing basic information and ways to seek and find the answers patients need is paramount Virtual coaching, online nursing and secure plan management are also increasingly more important tools that can be employed immediately WITH patients.
Whether it is drug adherence, follow-up rehabilitation or making initial care decisions, improving individual perceptions, understanding and abilities is a key component of improving outcomes and creating a strong foundation of patient engagement.
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