Platforms are All the Rage in Digital Health

As investment in digital health booms, digital platforms are making the biggest bang. Investment in healthcare platforms increased by 420% from 2017 to 2020, or at a 74% annual growth rate, the fastest pace in the digital health sector, which had a 65% year-over-year growth rate for the same period. This according to Summit Health, which also noted that four of the top 10 digital health deals in 2020 were for platforms.  

Good idea and not a surprise that healthcare is trying to catch up. 

Nobody makes a move in daily life today without hopping on a platform from shopping (Amazon) to house hunting (Zillow). Healthcare has been historically and annoyingly behind, however, when it comes to information technology. For example, many electronic medical records (EMR) and health IT systems still are not interoperable. 

According to Summit Health, “Digital health platforms are uniquely suited to address challenges endemic to healthcare, where most issues ultimately stem from a lack of uniform data and the massive fragmentation that exists both within and among different stakeholder groups, impacting everything from care coordination and care quality across the spectrum.”

Digital health platforms of various types have emerged. Consumer-facing platforms include convenience care enabling synchronous and asynchronous telehealth visits and provider interaction. Care-management platforms facilitate health and wellness tracking. Retail platforms extend in-store customer relationships to online health services, and pharmacy platforms address the needs of consumers, employers, benefit managers and health plans. 

On the provider side, health systems are building organization-wide, multi-function platforms to integrate care coordination across the continuum. Data integration platforms are linking providers and EMRs to smooth patient data exchange, and biomarker tracking in science and research integrates with care management and “wearable” programs. 

To date, digital health platforms target a specific piece of the vast healthcare puzzle. To address healthcare’s endemic challenges, Seth Joseph of Summit Health identifies key elements of a comprehensive platform in Summit’s Platforms in Digital Health: 2020 Market Report, which start with the basics of connecting buyers and sellers directly to “effectively and efficiently match supply and demand.” 

Direct interaction by users on both sides improves transparency and speeds connections. A comprehensive platform “reduces information asymmetry” allowing buyers to “tap into a network of expertise far beyond their own, increasing access to and the speed of expert knowledge and information sharing.” Sharing reviews and feedback empowers buyers, increases supplier competition, and enables sellers with high-performance products to rise to the top. 

Effective platforms also dramatically reduce search, transaction, and contracting costs for buyers, according to Joseph. Examples like Uber, Zillow and Open Table upended staid, inefficient industries by making the buyer-seller connection direct with fewer hassles. Procurement in healthcare, notoriously protracted and painful, is a prime target for friction reduction. An effective comprehensive digital health platform could standardize tedious transaction, contracting, certification, regulatory and legal rigmarole to speed the process while reducing costs and headaches. 

Technology has revolutionized all other industries. Will a comprehensive digital health platform truly transform the healthcare system and address its many challenges? Investors appear to be betting on it.