Turbulent Times in Health Care Are Ahead (But That's Good News for Businesses)
Between major policy and regulatory reforms, payment changes, and rapidly advancing technology, health care is being transformed on several fronts. That means there are unprecedented opportunities for entrepreneurs to enter the space. Inc. recently spoke with Chris Wasden, managing director of consultancy PricewaterhouseCoopers's Healthcare Strategy and Innovation Practice, about the new-business potential in mobile health care.
Why is mobile health a promising area for new companies?
Chris Wasden: The worst place for an entrepreneur to go is into some place that's so stable and so rigid that no new ideas will ever be accepted. The many changes in technology--social, mobile, analytic, and cloud--are creating disruption.
They are also creating expectations in consumers that they should have the same experience in health care they have in every other industry. Entrepreneurs who have experience in other industries and can bring those experiences to health care from other domains have an advantage.
And within health care, there is no legacy health care organization that has really ever considered the consumer their customer. That creates opportunities for entrepreneurs who understand consumer behavior and consumer adoption of technologies to really make a difference.
But isn't health care still a relatively structured industry?
CW: Well, that's definitely true. The thing that makes health care so rigid is primarily the payment system. The inability to really change the payment system to accommodate new value propositions is the biggest challenge. Another challenge is that it's highly regulated, so you have to deal with regulatory authorities to get certain types of technology approved.
And also, you are dealing with a sector that has not traditionally had organizations or people with very big risk appetites. Doctors are notoriously cautious when it comes to doing things that are not highly validated.
So when you look at other tech companies that have tried to get into health care, some of the biggest have failed because they haven't been able to deal with these challenges. It's not for the faint of heart, but what you see right now with a lot of startups is that there is more willingness to create change in health care than we've seen in the past.
How should would-be entrants approach those regulatory barriers?
CW: You need to understand the problem you're trying to solve and come up with the best solution without trying to constrain that solution by trying to avoid regulatory approval. A lot of digital health startup companies say, "Oh, I don't want to go through the FDA. I don't want to deal with regulatory approval. Therefore I will design my solution to be such that it won't require regulatory approval."
What that means almost by definition is that you're going to make a bad solution, because you're going to constrain it so that it doesn't provide a very intelligent, sophisticated capability. You don't want to become one of these 30,000 apps in the app store that nobody ever uses because it's not very good. So ignore the fact that the FDA is going to perhaps look at what you're doing, at least for now. Focus on designing the solution that's really good and really effective. If you have a really good solution, don't be afraid to take it through a regulatory approval process.