The real innovators in Digital Health won’t be Amazon, Google and Apple
In the recent past the expectations have grown that Amazon, Apple, Alphabet (Google and Verily) and other tech giants will take the lead in Digital Health. The reasoning also makes sense: At this point there aren’t any other organizations with similar access to customers, enormous AI abilities and especially the skills to deliver innovative products in highly competitive environments.
There already are specific products and services available and under development by these companies. Alphabet has been working on contact lenses measuring your blood sugar levels (in a cooperation with Novartis). Apple has been working with Stanford University to investigate whether their existing health tool Apple Watch can be used to detect atrial fibrillation.
However, especially Amazon is suspected to take the lead in Digital Health. Given their elaborate logistic network they could start by slowly entering the market of pharmacies. They have the creative and technological power to introduce reliable online prescription verification and can then deliver the required pharmaceuticals within the same day of order. Amazon definitely has the power to render pharmacies redundant.
Another interesting way for Amazon to revolutionize Digital Health is their intelligent personal assistant Echo. The simple and minimalist speaker offers a cheap yet powerful way to perform telemedical services. In combination with a camera (that’s built in nearly every laptop and smartphone) you’d be able to receive virtual advice by an artificial and/or real doctor — and have amazon deliver the prescribed medication afterwards.
So why will the tech giants not be the real innovators in Digital Health?
Have you wondered why there haven’t really been unicorns in Digital Health yet (except for companies like Outcome Health being rather Healthcare tech than Digital Health)? Despite countless conferences, incubators and millions of dollars invested in that field? The reason is that healthcare works differently than other industries. Uber, Airbnb or Dropbox offer simple technologies that can just be replicated for any new market.
Digital Health, however, can only be scaled in such an extent for a few chronic diseases like diabetes or depression. Accordinlgy mySugr, a popular digital diabetes management platform has managed to exit for $100M to Roche. SilverCloudHealth, a digital mental health startup providing online therapy to improve mental wellness managed to raise almost $10M in the beginning of the year.
BUT…
Firstly, this is actually not a lot of money considering that diabetes and depression might represent the only two diseases that allow start-ups to provide scalable solutions.
Secondly, diabetes and depression are only two diseases. And they are so complex and unique that both require an own startup that provides a perfectly suited Digital Health solution. It will not be different for the thousands of other diseases and medical conditions. Each and every disease requires an own, individual Digital Health solution.
And most likely none of these diseases will provide enough patients to build a unicorn startup. And while Google, Amazon and Apple have the AI tools, datasets and customer base to be Digital Health innovators they lack the medical expertise and the deep understanding of patients. In order to offer patients the solutions they need you have to have the medical background and an extensive track record of interacting with patients. Patients want solutions that are perfectly suited to their needs and want to keep the level of quality they know from their doctors.
Also, Digital Health will turn out not to be so attractive for the tech giants. They want solutions they can easily scale. Medical Doctors and researchers by nature are very independent and want to provide their solutions autonomously. Instead of having a private practice they will found start-ups using the knowledge they have acquired in their years of practicing medicine.
In addition to that recent success stories in Digital Health have always been created by very creative and independent entrepreneurs identifying a niche. Kaia health for example provides an innovative digital therapy to treat back pain. Their services are AI-based and might render millions of doctor’s visits redundant by treating chronic back pain remotely. It is unlikely that Amazon, Google or Apple find such a rather small market interesting and also they are too big and mature to come up with ideas that progressive.
Nevertheless, I do think that Amazon, Apple and Google will play an important role. They will offer their AI skills and datasets as a service to the huge and growing ecosystem of small, but efficient Digital Health startups. That way they will be able to make a lot of money and still profit from the Digital Health revolution that is going on.
So what will the future look like:
We will end up with thousands of small Digital Health companies that will work with large datasets provided by health insurers or tech giants like Google or Amazon.
