Digital healthcare continues to boom as consumers demand easy access to healthcare information. Compared to 2018, there are currently twice as many companies that are working to produce digital health solutions.

A new research report suggests that the global digital health market is expected to be valued at $220.94 billion by 2026, with a compound annual growth of 14.8% between 2019 and 2026. The COVID-19 pandemic has also highlighted the need for digital health solutions as people avoid making hospital visits unless necessary. There is a growing need for personalized healthcare tools based on virtual services, artificial intelligence, and home-based diagnostics. These tools enable patients to have more control over their healthcare needs. They also promote greater independence.

In this article, we will review the essential elements of successful business strategies with respect to a digital health business and how you can use them to achieve short-term and long-term success.

What Are the 6 Attributes Essential for a Successful Digital Health Business?

According to a report by McKinsey, digital health companies can apply 6 essential elements to build a successful business. The report collates insights from leaders in the digital health industry and suggests focusing on the following aspects to achieve a positive outcome:

1. Focus on Addressing Customer Needs

Digital health startups cannot simply rely on advanced technology when developing their products and services. Instead, their success lies in their ability to offer a clear value proposition that addresses gaps in the market and fulfills customer needs. If your product or service does not offer something substantial to its target market, then it can be difficult to encourage its adoption among customers.

The report cites examples such as Hello Heart and an online therapy platform by Ieso Digital Health. The former is an app that helps patients manage hypertension and other indicators of heart health. It was developed by Maayan Cohen, who experienced firsthand how difficult it can be to find easy-to-understand healthcare information tailored to a patient’s specific needs. Her struggle led her company to develop the app to help others experiencing the same problems.

Digital health startups must conduct their due diligence and rely on personal experiences and market research to develop products. As the adage goes, they need to “sell the problem they solve, not the product.”

2. Provide a Seamless User Experience

A key problem in digital healthcare is offering simplified solutions to complex problems. If people struggle to use your product, they are likely to search for easier alternatives. Consequently, a digital health business needs to design its products and services, keeping its end-users in mind. These can be patients, healthcare providers, caregivers, or payers. Try and consider things from their perspective and identify essential pain points. You can also ask important questions like, how much training is required to use the product? Does the product offer clear and easy-to-understand information? Will the end-user need to seek help from a third party to interpret the information provided? Understanding these aspects can help you develop a human-centered design.

Remember, if you create a human-centered design, you improve your chances of ensuring that patients can engage with the product or service. More importantly, a smooth user experience encourages end-users to continue using the product/service, which is vital for business success.

3. Invest in Qualified Medical and Technical Human Resource

Like all businesses, a digital health startup is only as good as the people it employs. You cannot expect to derive value-based solutions if you have an unqualified team in place. This is particularly important in the healthcare industry, where you need individuals having strong clinical and medical expertise and an in-depth understanding of underlying diseases and their treatments.

Besides medical expertise, digital health startups may also need people with expertise in regulatory processes. These individuals can offer guidance during the product development process and make it easier for digital health startups to overcome critical bottlenecks and get faster approvals.

An additional challenge for digital health startups is creating a productive working environment for their medical and technical staff. These individuals are used to working in very different setups, and streamlining their work cultures and methods can be difficult. According to the report by McKinsey, digital health businesses can consider developing a hybrid model that offers an inclusive work approach and culture to suit both types of staff.

4. Choose the Right Regulatory Path

Seeking regulatory approvals can add credibility to digital health products. However, given the extensive nature of these processes, digital health companies need to be careful about the type of approval they seek. For instance, you may need approval on products that treat a health condition. Conversely, you may require approval for a product that offers dosage recommendations for medication. Both types differ significantly in terms of the burden of proof required by the FDA. Clarifying this aspect at the onset can save you a lot of time and energy.

Companies must also choose between which regulatory pathway they want to follow. There’s the De Novo pathway, the FDA’s precertification pathway, and the 510(k) submission pathway. Once again, each pathway has its advantages and disadvantages, and you need to choose one that complements your product/service.

5. Have a Core Asset and Competitive Advantage In Place

Successful business strategies are built around a core asset that offers a competitive advantage to the company. Your core asset can be an app or software, or it can be data or hardware. The nature of your core asset can have a significant impact on your long-term sustainability, and you need to be careful about what you invest your time and energy in.

6. Build a Scalable Business Model

There are several business models that digital health startups can use. These include:

• A basic model where a physician prescribes treatment paid by the patient’s health insurance provider.
• A basic model where a physician prescribes treatment paid by the patient’s health insurance provider.
• A model where employers pay for solutions designed to improve employee productivity by addressing common health issues. This model can reduce healthcare costs for self-insured employers.
• A model involving payers that provide a solution to policyholders and pay a fee to the solution provider.
• A model that offers a free service to patients to generate insights using patient data and monetizing it.
• A model that sells a solution directly to customers willing to pay for it.

You don’t necessarily have to stick to one model. Instead, you can try out various models and find one that suits your business. You can also transition to a different model as you develop new products and services. Whatever you choose, make sure you can scale it to match the growing demand for your products and services.

If you are interested in learning more about successful business strategies for digital health businesses, get in touch with our team at EdgeCollab. We specialize in improving organizational processes and help companies address customer pain points, develop value-based products, and achieve long-term success.