In my view, Long is the key word in Digital Health. Reforms around the world are creating new opportunities for healthcare players new and old alike. While opportunities abound, healthcare remains a highly-regulated industry with a complex third-party payment system. It is crucial for new ventures to gain an understanding of the realities of actual operating environments — working with real-world data and dealing with payment.

Private and public payers form ecosystems from payment streams, in the U.S. and elsewhere. Every innovative health product must feed from these payment streams, which change often and ultimately are controlled by government agencies. Look no further than the Theranos saga for recent evidence. Or the soaring fortunes of Epic, who became a $9BB company thanks to the HITECH act.

There are really just 2 ways to achieve outsized returns in healthcare:

1) Develop patient-centric and science-driven companies, which by definition are geared to high-impact innovation, but are years away from product launches. Industry giants, like IBM, can and should create whole new industries spawned by new insights into biology.

2) Map a clear path to money, generate revenue early and scale fast through the healthcare delivery ecosystem. But, be careful, “fast” is still on the healthcare timeline.

It’s not all about technology. It’s about change management, and change management at enormous scale. Remember, a modest size health system employs 10,000 people, ranging from unionized nurses to thought leaders in a variety of health disciplines, not to mention a large number of admin staff.

Certainly, reforms created the urgency for executives to act upon inefficiencies in the healthcare system. But as one hospital CEO half-joked with me years ago: “If I issue tomorrow a directive that to improve patient safety all nurses should keep a pen in the right corner of their desks, nothing will happen.”

AuthorVeronika Litinski