Building successful digital health ecosystems: mission possible with the right approach! – R2G’s panel at GIANT Health Europe

Building a successful digital health ecosystem via partnership to drive innovation and focus on unmet market needs has become of a strategic importance for established healthcare companies. Various building strategies have been explored by many players in the last decade. Integrating novel solutions to the core business, creating new business models, and jointly operating the digital health program is still based on trial-and-error process for many. Success stories are not common despite plenty of experienced incumbents and great digital health solutions today.

At GIANT Health European Health Tech Innovation Week, Ralf Jahns, MD of Research2Guidance alongside Dr. Jacob LaPorte, Co-Founder & VP, Global Head of The Novartis Biome, Novartis; Dominick Kennerson, Global Head, G4A Digital Health, Bayer; Jonas Hjortshøj, Chief Commercial Officer, Liva Healthcare & Farina Schurzfeld, Co-Founder, Selfapy, delved into different approaches that have been used, what has worked and what were the challenges, lessons learned and success stories.

On May 18th, 2022 Research2Guidance hosted a virtual panel discussion on “Building successful digital health ecosystems: mission possible with the right approach!” with global thought leaders and key decision makers.

What made the conversation insightful and more engaging were the guests, leading Pharma companies and successful startups first-hand business cases, vision and thoughts about ecosystems and the role of each partner in these partnerships, the set of expectations being in place, models and tools used over the time throughout the entire partnership between incumbents and digital innovators.

The workshop like discussion was stimulated by a short introduction from Ralf Jahns, MD of Research2Guidance and the session moderator, who shared some key insights from Building Digital Health Ecosystems whitepaper and survey findings from R2G’s digital health panel on partnerships in digital health: success factors and challenges in ecosystems, as well as the company’s innovation management approach and 8 building blocks to form integrated and impactful ecosystem successfully used by pharmaceuticals, health insurers and medtech companies.

Cases and market insights were shared by

The dynamic market picture was completed by an interesting and inspiring discussion. Together we delved into digital health ecosystems, partner integration and the conversation moved along the lines of

  • What is an ecosystem?
  • What are different approaches used by healthcare stakeholders and in this case by Pharma companies to build digital health ecosystems?
  • What is the problem statement that one wants to solve and what does the commercial model look like?
  • What is it like to work with incumbents?
  • What are the best examples of digital health ecosystems?
  • What are the challenges faced by incumbents and startups and what are the opportunities?
  • What are the breaking points and how to successfully build partnerships?

Over the years, healthcare organizations including pharma, health insurances, hospitals, and medtech companies have used various channels and partnership approaches to drive their digital innovation. Accelerators, hackathons, incubators, company builders are just a few of the tactics used. Identifying and selecting the best partners and successfully integrating them to an organization core business and service offering are at the centre of forming thriving ecosystems.

Covid-19 has also changed the way healthcare is delivered and used, and it has created the need for different stakeholders to build ecosystems that are based on collaboration and innovation. Still, 80% of digital health partnerships are frequently destined to fail.

THE MAIN REASON OF THE PARTNERSHIP FAILURE

According to R2G’s digital health panel the top reasons for partnership failure are

  • Lack of clear partnership strategy. For example, both parties met at an accelerator and in most cases, they do not interact to find out what will be the strategy behind their collaboration.
  • Unrealistic mismatch expectations
    • On the startup side there are very pragmatic expectations, such as funding, sales increase and distribution channel access.
    • On the corporate side there are some high-level expectations, such as access to new technologies, new business models and digital transformation support.
  • Time consuming and cumbersome decision-making
  • Poor partnership management and operation by corporates

There is a serious mismatch and if the partnership is the overall basis of building an ecosystem, both parties need to discuss and align on these points right from the beginning of the collaboration.

Another key point and reason for failure is based on where typically incumbents (pharma, health insurer, medtech) invest their time and where the resources are allocated?

A lot of time and effort are allocated on partnership area identification, partner search and selection, and making the first matches. And when it comes to the areas of high failure risk, the later stages of a successful collaboration, such as partnership model, partnership building and upscaling, and integration the resources are very limited.

OPPORTUNITIES AND CHALLENGES

One should not overlook the contrast in nature of corporate and startup businesses. On one hand, there is, let’s say a Life Science company, that has been around for +100 years with a sustainable business model and the proper processes to support it, which is also not digitally native. On the other hand, there is an agile company, with less experience and hungry to succeed to survive.

The startup culture is still sometimes viewed as very risky and for Germany, for example, risk diversion is the norm. And there are a lot of questions on how to deescalate the risk. G4A is tremendously unique because we have been around for 10 years and because we have been around for so long, we have gone through evolution and have successfully adapted to the industry’s increased expectations for digital ecosystems.” Dominick, G4A.

Bayer G4A partners with healthcare startups and technology companies that are developing innovative solutions in healthcare. Its mission is to scale digital health to create impact, empower lives, and change the experience of health.

The advancement of technology and the adoption by users / patients of digital health solutions, be it health tracking sensors, mobile apps, remote patient monitoring and telehealth services, have shown the opportunity also for Pharma to add value to their patient support programs by partnering with a DTx company or co-package device with their medication, like in the case of Propeller Health and their partnership with leading global Pharma in multiple countries, which marked the first time digital health tool has been packaged and prescribed alongside an inhaled asthma medication.

According to Jacob, The Novartis BiomeWe almost always rely on partners to some extent to help us co-create digital solutions. It is very hard and there is no clear pathway for how large multinational companies can work very effectively together with smaller or even companies in different industries. That was really the problem that the Biome was set out to solve.

The Novartis Biome is a network of innovation hubs, able to use this global platform to democratize access to tech innovation and expertise and keep in step with the ever-evolving healthcare landscape. It has launched an Evidence Lab that partners with hospitals and healthcare systems, so that different solutions that matched problem statements set by business teams at Novartis and potential partner solutions that can solve them, be tested in an efficient and effective way in a real life setting to gather data and make the better decision together as partners.

Flipping the same coin, for a successful startup, such as Liva Healthcare, a leading provider of personalized scalable digital health coaching in Europe, when it comes to preventing and overcoming obesity, type 2 diabetes and cardiovascular diseases, the company has reached a certain scale and size, knowing their solution is working, creating pilots for the sake of pilots is not very helpful.

We have done too many pilots and we are not looking for more pilots. The solution can be tested in another geography, but what we are looking for is scaling more and creating adoption. The adoption element is an important piece and sometimes overlooked by Life Science companies, especially in a local healthcare setting and making it work.” Jonas, Liva Healthcare.

Building an ecosystem could be a challenge as diverse stakeholders join with different perspectives, missions and problem solving. The challenge could come from a lack of understanding and an agreement of what an ecosystem could look like and what are the steps and milestones to build an impactful one. The other real challenge is going beyond the initial phase and the pilot and having an actual commercial engagement.

You have a different range of different stakeholders with different positionings within that ecosystem kind of nurturing each other and all aligned on a mutual purpose and vision. And for me this is often where the misalignment starts. When we think about building an ecosystem from different stakeholders’ perspectives, these stakeholders bring different realities into the mix and it is interesting as even in this panel we are coming from different realities and if we are on to align of building an ecosystem, first of all, we have to agree on a mutual language and vision.” Farina, Selfapy.

Selfapy, is one of the leading mental health DTx in DACH region. It offers scientifically-proven online therapy courses for mental disorders such as depression and anxiety

To transform healthcare in a meaningful way, healthcare systems, Life Science companies, payors, medtech and innovators have realized that they have to collaborate together as a community and look at digital health as an opportunity to increase the access and quality of healthcare to everyone around the world.

There is a powerful trend to create and orchestrate digital health ecosystems based on many distinct partnerships and 3rd party digital health solutions integration.

BUILDING SUCCESSFUL DIGITAL HEALTH ECOSYSTEMS – MISSION POSSIBLE WITH THE RIGHT APPROACH

Insurtech companies have set excellent examples of building impactful ecosystems that lead to more tailored members experience and better engagement, reduction of cost and ultimately improved health outcomes. They primarily target health plans and self-funded employers. Ecosystems built by Collective Health, Find Care (Walgreen), and One Elevate (Vitality), have reached substantial sizes.

Companies have tried to build digital health ecosystems and most have failed. I see that ecosystem platform or orchestrators will do the job for insurers, pharma or medtech in the future.” Ralf-Gordon, Research2Guidance.

Focus and integration level of these partnerships could vary significantly, as some of the market players provide to their members just a link to a mental health partner or weight loss solution and others have truly integrated 3rd party solutions into their dashboards and their databases. Collective Health, for example, has more than +90 partnerships with digital health companies covering mental health, women’s health, cancer, diabetes, etc…

Is the number of partnerships alone a good metric for success?

What is important to a startup is how to generate adoption. Sometimes there is a misalignment as it is not enough to have your offering, promote it and not care how many people will use it. Our focus is and our mindset is on how many people are using our solution besides having access to it.” Jonas, Liva Healthcare.

Pharma companies partner with digital health innovators and DTx companies to support their pill plus strategies, create a standalone solution to solve a need for a patient, and / or gather data showing adherence, efficacy, and improvement of quality of life that evidence that drug therapy works needed by the health plans. There are different approaches used by Life Science companies.

Biome is a problem led organisation and that is at least the first layer we use to really ensure that there is a match that makes sense. We do not do a lot of competitions or write checks without being backed by a very specific business team that has experienced the challenge that is linked to a critical business objective that we have at Novartis. It is important to create value for Novartis and for our partners. We do care about getting the match right up front, but we care just as much if not more about that later stage of really proving the solution out in a specific context and if that works, scaling it and impacting more healthcare providers and more patients in a positive way.” Jacob, The Novartis Biome.

When it comes to G4A, it scales and supports digital health companies through commercial partnerships and investments. There is an advance track (designed for mature companies) and a growth track (designed for early-mid stage companies), as well as co-investments. It can look at standalone digital health highly scalable digital solutions that can have impact in core areas that Bayer has – women’s health, cardiometabolic disease and mental health.

What everyone on the panel agreed on is that healthcare is local. For example, The Novartis Biome has 15 hubs throughout the world and the team believes in meeting innovators where they are.

Being part of a global ecosystem within healthcare could be challenging. There are a number of different angles and aspects that need to be acknowledged. If one solution is successful in Germany, for example, it does not automatically mean it will be successful in the UK.

All healthcare is local. And in that context, we have to be mindful in Europe of ways to unlock data to make digital actually scalable across the region.” Dominick, G4A.

According to R2G’s team, the global healthcare industry has recognized the benefits of building an ecosystem of digital health solutions to improve population health outcomes and better serve their patients, employees, or health plan members. The pandemic has even imposed the demand for remotely connecting all stakeholders of the healthcare systems via digital tools and services. Yet, there are operational challenges that lead to not so many successful ecosystems.

From an experience working with and supporting established healthcare stakeholders to form their ecosystems, R2G has created an eight-building-block approach to create an impactful digital health ecosystem via partnerships.

The eight building blocks encompass all the important components that a company must consider while forming a successful partnership to build a thriving ecosystem.

  • Value propositionwhat is that one is offering? Besides maybe the initial investment, most of the partnership programs lack the real value proposition that will bring the highest impact.
  • Roadmapwhat is the vision today and tomorrow? It defines the kind of digital health solution to be added at a time (in a wave). The order of solutions should be linked to the expected benefit level and the availability of solutions with corresponding proof of evidence.
  • Matching process – conduct a more targeted and efficient partner search and matching process that is aligned with the value proposition and the roadmap.
  • Playbook – experience captured in a playbook. We have seen insurtech companies capturing in a written manual how to introduce another partnership or test clinics, where new digital solutions are being placed and tested before they are scaled up to a larger member base. We can also see test patient and member panels, whose role is to test the solutions and services before they are launched to a larger database.
  • Governance structurewho is the owner and what are the responsibilities of each team member? Sometimes the governance structure on the incumbents’ side changes and a startup might start to work very efficiently with a team and then when it comes to actual partnership deployment of the digital health solution then the responsibilities have changed and there is a real gap of understanding of the purpose, the vision or other objectives are stepping in, budget is not cleared, etc.
  • Benefits case trackingwhat do we want to get out of the ecosystem and what KPIs will be used to measure and track success?
  • Communication and distribution plan – what will be the educational and communicational activities to increase the awareness of all the digital solutions within the ecosystem and to ultimately scale the usage of these solutions?
  • Technical platform – Ecosystems with a high integration level of the third-party digital health solutions into the core processes of the healthcare company will need a platform to efficiently manage the solutions supporting, e.g., user authentication, data exchange, usage monitoring, or billing.

Digital health ecosystems are high in demand and are being used to drive innovation to the healthcare system.

To build successful and impactful ecosystems all healthcare stakeholders, not only Life Science companies, hospitals, innovators, insurers but also health systems and care teams need to align on a common vision and have the right incentives. If the digital health solutions are not integrated into the clinical workflows it might end in some cases with zero value for the patients or the payor.

A successful healthcare ecosystem is only functional when all stakeholders agree on a mutual purpose and the infrastructure is laid out by the regulatory bodies.” Farina, Selfapy.

Interestingly, today the conversation is still about the digital in healthcare as a standalone thing. The real transformation will happen when naturally digital is part of the care and at the end of the day it is all about healthcare.

At R2G, we would like to Thank our speaker guests for their insights and business cases. We welcome any opportunity to discuss and exchange opinions about innovation and partner integration, actionable market entry strategies and building profitable digital health ecosystems.

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