Digital Health’s Adoption Problem
By now there is hardly a shortage of virtual care offerings in the U.S. and after almost 1.5 years of COVID induced hypergrowth and record venture dollars going to digital health, adoption is the one to crack for early stage companies. “Digital health startups are booming, but their customers are overwhelmed” titled the Washington Post the other day in a piece about the employer healthcare market, and just like in the B2B segments consumers are also inundated and in some cases unable to take advantage of digital health offerings due to lack of access.
While research by McKinsey shows that consumers overall continue to see telehealth as an important modality for their future care needs, this view varies widely depending on the type of care. In a post-COVID world digital health companies will not just compete with one another, but potentially also with in-person care.
Is Hybrid Care the Future?
Will hybrid companies be the ones that win in a post-COVID world? Possibly. We see a lot of companies these days whose offering is designed with the goal to replace in person care. The question though is whether this is what consumers are looking for and hybrid models (digital health + brick&mortar clinic) such as those implemented by femtech companies Tia, Oula or Origin are well positioned to meet patients whatever their online or offline preference at any given time may be.
Tia is “the modern medical home for women”.
Oula is a modern maternity center that combines the best of obstetrics and midwifery care to deliver an evidence-based and personalized pregnancy experience.
Origin is a women’s health platform providing physical therapy and expert guidance for issues specific to the female body
Pharma’s Femtech Shopping Spree
In the past week’s we’ve seen two femtech companies exit to pharma companies.
Alydia Health was acquired by Organon
Ovia Health was acquired by Labcorp
Going forward we will see more and more deals between digital health companies and big pharma. So why are pharma companies interested in partnering with digital health companies in the first place? For one, technology can add a lot of value in terms of revenue growth, product penetration, and cost savings. Secondly the ever growing FOMO among large corporations to miss the boat on “the next big thing” will keep startups top-of-mind. Startups on the other hand can benefit from global distribution networks, relationships and functional expertise (e.g clinical or regulatory). We definitely expect more acquisitions and collaborations between large pharma companies and femtech companies.
