Digital health since its founding has been far too focused on conditions.
Most of the first cohort of companies that sprouted up did one of two things. They built a “one-size-fits-all” platforms for delivering care online, or they picked a condition with a large enough total addressable market (TAM) to impress investors, like diabetes or heart disease, and built solutions for that.
The end result? Years of so-called “point solutions” with extremely low levels utilization amongst the target population. For a while that didn’t really matter all that much to the bottom line, because buyers (namely self-insured employers and other payers) adopted these solutions anyways. These companies came along at the right time. About a decade ago, a lot of companies were willing to experiment with new ways to bring down cost and improve outcomes for very high cost cohorts. As I’ve written about in the past, we’re now seeing a shift towards outcomes. Employers are culling vendors left and right that do not deliver.
So what am I bullish on now?
Community-based solutions.
Put yourself in the shoes of a patient, and not a business professional.
Every patient knows that they are not a single organ, and they don’t identify by a single condition. I’ll never forget the moment when a friend corrected me early in my journalism career when I described has a “diabetic.” She forcefully, and correctly, told me that she is not a diabetic; she is a “person with diabetes.” Language matters. But her point was far broader than that.
For starters, many people have more than one condition - and sometimes these conditions are linked. In our industry, we sometimes call these “morbidities.” We often see patients with diabetes and depression; menopause and weight gain; heart disease and respiratory disease, to name a few. Sometimes one of these conditions is the root cause of the other. So it never made sense to focus on the condition, and not the person.
I discussed this very topic today with Folx’s CEO Liana Douillet Guzman and Optum Ventures’ founding partner A.G. Breitenstein. Both have been making this point for a while. Folx, if you’re not familiar, is a great example of a community-first company because of the focus on LGBTQ+ health. The core thesis is this: Start with the needs of a group of people, and expand from there.
As we discussed on the call, this community-based approach is actually a strategy that digital health’s biggest brands have been quietly leveraging for decades. People forget that Teladoc, which seems like a “one-size-fits-all” platform, is actually extremely focused on mothers with young kids. That’s a huge percentage of its user base. Likewise, Plushcare, another early telehealth company, built up a huge business selling PrEP to LGBTQ+ users before it sold to Accolade. And there are countless other examples.
In 2024, digital health should fully own this trend. Investors might say that these businesses are “niche,” but they’re wrong. Why? It is better to target a smaller population of users that are highly engaged and cost effective to acquire, versus an extremely broad population that doesn’t know or care that you exist. And people identify with their community far more than they identify with their medical condition.
A qualifying note here: Some community-based digital health companies are also condition focused. That’s because that particular condition lends itself to people wanting to form a community around the management of the disease. A good example of that is NOCD, which was built on the premise that managing OCD is easier when there’s a community of people around who are similarly struggling with the condition. And those people, if you can help them find each other, will remain highly engaged for years to come.
So what am I seeing work with community-based digital health solutions? Well, here’s a few things they all have in common:
Community solutions are more focused on marketing themselves via SEO, high-quality content and earned media, versus paid marketing via Facebook ads. These companies know that brand marketing is going to be more important in the long-run than performance.
There’s investment in online user groups and forums for convening individuals with that condition. It’s both a gift to the community - because people need people - but it’s also a way to keep customer acquisition costs low.
There’s a maniacal focus on the user and their needs, versus what their condition(s) might be. In fact, I’ve seen companies swiftly move from starting with one condition - say primary care - and float to others where the patient has a clear need. In these cases, I’ve seen companies take both a “build or buy” approach, as well as partnerships. Midi, for instance, just announced a partnership because people with menopause will also often suffer from MSK—related issues.
They’re not rushing to tout AI just because it’s the hot new thing. These businesses are built off of human connection at their very core, and they’re not going to disrupt that if it’s not carefully thought through.
The founders tend to have lived experience, or they can relate to the need or problem facing that community in some way. The smart ones are being more vocal about that via their own social channels because they know it’s an important way to build trust with their population.
So that’s where I’m at. Community is going to be more important than ever.
Relatedly, I’ve long been frustrated - as have many of my physician friends - with the way that specialists in this country are compensated to focus on their one condition or one organ, versus delivering care in a far more holistic manner.
Digital health has an opportunity to do that differently. Instead of building solutions that deliver a minor convenience to someone; we could be building solutions that completely change an individual or populations’ health trajectory. So let’s do that instead.
What are your favorite examples of community-based digital health solutions? You know I always love to hear from you. Reach me at [email protected].