In the midst of the horrors of a global pandemic, it happened: digital health exploded. The urgency of the COVID crisis presented a unique opportunity to drive innovation in pensions. However, if we are not careful, we will miss this opportunity.
Policymakers made telemedicine accessible and encouraged the integration of artificial intelligence (AI) into medical devices. Governments have spent billions to make at-home COVID testing accessible. The US alone committed $47.8 billion to implement a national at-home COVID testing strategy, including improvements in data sharing and diagnostics — about $143 per person. Health care administrators embraced the situation and introduced cost-saving digital enhancements that accelerated home care and improved detection of chronic diseases, the leading cause of death and costs in the US
It was a rare “Marshall Plan moment” to rebuild healthcare in a more affordable, efficient, and humane way. However, our industry risks missing this opportunity if we don’t change our discourse and stop exaggerating what our technology can do. Tech entrepreneurs who claim that the post-COVID era is the time to be “disruptors” by blasting the system as we know it and replacing it with something completely different are doing healthcare a huge disservice.
Adopting the Silicon Valley culture from “move fast and break things‘ There will be costs in healthcare that we cannot bear. It will affect patient health and safety, threaten hospital resilience and threaten regulators’ confidence.
Elizabeth Holmes’ 11-year prison sentence is a grim reminder of the devastating impact the “disruption” hype can have on healthcare.
We can’t afford to go back. Almost one in four Americans skips medical care because of the cost. Healthcare spending accounts for 20% of US GDP and is expected to continue to rise. Persistent inflation will only exacerbate the problem. The current situation is unsustainable.
Paradoxically, the very promises of the digital health boom are undermining its future. Many public companies that were recently valued in the billions are now trading for pennies on the dollar. They have overpromised and underdelivered, squandered billions earmarked for improving patient care and jeopardized already tenuous confidence from regulators and investors.
Media frenzy compounded the problem as journalists peddled the tale of health-tech unicorns and private companies with “breakthrough” products to transform healthcare as we know it.
We’ve been here before. Some may remember the early predictions that AI would replace doctors. In 2014 IBM announced that its Watson system would revolutionize cancer treatment. Under the hood, his AI had trouble even distinguishing between different types of cancer. In 2016, AI pioneer Geoffrey Hinton proclaimed that radiologists would be obsolete in a few years. In both cases, the work is still preliminary, and experts say it will be years before such solutions materialize.
If exaggeration is bad for confidence, open deception is fatal. At the height of the Theranos hype in 2014, Elizabeth Holmes falsely claimed that her $10 billion company could perform hundreds of tests on a single drop of blood. Back then, investors pushed me to make my own startup “more like Theranos.” Just two years later, they asked me to prove that we weren’t like Theranos!
The damage done to the industry was immeasurable. Shocked and disappointed, venture capital firms opted for ‘safer’ sectors. Regulators stopped approvals. Years of investments were lost over the crimes of a Stanford grad.
In the wake of COVID, massive government investment and new regulatory initiatives made 2021 a record year for digital health, with private funding rounds reaching nearly $30 billion in the US alone. However, 2022 saw a precipitous drop in funding and valuations. Blaming the economic downturn is not a sufficient explanation when in fact digital health has suffered more than other tech sectors.
When done right and built on clinical-grade innovation alongside medical verification protocols, digital health is deflationary and can be more resilient to market trends. The next generation of companies must be built to last. To do that, we need to have an honest conversation about what innovation can and can’t do. Otherwise, we will wake up in five years and have spent hundreds of billions with no real value or clinical impact to prove.
Instead of talking about disruption, we need to talk about collaboration. Rather than promising a panacea, we must innovate that support sustainable, systemic progress, particularly on mass population health challenges. Above all, we must listen: let our decisions be guided by the expertise of doctors and healthcare administrators and the needs of patients, rather than anticipating ourselves.
Yonatan Adiri is the founder and CEO of Healthy.io. In July, the company received FDA approval for its smartphone-powered home kidney test.
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