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August 23, 2022 // Julia Palomino  //       //  Opinion

Insiders vs. Outsiders: Who’s Best Positioned to Reimagine Health Tech?

The pandemic triggered seismic shifts across healthcare among them, a health tech funding gold rush. Flaws in care delivery and system inequities were laid bare, allowing the market to welcome technological solutions. As a proof point, health tech investment dollars soared by 157% from 2020 to 2021, totaling $29.1B in 2021 alone.

What did those dollars fund? Those companies that Rock Health Consulting calls “healthcare’s new guard”. Companies who had never touched healthcare zeroed in. In 2021, Goldman Sachs acquired a national network of primary care physicians, Walmart jumpstarted in-store clinics, and Dollar General named a chief medical officer. A former CEO sat trial for the jaw-dropping rise and fall of her health tech startup Theranos, pushing healthcare newcomers into the national spotlight and increasing pressure to prove claims about health technology. 

And 2022 has ushered even more newcomers into health tech. Amazon is acquiring One Medical for nearly $4 billion and TikTok’s parent company just purchased a hospital chain in China for $1.5 billion. 

As part of our recent survey of the space, the Allison+Partners team interviewed health tech leaders, and among other things, we asked them about the contributions of both this rush of healthcare “outsiders” and the “insiders” who remain core to the industry. 

The founder and CEO of a healthcare automation company hit the nail on the head: “Pre-pandemic, it was hard for outsiders to play a role in healthcare innovation. Now, leadership has woken up to the fact that healthcare needs to modernize and is looking for proven brands in other sectors to help.” 

Experts and newcomers both bring value to the table, and intentional collaboration will capitalize on the recent momentum from the pandemic and help deliver positive experiences for healthcare’s end users—patients. 

Insiders benefit from outsiders’ tech expertise and product experience 

Healthcare’s long been known for cryptic jargon, siloed information, and barriers to access. But our research reflects a health tech evolution during the pandemic. Sixty-six percent of survey respondents rated the healthcare consumer experience “above average” compared to other industries. This “COVID-19 technology acceptance curve” has sparked wider adoption of tech-based innovation. 

A healthcare partner at a venture capital firm focusing on health tech explained, “The patient experience is entirely broken. But the consumer space does the customer journey so well. Now those leaders are entering healthcare with tested solutions.” He noted that they often see success when healthcare entrepreneurs with valuable D2C product experience work alongside seasoned industry talent. 

Our research also showed that 57 percent of survey respondents believe Health 4.0 – an ideal future state in which technology connects our currently fragmented system and clears the path for a seamless patient experience – could be achieved in the next 3-5 years. Healthcare “outsiders” can help achieve this vision with their technology expertise. 

Outsiders further this vision of interconnected tech by empowering data analytics. Predictive analytics, big data, and artificial intelligence in healthcare have picked up speed in recent years, as powerhouses like Alphabet, Amazon, Apple, and Microsoft join healthcare incumbents in seeking solutions to the industry’s data headaches. Though collected in large quantities, healthcare data—fragmented among departments inside siloed health systems—can be difficult to access and analyze. Tech specialists are now leveraging insights to provide customized experiences like those consumers already encounter when they search a streaming platform or shop online.  

A pharmacy benefit manager (PBM) executive shared in our interview that his organization developed a converged data platform with Amazon. This helped the PBM scale their platform and mine deeper data insights, while also protecting its data stores.  

Outsiders need context and insight from insiders to thrive in healthcare 

Our research revealed three primary barriers to Health 4.0 that newcomers to the industry need help navigating: strict legislative regulatory policies, lack of healthcare-specific tech talent, and limited understanding of advanced health tech.  

Anyone working in healthcare knows that change happens slowly. The strict regulations come from a decades-long entanglement of public and private sectors, and healthcare insiders offer invaluable input about navigating this ecosystem. 

They understand when to push boundaries and when to slow down to avoid breaking things. They have a realistic perspective of the system’s pace and institutional knowledge of regulations. They know many healthcare startups fail, losing fuel on the long journey to prove efficacy and hemorrhaging revenue along the way.  

And expertise will always matter. Yes, the path to the doctor’s door can be simplified, but building tech without clear purpose and understanding of key industry issues is counterproductive. As a leader at a precision medicine imaging company put it, “The question is, what do you deliver? What is the quality process? [Does] the product you deliver address a genuine healthcare need?” 

One final note here. The moments between a physician and patient are sacred – with no true parallels in any industry. Innovations in biopharmaceuticals, devices, and diagnostics can enhance the journey, but experienced specialists have a meaningful leg up on the newcomers offering these solutions who are still gaining knowledge.  

Reimagining the future together 

As the health tech field brims with new possibilities, achieving Health 4.0 in the next few years—as many of our survey respondents indicated is realistic—will only be possible through collaboration. Outsiders and insiders working together to reimagine healthcare’s potential will maximize change, weaving health tech offerings into a more inter-connected future.  

Download our report here to learn more about the findings from A+P’s research, as well as how health tech innovators and storytellers can best navigate today’s opportunities and challenges, which are often two sides of the same coin. 

Julia Palomino is an Account Executive based in Washington, D.C. where she supports teams through in-depth writing, content strategy, and thought leadership development.

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