Omada Health

The accelerated (and accelerating) development of digital health technology, coupled with large scale shifts across the industry over the last decade, marks the dawn of a new era in healthcare. Innovation-especially for enterprise and health plans- has the potential to radically transform the patient experience, coordinating care and adding opportunities to keep individuals engaged in managing their own health. In some cases, this is already happening. Newer companies delivering these solutions, and working with (and through) large organizations, bring a fresh perspective to an industry that for too long, has been dominated by incumbents.

But every disruptive promise has its pitfalls, and attempts to “disrupt” the healthcare system without taking into account the reasons for its complicated structure are ultimately fool’s errands. In order for new technologies to fit into the innate constraints of today’s reality, companies need to be just as creative and innovative on the “how” of operations as they are naturally with the “what” of technology.

While digital health has already wrought advancements across the care delivery system, a near-exclusive focus on the types of technological innovation that have previously worked in industries like hospitality and transportation has obscured the fundamental role of another type of modernization just as, if not more, necessary to make digital health work: operational innovation.

"Every disruptive promise has its pitfalls, and attempts to “disrupt” the healthcare system without taking into account the reasons for its complicated structure are ultimately fool’s errands"

Technology companies have sometimes been accused of falling victim to “bright-shiny-object syndrome,” and digital health is not exempt. The temptation for companies to adopt the sleek tools and packaging, and to export trends from other consumer-facing industries is strong. These types of innovation are most visible, and tend to gain the most recognition. It’s easy to explain to a reporter or an investor how your new intake screen incorporates learning from the latest iOS SDKs; it’s even easier to show the same user experience to a potential client and blow them away in a pitch meeting.

But none of that matters if the digital health company can’t fit its technology into the healthcare industry’s existing IT, regulatory, organizational, and process frameworks. This requires that your organization become a first-principles expert in which aspects of the system are malleable, and which are not. That’s a prerequisite before you can build the right technology and process adaptors, fitting into today’s system to drive scale and impact.

In an industry as complex as healthcare, the impact and success of technological innovation is contingent on the difficult, back-end, and much less visible operational work. Below, I’ve outlined two key areas where operational innovation will significantly enhance the chances of thriving in a complex industry.

Integrating New and Old Systems

Many of the systems in healthcare were built decades ago, and most health plan or enterprise customers have intricate mazes of multiple systems that work carefully together- even if the design of the overall system may not seem logical. It’s not uncommon for a payer, for instance, to have more than one claims billing system (often because of M&A history). It’s equally common to experience unique and custom data systems for the simplest things (such as member or patient eligibility files). Payers or employers may have hard requirements for how they can and cannot accept data, or unique processes for being able to transmit it. Through all of this, digital health companies have to invest in building all the requisite connections so that systems talk to each other effectively.

When executed properly, this enables data transfer to power actionable care, value-based billing models, and easy consumer experiences where the Rube Goldberg machine of back-end connections exists entirely behind the scenes, and the user experience remains seamless. Successful enterprise digital health companies designing solutions for individuals will incorporate user-centric design while also ensuring that collected data is delivered to providers or plans as actionable information. That systems-connecting work is operational innovation at its core.

Working Within Existing Contracting and Regulatory Frameworks

The newest generation of health care technologies are also blurring the lines between software vendors, providers, medical devices, services, and therapeutics. At these intersections are some of the most innovative and interesting technologies in health care.

Yet existing payers, providers, and employers are not used to contracting with entities that cross borders; understandable, today’s regulatory environment isn’t necessary suited for these intersections either. Rather than wait for the world to change, it behooves next era digital health companies to drive it.

Digital health companies- like Omada- can typically contract as a provider, given that we operate as a HIPAA covered entity. But this standing is dependent on a long-standing investment in regulatory analysis and compliance. Health plans are right skeptical of this unusual formulation, and digital health companies must accept the burden of offering a full guide and support to educate payers on their standing within contracting and regulatory structures they are accustomed to. We tend to share our experience with other payers in the early stages of contracting, and ensure that we do everything in our power to simplify the contracting process, while sticking to our first principles.

Digital health companies must also do the difficult work to create compliance processes, regulatory viewpoints, and supporting operational principles so they can fit elegantly into existing mental models and frameworks. Doing this right will ensure they can hit scale using existing systems, and make life easier for your customers.

In time, new models will form that make operational life a bit easier for digital health innovators. But this will take many years. Until then, it’s important to pay just as much attention to your operational innovation as your technological innovation. It’s what will move the industry forward and ensure that digital health will have impact that lives up to its promise.

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