Health Care Platforms Need a Strategy Overhaul
To succeed, digital health platforms must shift their approach in three key areas.
Jon Krause
The market for digital health services is growing rapidly. Worth more than $175 billion globally in 2022, it is expected to have a compound annual growth rate of 27% until 2030.1 Digital health services are provisioned over platforms that match patients with medical professionals while integrating artificial intelligence, telemedicine, and data analytics to improve the efficiency and effectiveness of health care delivery. Despite attracting both users and venture capital (with $45 billion in funding in 2021 alone), digital health platforms struggle to match the success of other platform businesses, with many failing to achieve profitability.2
Health care around the world is beset by major challenges, including increased demand for services, barriers to access for marginalized groups, and growth in health care expenditures as a proportion of gross domestic product (accounting for 18.3% of GDP in the U.S. in 2021).3 According to the U.S. Food and Drug Administration, digital health platforms can help address these challenges and more.4
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Yet many digital health platforms struggle with viability. Our research on emerging digital health platforms during the past four years illuminates the unique challenges they face. Unlike many other types of platforms, they must integrate with incumbent solutions in a largely physical health care system, rarely benefit from strong network effects, and, due to tight regulations, often struggle to exert influence in ecosystem orchestration.
References
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