A diagnosis of why digital health startups die–an old (and new) story

click to enlargeFor years now, your Editors have championed integration of data and system interoperability–search on these terms and you’ll find a wealth of articles and views. This Editor also included how data is integrated in patient records as the Fifth Big Question (FBQ) in 2012 [TTA 8 Aug 13]. Many digital health companies, not just startups, have failed at the data integration (and security) tasks, whether with EHRs, hubs, billing and practice management systems or with other devices. (Let us not forget that the initial impetus for Continua back in 2007, the US state/regional HIXs and for HL7 now, was to have common data and interchange standards.)

So there’s no real element of surprise here by John Sung Kim’s pleading in TechCrunch re ‘integrating into legacy systems’ and the troubles his own startup DoctorBase encountered in what he tactfully puts ‘political and technical hurdles’ encountered. But then the velvet gloves come off about EHRs and their less-than-scrupulous idea of ‘partnerships’. DoctorBase landed a customer, a large research hospital, then

The EHR company actually sent a “diplomat” to my office to get an idea of our feature set, then told us that integrations are a long and carefully thought-out process “because of HIPAA.” They then went to the hospital and convinced them that integrating would cost several million dollars, and that it was largely unnecessary, as they were planning on building those same features anyway. What a coincidence.


Another well-established vendor created a partner program under the guise of wanting to disrupt the EHR market (one in which they had significant market share), then later rejected our application because, they said, it was competitive with one of their modules. At least we didn’t have to pay their $10,000+ application review fee.

That rubber duck has a long way to sink. Mr Kim doesn’t quite mention the t-word (and we don’t mean Tunstall) but one can infer that there’s a certain amount of coincidence around certain IP.

Other examples: the Feds didn’t require open APIs for all the money doled out to EHRs under HITECH and MU Stage I. (He also vastly underestimated the number of EHRs out there–the US number was closer to 600 at one point in one of the biggest Quick Buck schemes of the first part of the 2000s.) Mr Kim notes companies that have open APIs like Kareo practice management/EHR software (which acquired DoctorBase after partnering), the Elation EHR and PokitDok, but they are small. (But notably not integrators like Validic)

But the larger point here is that digital health companies have to lift their sights from being sunk in their own technology (which is oh so easy to do) and focus on where and how it can integrate into care coordination as practiced by ACOs, larger practices and (even) hospital systems–and who they have to partner with to make that happen. That is an extremely attractive value proposition for any DH company…and investor. Care Coordination: A Challenge mHealth vendors are choosing to ignore? Hat tip to Dr. Stuart Hochron of PracticeUnite via LinkedIn and Twitter.

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