Digital Health & Medical Devices: Star-Crossed Lovers or Can they Complete Each Other?

“Two households, both alike in dignity…”  Shakespeare’s opening lines to Romeo and Juliet

Digital health made its debut on the stage this week at the annual Wilson Sonsini Goodrich Rosati  (WSGR) Medical Device Conference.  In each of this conference’s many prior years, the conference has focused exclusively on the traditional medical device industry, by which I mean devices that doctors would use to treat patients either invasively or non-invasively generally from inside a hospital or at an alternative site of care.  Stents, robotic surgical devices, orthopedic implants,–all of these and more have been the typical WSGR medical device fare.

But strange times make for strange bedfellows, and this is definitely a strange time if you are a medical device traditionalist–reimbursement for medical devices has diminished and the cost of bringing new devices to market has expanded—a deadly combination for the world of medical device innovation.  This dynamic has forced the medical device world—entrepreneurs and investors alike—to think about how to find some new bedfellows among the ranks of the previously unknown/unappreciated/generally disdained health information technology sector.  Despite years of avoidance, the Montagues and the Capulets are now circling each other warily and thinking the other might just be potentially good spouse material after all.

There was an interesting study in contrasts at the WSGR meeting. After a particularly depressing session about investment in the sector where several successful medical device executives talked about how they could not bring their past innovations to market today, Dr. John Simpson, renowned father of many things medical device, stood up and exhorted his colleagues not to lose faith and to redouble efforts to stay in the traditional medical device comfort zone.  He gave a Knute Rockne-style pep talk to the room of 500 or so, reminding them of the great companies of the past and challenging them to keep at the innovation thing and the money will come, damn the odds.  You could almost hear him say, “sometime, when the team is up against it — and the breaks are beating the boys — tell them to go out there with all they got and win just one for the Gipper…”

Simpson’s impassioned soliloquy came on the heels of West Health Institute CEO Joe Smith’s dinner presentation about digital health, which focused on how emerging information technologies have the ability to shake up a healthcare industry desperately in need of shaking if providers, payers and patients are going to work together to make it better.  Dr. Smith is another one who has worked on both sides of the healthcare fence (medtech/infotech) and has joined the emerging population of medical device experts who recognize that healthcare economics are the critical driver of successful future innovation.  During the dinner talk the full spectrum of old school and upstart was present and accounted for, although the digital health crowd was greatly outnumbered and kept to the corners of the room until we took the stage to talk about when and how Romeo and Juliet could live together in peace and maybe even find happiness if only their social networks would stop trying to keep them apart.

As another person who has traipsed around in both sectors—healthcare IT and medical devices—for many years, it is easy for me to see how the medical device world views this marriage as an uneasy alliance.    The medical device world, dominated by physicians and biomedical engineers, has looked at itself largely as “real medicine” and looked upon the healthcare IT world of computer scientists, data engineers and old-fashioned health systems executives from the payer and provider C-suite as somewhat ancillary.    I still have medical device entrepreneurs and executives tell me that cost doesn’t matter when innovation is pure and meaningful.  Ah, those poor lost souls who have forgotten to look up and read the news.

On the other hand, healthcare IT leaders have tended to focus on administrative processes and financial structures and care coordination that improves cost and process engineering, but have not contributed much to real clinical innovation that improves clinical outcome.  The healthcare IT leadership has tended to view medical device innovations as the very thing that increases cost and gives them something to manage without giving appropriate credit to the important role of science in saving patients from pain and suffering.

Both fields suffer from an excess of in-breeding and closed-minded thinking that has weakened the value of each and made it not just desirable, but wise, to look to each other for love if both are to flourish.

Now, in an age of vastly increased data liquidity, expanded access to mobile and cloud technologies, and a system-wide drive to engage consumers while reducing cost and increasing quality at the same time, the bloom may be coming to the rose.  It is an ideal time to foster the marriage of medical device and digital health because together they can make a real difference.  We are already beginning to see the application of information technology to “real medicine” in the form of medical devices like those of Asthmapolis and AliveCor, which might just make a difference in treating and managing the expensive diseases which plague our economy and which haven’t exactly been cured by medical technology of the past.  Predictive analytics and clinical monitoring tools are increasingly able to identify those who really are in need of significant medical intervention and could benefit from advanced medical devices, as well as ongoing methods of care coordination and management.

As a participant in the WSGR panel on digital health, I talked about my experience with one foot in each camp and specifically my observation that the two worlds need each other to ensure optimal outcome not just for patients, but industry.  I think it’s particularly important, in this new age of healthcare economics, to recognize that digital health entrepreneurs tend to approach the market from a perspective of “how do we engage patients and how do we move care down the treatment continuum so it can be less expensive.” On the other hand, medical device entrepreneurs tend to approach the market from a perspective of, “how do we solve unsolved medical problems with science and give providers tools to deliver those solutions.”  These are obviously related perspectives, but the differences between them are worth noting.  Just think how good it could be if we could combine both of those perspectives into one super brain—a perfect example of the whole being greater than the sum of its parts.

One of the questions asked of the panel was whether it is better for (non healthcare) tech people to bring the healthcare industry new solutions or for the medical device world to be in that drivers’ seat.  Clearly, as Dr Milena Adamian of LSAN commented while moderating the digital health panel, we won’t see technologists create the next cardiac rhythm device without physicians, but people like me are seeing non-healthcare experts offering up new products and services to address old healthcare problems every day.  And some of these ideas are pretty darn good.  Of course some of them are silly, but I get silly ideas from all quarters, as do all investors, so it is really ill-advised to dismiss the upstarts and industry outsiders out-of-hand.  Who better to creatively destroy and thus improve an industry than those who are not invested in the status quo?  Plus, these are people who are accustomed to doing a lot with a little capital, something I can’t say for much of the medical device world.

On the other hand, without an intimate understanding of how the very weird healthcare system works, including what clinical information it takes to get doctors comfortable to use products with patients and how to navigate regulatory, reimbursement and clinical evidence-gathering pathways, technologists are going to hit a silicon wall.  They need the insider knowledge of medical device experts to help them really catch a ride on the adoption curve wave or are they are going to end up, Mercutio-style, mortally wounded.

In the end, these previously star-crossed entrepreneurs belong together in the best interests of the next generation of medical products to deliver value to patients. To paraphrase the great philosopher, Jerry Maguire, they complete each other.   It is time for them to proactively seek each other out, in defiance of historical convention, and find the true love that can come from doing well by doing good.