DIGITAL HEALTHRecommendations for a sustainable

transformationApril 2019

2DIGITAL HEALTH

Recommendations for a sustainable transformation

#1Digital health promises

INTRODUCTION

Digital technologies, without a doubt, bring great value to the healthcare sector and their use is

a hot topic in the industry. “Transformation”, “revolution”, and “disruption of traditional care

pathways” are all words that come to mind.

Relying on its promised potential, investments in innovative digital health projects have exploded

in the past five years. Yet, few solutions have managed to find their market, and huge successes

are rare. France must address this challenge, from a regulatory, legislative, and economic

perspective.

In this publication, we highlight obstacles to the development of digital health in France and

propose recommendations for its sustainable development in the French territory.

Digital health is defined as "the application of

Information and Communication Technologies (ICT) to

the field of health and well-being"1. Under the guise

of a health transformation promise and more

generally of the patients’ care transformation,

digital health occupies an ever more prominent place

in today’s debates. It has gradually become an

unavoidable topic as it addresses several issues:

patient empowerment, P4 medicine* development,

homogeneization of the access to care... It impacts

the entire health ecosystem from pharmaceutical

industries to public authorities, health professionals to

patients, who are at the heart of this turmoil.

Digital health is a breeding ground for innovation.

Many development projects have been conducted

due to the significant investments. The total amount

of digital health investments has annually

increased by more than 30% since 2011, and the

number of deals has been multiplied by 3 [A].

INTERNATIONAL FUNDING DYNAMICS OF DIGITAL HEALTH2

Fundingamount (M$)

Number of deals

A

* Predictive, Preventive, Personalized, Participative

The place of France in this ecosystem remains minor.

The amount of funding in digital health reached

€395M in 20173. However, examples like Doctolib

or Alan (see following pages) are genuine successes

for new entrants in the digital health sector. They are

the main drivers of this transformation.

Giants of the tech industry have also seized

digital health. GAFAM(*) and BATX(*) have massively

invested billions of dollars to transform the way care

is provided or financed4. They have also

approached French players several times. For

example, Sanofi and Google have been working on

new solutions for diabetic patients, leading to the

creation of a dedicated joint venture: Onduo.

Perceived as a serious threat to historical healthcare

players, tech giants bring unprecedented breadth to

digital health internationally. They are also pushing

European and French players to "ramp up" on the

digital issue in the broad sense, in order to protect

their sovereignty.

As a result, market estimates for digital health are

optimistic. For example, Roland Berger recently

published a quantitative analysis of the digital

health market estimated at $79 billion in 2015 and

$206 billion in 2020, which represents an annual

growth rate of 21%5. These figures encourage both

innovators and investors to take on the challenge of

digital health.

FACTORS OF DYNAMIC IN DIGITAL HEALTH

B Technological development

(algorithms, computing power,

sensors, medical devices ...)

Increasing adoption of

digital by professionals

and patients

Unprecedented increase of

health expenditures

Need for life course and patient

experiences improvement

Willingness to develop an

egalitarian care system

Several factors explain this spectacular dynamic.

Health spending is exploding at a global scale and

is an increasingly important part of GDP, especially

in the most developed countries. Due to this

challenging financial context, many countries seek to

optimize the system of care without compromising its

quality, turning to new solutions such as digital

health.

Technological maturity (algorithms, computing

infrastructures, sensors, medical devices, etc.) is also

a strong factor. This technological expansion has

gradually democratized the use of digital health

solutions for patients and professionals, but much

remains to be done.

For example, the Villani report published in 2018

states, "AI opens up new opportunities for constant

innovation in French pharmacopeia by building

diagnosis and therapeutic strategies that are more

adapted to the patient's needs, environment and way

of life."6

* GAFAM : Google, Amazon, Facebook, Apple, Microsoft

* BATX: Baidu, Alibaba, Tencent, Xiaomi

3DIGITAL HEALTH

Recommendations for a sustainable transformation

#2Major constraints

Digital health also promises to provide equal access

to care by contributing to the creation of a

sustainable offer for all. Finally, it allows the

imagination of higher quality but less traumatic life

paths and experiences. This is true for both patients

and caregivers.

These five development factors [B] explain the

dynamics of digital health and respond to strong

public health and medico-economic challenges. The

clinical situations that can benefit from digital

contributions are abundant. All stakeholders in the

ecosystem are impacted by these benefits.

Need and demand are noticeably two different

things. Despite many relevant initiatives, the

promised digital "disruption" of healthcare struggles

to take shape. One of the best indicators of this

inertia is the small number of start-ups that have

developed an autonomous and sustainable activity

by offering digital services to the health ecosystem.

Many stakeholders hope that we will soon stop

referring to "digital health" but simply to health, the

same way we stopped talking about "digital phone"

or "digital camera". Nevertheless, there is a long

way to go before imagining a large-scale adoption.

Five constraints limit the development of digital

health despite positive and encouraging signals.

The "gadget" effect

The first of these constraints is related to the very

nature of services delivered. Many digital solutions

have been identified (sometimes rightfully) as a

"gadget" without a real calling.

This feeling, shared by both professionals and users,

raises many doubts as to the usefulness and

establishment of an actual service provided by

digital technology. The absence of a label and less

stringent controls than for health products (medical

devices or drugs) reinforce this impression.

The proliferation of solutions contributes to this

"rough" aspect of the digital health ecosystem. For

example, of the more than 300,000 mobile health

apps available today, the vast majority are services

targeting consumers with no proven medical

benefits7. For such services, the risk of "gadget"

effect is greater.

Technological focus

The second constraint relies in solutions themselves.

The exponential development of increasingly

accurate sensors or ever more efficient algorithms

push those who innovate to develop solutions with

substantial technological components.

Doctolib is the European leader in online and mobile

booking. The company raised €61M in 2017, the

record of the year in Europe. The service brings

together 45,000 healthcare professionals, 800

partner institutions and 16 million visitors per month

in France and Germany.

In July 2018, Doctolib announced the acquisition of

the platform MonDocteur and became a pioneer of

the digital health market concentration in Europe. In

March 2019, it becomes a French unicorn, joining the

select club formed by Vente-Privée, Blablacar and

Deezer.

4DIGITAL HEALTH

Recommendations for a sustainable transformation

These developments are sometimes made at the

expense of a real understanding of future

prescribers’ or users’ needs and expectations. Such

solutions rarely meet their market and, when they do,

it is very often short-lived. While France can boast

about having developed a dense network of

technically innovative start-ups, profitability remains

a fiction for almost all of them.

The partitioning of expertise

The third constraint is related to a difference in

perception and agility between healthcare

companies and digital start-ups. These differences

can be observed at different levels, such as the

development schedule. Developing a new therapy

takes between 10 and 20 years and costs between

1 and 2 billion Euros**. This data shows a glaring

discrepancy with digital solutions, which are much

less expensive and more agile. In addition, where a

drug is developed in a linear fashion once the

candidate is identified, developing and updating a

digital solution is iterative. The regulatory

environment, as it is built today, also poses many

constraints in terms of evaluation and timing. This

calendar is often impossible to follow for a start-up

that must quickly test and prototype a solution in its

market.

The difference of perception is finally observed on

the economic level. From the laboratory’s point-of-

view, sales of digital solutions cannot be as high as

those generated by a “blockbuster” molecule.

The lack of substantial evidence

A fourth major constraint is the ability to demonstrate

the positive impact of the use of such solutions, and

this is critical. Due to remaining doubts and the slow

adoption of digital health, companies operating in

this area struggle to demonstrate through clinical

studies the benefits of their solutions.

A digital health solution will be considered as a

medical device. It is therefore imperative to

anticipate a research and development effort similar

to the standards of this industry and not to that of

mass consumption. These standards lead to long and

costly studies which require specific expertise.

The absence of payers

The fifth and final constraint to the development of

digital health solutions is the absence of clearly

identified payers. Initiatives that have successfully

taken steps to support a public health system are

rare. Those who rely on a model where the patient

pays out of pocket access to the digital service are

even more so. This is particularly true in France

where it is difficult to imagine paying for prevention-

oriented solutions. In addition, many initiatives are

offered for free and are essentially unprofitable.

The main payers who are ready today to invest in

these solutions are either private ones (insurance,

mutuals, ...) or the patient himself. Encouraging

signals showing a willingness to publicly support

digital solutions in telemedicine have, however, been

expressed. The question about who pays for these

solutions is essential and determines the definition

of a sustainable and autonomous economic model.

** Depending on the actual cost of new molecule development, the order of

magnitude of the Bn€ is globally accepted.

Alan is a digital health insurance start-up. In 2018,

the company raised € 23 million.

Alan's proposal is to significantly simplify health

insurance contracts for employers and the self-

employed. One of the major aspects of this

transformation is the 100% digitization of services

for beneficiaries.

5DIGITAL HEALTH

Recommendations for a sustainable transformation

Digital health is a great driver of innovation and

improvement in the supply of care. The full

development of this transformation can only be

achieved on the ground by allowing players from this

ecosystem (from start-ups to large groups) to better

integrate, accelerate their development and

imagine innovative business models. 3 key pillars

of particular interest can be imagined. [C]

#3At the dawn of a new era for healthcare

PILLAR 1: Digital awareness forhealth purposes

The use of digital health represents an excessively

wide range of solutions that may have very different

goals. The "gadget" effect that is often pointed out

undermines the credibility of health solutions in the

strict sense. It is imperative to consider digital as a

vector of genuine health benefits and not as an

accessory. Such benefits will be more easily

demonstrated in medical contexts rather than in

mainstream prevention. Once digital health is proven

to be useful and effective in such environments, it will

be easier to generalize it for everyone. Beginning

by demonstrating the impact of digital health on

patients and in a clinical context is key for its

gradual adoption.

Professionals (doctors, pharmacists, nurses, ...) have a

key role in the credibility of digital technologies in

the hospital but also in community medicine. Their

involvement is a key success factor to the

development of digital health. Healthcare

professionals must be enlisted at two levels:

– The first level is contribution (alongside

patients) to the development or validation

of the solution.

– The second is involvement in the business

model to facilitate market buy-in.

Getting the support of physicians and taking the

input of pharmacists into account are key levers for

legitimizing digital health. It is a way of

demonstrating its greater potential and a way of

obtaining the acceptance of all relevant

stakeholders. The development of specific labels to

build legitimacy is another key lever.

WeHealth by Servier is the digital health entity of

the pharmaceutical company Servier.

This agile structure aims to develop operational

partnerships with start-ups to bring products and

services to the patient. Examples of WeHealth by

Servier’s partners include Bioserenity, Deeplink

Medical and Cardiorenal.

6DIGITAL HEALTH

Recommendations for a sustainable transformation

PILLAR 2: Valuing data in businessmodels

A connected medical device or a mobile application

would not create, on their own, the full value of

digital health. The value lies also in the analysis of

aggregated data that allows to draw conclusions.

Although today this value is poorly captured, it will

play a vital role in future business models. What will

this role be? And who will be leading this revolution?

A first lever deals with the education of

stakeholders on the value of data. For many of

them, data is difficult to value as an intangible asset.

However, this data makes it possible to optimize the

management of patients and the healthcare system

overall. It makes it possible to identify the warning

signs of a biological or physiological drift and to

better anticipate its consequences. It is also the data

which, in large quantities, makes it possible to

improve the predictive power of the solutions as a

whole.

Even if "prevention is better than treatment", it is

difficult to demonstrate the medical and economic

potential of a preventive approach based on a

digital technology. This is even more relevant in a

country like France, where treatment is covered by

the national healthcare system, while preventive care

may be paid out-of-pocket by patients & consumers.

The payer is an essential stakeholder in

demonstrating the value of digital health. His

absence can be fatal. Without this demonstration, it

is unlikely that the proposed solutions will fit into a

care pathway. It is even less likely that they will get

supported by public payers in the same way a drug,

a pacemaker or a laboratory assay are.

Therefore, it is imperative to use the data not as a

means of monetizing information, but as a tool to

demonstrate the interest of the solution from

clinical and health economics standpoints.

The second lever is to engage a payer by using the

intrinsic value of the data as an incentivize. In 2018,

the main players who are approached to take

charge of digital health solutions are those from

insurance and mutualist companies. These

organizations will be able (and willing) to support all

digital health solutions only if they have a sufficient

level of evidence. These first steps are important.

They must be able to generate irrefutable evidence

of the viability of digital health from all

perspectives: patients, professionals and payers. In

the long term, we can imagine care pathways where

digital technology has its role to play, with public

financial support for all or part of this unique

medicine called P4.

The value of digital health lies in the savings

generated from better patients’ care. This value is

difficult to assess today. Nevertheless, it is based on

this economy that all stakeholders (start-ups,

pharmaceutical companies, payers, healthcare

professionals and patients) can ultimately be paid.

The case of Withings / Nokia Health is emblematic

of the unstable situation of digital consumer health.

Withings was bought by Nokia in 2016. In March

2018, the digital health industry is looking for a

new buyer as it has not kept its promises in terms of

sales. Nokia is not a start-up but expresses through

this brief experience the lack of maturity of a

business model based on the consumer.

Today, Withings came back to its French founder,

Eric Careel, and is strongly refocusing its strategy on

healthcare, with appropriate features.

7DIGITAL HEALTH

Recommendations for a sustainable transformation

PILLAR 3: Facilitate the development and implementation of solutions

Rapid implementation of field solutions among users

is fundamental to demonstrate the value of a digital

health offer.

A first lever is to break silos of expertise. A start-up

or a digital group needs skills of a pharmaceutical

or medical device company. These skills help identify

clinical, regulatory and R&D issues specific to the

health sector. It is also an opportunity to unlock ways

to support development. Conversely, this laboratory

needs the ideas, the agility, the objectivity of the

digital players. In addition, digital technology skills

are rarely held internally. Building a virtuous and

open ecosystem is key. In France, the WeHealth by

Servier initiative illustrates the virtue of bringing

major groups and players together in order to boost

the digital health sector. The 39BIS laboratory of

Sanofi illustrates another model of integration.

It is essential to develop these de-

compartmentalization efforts in France in order to

accelerate the digital transition.

Leveraging regulation is also key. This is essential for

digital health. It ensures the security of the data and

the integrity of the stakeholder (patient or

professional). In Europe and France, particular

attention is paid to the protection of citizens and

their medical data. This is a major issue. Digital

health, however, requires more flexibility and

confidence in our ability to innovate ethically and

with respect for the individual. Since data is the

driving force behind digital innovation, facilitating

access to data is mandatory in this context. The

example of the FDA Pre-Certification Pilot Program

is an encouraging signal in line with registration

procedures’ simplification for such digital devices. It

allows notably a kind of supplier’s approval rather

than an evaluation of each version or evolution of

the solution subject to approval.

3 AREAS OF WORK AND 6 LEVERS TO BUILD A MODEL OF SUSTAINABLE ACTIVITY IN DIGITAL HEALTH

C

3

Educate patients, professionals and institutions about the role of data

Anchor data in business models

VALUE CREATION AROUND THE DATA

2

Break silos between digital and healthexpertise

Streamline the regulation procedures of digital solutions

ACCELERATION OF PROOF-OF-CONCEPT STUDIES AND DEMONSTRATIONS OF VALUE

1

Mobilize health professionals in development and dissemination

INTEGRATION OF DIGITAL HEALTH IN A CARE JOURNEY

Start by demonstrating a benefit in a medical context

AREAS OF WORK LEVERS OF DEVELOPMENT

8DIGITAL HEALTH

Recommendations for a sustainable transformation

D DIGITAL HEALTH IS EVERYONE’S CONCERN

Start-up Bring digital skills, flexibility and agility are mandatory

Laboratories Bring clinical and regulatory skills and help funding innovation

Private payers Trigger tangible demonstration of digital health solutions’ value

Public payersIntegrate proven digital health solutions into care pathways andsupport them financially

Regulatory

authorities

Provide a flexible legal and ethical framework for quick proofs ofconcept

Care giversApprove and/or recommend digital health solutions by participatingin their development and democratization

PharmacistsAct as the patient's main point of contact for digital health and themain channel for solutions’ deployment

CONCLUSIONSDigital health is an essential part of the 21st century’s public health and its promises have not yet

been fulfilled. Despite significant efforts, France has not made great strides in this field. To do so,

incremental projects that concretely and sustainably improve the quality and effectiveness of the

health system need to be conducted.

To make promises of digital health meet reality, 3 areas of work must be reinforced: raise

awareness among healthcare professionals, allow rapid implementation of solutions, and push

data as the key component of business models.

Sustainable digital transformation of health is everyone's concern: pooling skills, financial

participation, and regulatory simplification are as crucial as digital innovation. [D]

Patients Seize digital health to take on new responsibilities for care

9DIGITAL HEALTH

Recommendations for a sustainable transformation

ALCIMED (www.alcimed.com) is a consulting company specialized ininnovation and new business development. ALCIMED worksextensively for the life sciences industry (healthcare, food/feed),chemistry, energy, aerospace, defense, and public policies.

Within ALCIMED, Highway to Health (H2H) is an initiative which hasthe ambition to understand and analyze the challenges of the healthdigital transformation in terms of technology and market.

PLEASE FEEL FREE TO GET IN TOUCH WITH US FOR

ANY QUESTION OR COMMENT

Jérôme SEON

Director ALCIMED Lyon

+33 (0)4 37 48 22 09

Jerome.seon@alcimed.com

Benjamin D’HONT

Great explorer in digital health

+33 (0)6 83 68 06 46

Benjamin.dhont@alcimed.com

This publication has been written with the purpose of sharing general orientations. We invite the reader to rely onspecific support before making strategic decisions. ALCIMED can not be held responsible for the consequencesrelated to the use of the information contained in this publication.

SOURCES

[1] La e-santé, bibliographie thématique, IRDES, March 2018 (source OMS), (link)

[2] Rapport, StartUp Health, 2018 (link)

[3] Baromètre EY du capital-risque en France, 2017 (link)

[4] Google, Amazon, Facebook, Apple : quels sont leurs projets dans la santé ? , Usine Digitale, Février 2018

[5] Roland Berger, Digital and disrupted: all change for healthcare, Sept 2016

[6] Rapport Villani, Focus 2 - La santé à l’heure de l’IA, 2018 (link)

[7] Prescribable mHealth apps identified from an overview of systematic reviews, npj Digital Medecine, May 2018