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Emerging Business Models in Digital Health, Fall 2022, University of St.Gallen

Q1 2022 Digital Health Funding Reaches $6B Across 183 Deals (Rock Health, 2022), The promise of the metaverse in cardiovascular health (European Heart Journal, 2022), Can Virtual Reality Help Ease Chronic Pain? (The New York Times Magazine, 2022), First of its Kind Alexa Experience Provides Hands‐Free Access at Home to General Medical Care (GlobeNewswire, 2022), Can digital technologies improve health? (The Lancet, 2021), Predictive analytics and tailored interventions improve clinical outcomes (npj Digital Medicine, 2021)

What are the business models behind the recent developments in the field of digital health?

In the 20th century, healthcare systems specialized in acute care. In the 21st century, we now face the challenge of dealing with the specific characteristics of non‐communicable diseases (NCDs), including common mental disorders. NCDs are responsible for around 70% of all deaths worldwide and 85% of all deaths in Europe and are associated with an estimated economic loss of $7 trillion between 2011 and 2025. Chronic and mental diseases are characterized in particular by the fact that they require an intervention paradigm that focuses on prevention and lifestyle change. Lifestyle (e.g., diet, physical activity, tobacco, or alcohol consumption) can reduce the risk of suffering from a chronic condition or, if already present, its burden. A corresponding change in lifestyle is, however, only implemented by a fraction of those affected, partly because of missing or inadequate interventions or health literacy and partly due to socio‐cultural influences. Individual personal coaching of these individuals is neither scalable nor financially sustainable.

To this end, the question arises of how the business models of companies look like that offer digital health services that address these challenges. Digital health services rely on information and communication technologies (e.g., smartphones, wearables, digital biomarkers, conversational agents, voice assistants, artificial intelligence) for the prevention and treatment of diseases in our everyday lives. They also allow medical doctors and other caregivers to scale and tailor long‐term treatments to individuals in need. At the intersection of health economics, behavioral medicine, business informatics, and computer science, this lecture aims to help students and upcoming healthcare executives interested in the multi‐disciplinary field of digital health to understand better business models of top‐funded companies that offer digital health services.

The following topics are covered in this lecture to reach the learning objectives:

  1. Introduction to business models in digital health
  2. Specifics of business models in digital health
  3. Identification of top‐funded digital health companies
  4. Systematic assessment of the business models of digital health companies

Course Structure

The lecture is structured in two parts. In the first part, students will learn key aspects of business models in digital health. Complementary learning material (e.g., video clips), multiple‐choice questions, and exercises are provided online via Canvas.

In the second part, students work in teams and will critically assess the business models of top‐funded companies that offer digital health services. Each team will then present and discuss the findings of the assessment with their fellow students. Additional coaching sessions are offered to support the teams with the preparation of their presentations.

Course Literature

  1. Cohen, A. B., Dorsey, E. R., Mathews, S. C., Bates, D. W., & Safavi, K. (2020) A digital health industry cohort across the health continuum. Nature Digital Medicine, 3(68). 10.1038/s41746‐020‐0276‐9
  2. Collins, L. M. (2018) Optimization of Behavioral, Biobehavioral, and Biomedical Interventions: The Multiphase Optimization Strategy (MOST). Springer: New York, USA.
  3. Essén, A., Stern, A. D., Haase, C. B., Car, J., Greaves, F., Paparova, D., Vandeput, S., Wehrens, R., & Bates, D. W. (2022) Health app policy: international comparison of nine countriesʹ approaches. npj Digital Medicine, 5(1), 31 10.1038/s41746‐022‐00573‐1
  4. Gassmann, O., Frankenberger, K., & Choudury, M. (2020) The Business Model Navigator Pearson Education: London, UK
  5. Grichnik, D., Hess, M., Probst, D., Antretter, T., & Pukall, B. (2020) Startup navigator: guiding your entrepreneurial journey Macmillan International Higher Education: London, UK
  6. Jacobson, N., Kowatsch, T., & Marsch, L. (Eds.). (2022) Digital Therapeutics for Mental Health and Addiction: The State of the Science and Vision for the Future (1st ed.) Elsevier, Academic Press: Cambridge, MA, USA
  7. Keller, R., Hartmann, S., Teepe, G. W., Lohse, K.‐M., Alattas, A., Tudor Car, L., Müller‐Riemenschneider, F., von Wangenheim, F., Mair, J. L., & Kowatsch, T. (2022) Digital Behavior Change Interventions for the Prevention and Management of Type 2 Diabetes: Systematic Market Analysis J Med Internet Res, 24(1), e33348. 10.2196/33348
  8. Kelley, L. T., Fujioka, J., Liang, K., Cooper, M., Jamieson, T., & Desveaux, L. (2020) Barriers to Creating Scalable Business Models for Digital Health Innovation in Public Systems: Qualitative Case Study JMIR Public Health Surveill, 6(4),
    e20579. 10.2196/20579
  9. Kowatsch, T., & Fleisch, E. (2021) Digital Health Interventions. In O. Gassmann & F. Ferrandina (Eds.), Connected Business: Create Value in a Networked Economy (pp. 71‐95). Springer International Publishing. 10.1007/978‐3‐030‐76897‐3_4
  10. Mathews, S. C., McShea, M. J., Hanley, C. L., Ravitz, A., Labrique, A. B., & Cohen, A. B. (2019) Digital health: a path to validation npj Digital Medicine, 2(1), 38. 10.1038/s41746‐019‐0111‐3
  11. Mesko, B. (2022) The promise of the metaverse in cardiovascular health European Heart Journal, ehac231. 10.1093/eurheartj/ehac231
  12. Reichmuth, T., & Ewald, C. Y. (2022) Ten simple rules for building a successful science start-up PLOS Computational Biology, 18(4), e1009982. 10.1371/journal.pcbi.1009982 
  13. Safavi, K., Mathews, S. C., Bates, D. W., Dorsey, E. R., & Cohen, A. B. (2019) Top‐Funded Digital Health Companies And Their Impact On High‐Burden, High‐Cost Conditions Health Affairs, 38(1), 115‐123 10.1377/hlthaff.2018.05081
  14. Schlieter, H., Marsch, L. A., Whitehouse, D., Otto, L., Londral, A. R., Teepe, G. W., Benedict, M., Ollier, J., Ulmer, T., Gasser, N., Ultsch, S., Wollschlaeger, B., & Kowatsch, T. (2022) Scale‐up of Digital Innovations in Health Care: Expert Commentary on Enablers and Barriers J Med Internet Res, 24(3), e24582. 10.2196/24582
  15. Stephanie, L., & Sharma, R. S. (2020) Digital health eco‐systems: An epochal review of practice‐oriented research International Journal of Information Management, 53, 102032 10.1016/j.ijinfomgt.2019.10.017
  16. Steinberg, D., Horwitz, G., & Zohar, D. (2015) Building a business model in digital medicine Nature Biotechnology, 33(9) 910‐ 920. 10.1038/nbt.3339
  17. Stern, A. D., Brönneke, J., Debatin, J. F., Hagen, J., Matthies, H., Patel, S., Clay, I., Eskofier, B., Herr, A., Hoeller, K., Jaksa, A., Kramer, D. B., Kyhlstedt, M., Lofgren, K. T., Mahendraratnam, N., Muehlan, H., Reif, S., Riedemann, L., & Goldsack, J. C. (2022) Advancing digital health applications: priorities for innovation in real‐world evidence generation The Lancet Digital Health, 4(3), e200‐e206 10.1016/S2589‐7500(21)00292‐2
  18. Teepe, G. W., Da Fonseca, A., Kleim, B., Jacobson, N. C., Salamanca Sanabria, A., Tudor Car, L., Fleisch, E., & Kowatsch, T. (2021) Just‐in‐Time Adaptive Mechanisms of Popular Mobile Apps for Individuals With Depression: Systematic App Search and Literature Review J Med Internet Res, 23(9), e29412. 10.2196/29412

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Summary

Emerging Business Models in Digital Health, University of St.Gallen, Fall 2022, 3 ECTS, block course, Course and Examination Fact Sheet

Lecturer
Prof. Dr. Tobias Kowatsch
Prof. Dr. Tobias Kowatsch
Associate Professor for Digital Health Interventions, Institute for Implementation Science in Health Care, University of Zurich (UZH); Director, School of Medicine, University of St.Gallen (HSG), Scientific Director, Centre for Digital Health Interventions, UZH, HSG & ETH Zurich, Switzerland;

Lead Principal Investigator, Mobile Health Interventions, Singapore-ETH Centre, Singapore; Advisor, Center for Technology and Behavioral Health, Geisel School of Medicine, Dartmouth College, USA

Doctor of Philosophy in Management (Ph.D.), MSc in Business Informatics, MSc in Computer Science in Media (CSM) & Dipl.-Inform. (FH) in CSM.