I talked to Jason Scharf about new business models and digital health to get a glimpse of where the world of life science and healthcare are going. Jason is the host of the Austin Next Podcast. He has been an operator at companies like Illumina and Keen Health. Below is a taste of the topics we discussed.
It seems timely to start with a discussion about business models for anti-infectives - therapies for illnesses that aren’t typically chronic conditions. There is a gap in the market because regardless of how many people use a drug and for how long, the cost of development is high.
What about a subscription model based on creation vs usage? This would provide an incentive to develop and produce a drug regardless of usage so it’s available when needed. There is a free rider problem here. What happens in health systems that didn’t pay for the subscription? Do they pay a late fee? Or is this therapy unavailable to members?
We are witnessing the consumerization of health. This would seem to make access for some situations more convenient whether online or at a small space at the local mall. But how to integrate all my health records? Ideally at some point, one person is tracking my overall situation.
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I’m also very curious about digital health from a preventative point of view. How is that paid for and where are the incentives? We live in a culture where we only pay for things when they're to be fixed after they're broken. I’m all for developing new drugs, but it feels a bit like a dog chasing its tail. How can we prevent obesity, diabetes etc?
One challenge is the immediacy of feedback. Jason described a 2x2 matrix of complexity vs feedback proposed by Clayton Christensen in The Innovator’s Prescription. There are apps that will help you fall asleep. The feedback is immediate. Falling asleep is fast. (Do you fall asleep more easily?) Weight loss is slow. It takes months of consistent effort in the face of a gazillion distractions. This is the key to everything right? Complexity of the solution vs feedback. How do you get behavior change over the long term? The opportunity for reducing obesity is to make feedback more immediate or decrease the complexity of care (which takes us back to a pill).
Jason is excited about the possibilites forAustin. He says they need to find their unique sauce. This is interesting for a region to be competitive and different from Silicon Valley, Boston, RTP etc. Not just having capabilities, but a unique mix that draws the right people. Tech convergence is one possibility he sees. There is a lot of tech infrastructure in Texas. There are opportunities like AI for drug development, e-commerce and lab testing. What would it take for a Mom and Pop doctor’s office to offer remote visits? What about AI driven clinical decision support software?
We covered a lot of ground and this episode is sure to prompt some ideas for whatever you are working on.
Digital Health and Business Model Innovation