[mHealthEurope] Digital Health: Startups need to “focus on providing added value and work out who’s going to pay for it”

By June 04, 2014
Juliane Zielonka

New payment models are enabling the medical sector and the general public to link up, bringing added value on the one hand and profit opportunities on the other.

Interview with Juliane Zielonka on the sidelines of her presentation on ‘New Payer and Business Models for Better Decision Making in Digital Health’ during the mHealth Summit Europe 2014 held on 6-8 May in Berlin. She is the founder of die Artverwandten, a Berlin-based publishing company specialising in new technologies in the field of digital health.

L’Atelier: In your presentation you made a comparison between the medical sector and the lifestyle sector. What is it that characterises their business models?

Juliane Zielonka: On the one hand there’s the medical sector, which brings together the patient, healthcare practitioners and the payer, i.e. the government via the national health insurance system. On the other hand, the lifestyle sector consists of service suppliers and consumers. These two sectors play different roles. The business model can still work for both but the medical sector is far more regulated, so it requires more time and financial resources to succeed in this field. The goal here is to set up a payment system which will help to create certified standards for everyone. Meanwhile in the lifestyle sector, payments work at the individual level, making profits for the company, while enhancing the consumer’s quality of life.

Can you give us a little more detail on the new payment models you’re recommending?

The new payment models respond to issues such as who is prepared to pay and for what type of information. We thought about how to create payment models that will link the medical sector with the lifestyle sector. First of all it would be possible to provide added value in the medical field and get the user to pay for it. An example here is medical games for patients suffering from chronic illnesses, or products which alert the patient to the fact that s/he should be taking his/her prescribed medication. Data protection systems using barcodes could also actually be seen as products, whose added value would then be financed by private sector companies. And then there’s the collection of data which third parties would be willing to pay for – user data for market studies, and so on.

It’s therefore possible to link up the medical and lifestyle sectors on the basis of the clinical data collected. If you’re confident that your product will work, test it on healthcare practitioners because they certainly have ideas but don’t yet know how to make them profitable. These days the new emerging payment models can serve as a bridge between the different sectors. They create value for one of the stakeholders, who should then be prepared to pay for the service.

As an entrepreneur, what advice would you give to startups?

First of all, you need to know your target group and understand who you’re creating profits and value for. It’s possible to create a lot of social impact, by for instance running awareness campaigns, but who’s going to pay for that? There are many companies which describe themselves as ‘social’ – i.e. they don’t really function like companies and position themselves more in the ‘social’ than the business sphere. The advice I would give a startup in this field is to focus on providing added value and work out who’s going to pay for it. Then it’s a good idea to test your product on a small scale with a limited group of consumers, gather the initial feedback and create a prototype. However, you should also talk about your ideas with the major players in your field and build a network. You need co-operation and collaboration; that will allow you to position yourself in a niche and develop your project. You shouldn’t worry that someone will steal your idea, because real entrepreneurs are driven by a passion for what they do!  However, don’t forget to ensure that you actually pay yourself from the very start of your business.

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