In less than one week, the Health 2.0 8th Annual Fall Conference will feature over 200 LIVE demos, 150 speakers, on over 60 panels and sessions focused on innovative solutions within health care technology. Indu Subaiya, CEO & Co-Founder of Health 2.0 interviewed Adam Pellegrini, VP of Digital Health of Walgreens ahead of his appearance at the 8th Annual Health 2.0 Fall Conference. Adam will be participating in the Monday main stage panel “Consumer Tech and Wearables: Powering Healthy Lifestyles.” In this interview, Adam gives insight into Walgreens innovative API creating the seamless user experience.
Indu Subaiya: So you are leading up a number of very exciting initiatives at Walgreens in terms of digital health. Let’s begin by talking a bit about the API program and the developer ecosystem that you’ve built.
Adam Pellegrini: Absolutely. So Walgreens has been offering a very robust API program for quite some time – this idea that our stores in the online space should be really an omni-channel user experience. If you think about our stores, our stores actually have a lot of partners that actually have products in the stores.
So really, our API program is really about partners. It’s about bringing and facilitating the digital ecosystem together via API. So for us in the Health API space, it’s about how do we help all of these different apps leverage the ingredient technologies that Walgreens has created to create a seamless friction as user experience.
IS: You mentioned that the Health API has drawn a lot of members within the Health 2.0 community. Can you tell us a little bit about some partners there and how this is then connected to your Balance Rewards program?
AP: GenieMD is actually one of our partner apps that leverage our Refill by Scan, our personal health app that goes on both Androids and iPhones. And some of that could be really convenient and add a value to their app by embedding the API that we have for refilling prescriptions, the Refill by Scan.
The US health IT space is white hot. Europe lags far behind both in the number of companies and in the amount of money being invested. There have been very few (no?) exits. I was wondering if Europe will ever catch up and which companies and geographies are emerging winners. So I decided to survey a half-dozen Europe-based VC partners active in healthcare investing some of whom have taken their first tentative steps into health IT investing. Here’s what I found out.
But first the impressive US benchmarks: HealthITNews reported in mid-July that VC investment into health IT surpassed $1.8 billion just in the second quarter of 2014, double the amount that had been raised in the previous quarter. Investors have cashed in on exits from companies such as Castlight Health (NASDAQ IPO in 2014); Humedica (acquired by United Health for a reported several hundred million dollars in 2013); and Healthy Circles (acquired by Qualcomm Life in 2013 for an undisclosed amount).
This makes sense given the obvious drivers for health IT activity in the United States: the mandated shift to electronic medical records (EMRs); consumer interest in web and especially mobile health apps; the boom in analytics in all areas including health; and especially the multi-payer system, one that heavily involves employers. Castlight would not even exist without the employer aspect. Rock Health reported in its excellent midyear funding report published in late June that startups developing payer administration tools took in more VC money (over $200 million in the first half of 2014) than any other subsector within health IT.
A Europe of borders
Meanwhile, as much as Europe has dismantled many of the internal impediments to the single market (local currencies, border crossings), there are many barriers to developing solutions to Europe-wide healthcare challenges. These include:
Language barriers. Start a web site for a consumer-facing business and you will see your user base fracture unless you can communicate in at least three (or four!) languages.
Scaling challenges. Try to remedy the challenges inherent in the healthcare system and you will soon realize that there has been virtually no harmonization yet. Single payer systems are fine as long as you stay within them. If you try to work cross-border, then look out! As Antoine Papiernik, a managing partner at Sofinnova Partners in Paris put it, “Our European system is also messed up, but in a different way than in the US. It is the fact that [EU healthcare systems] are completely state controlled and operated that makes it difficult for a Health-IT play to get to scale as well as it could in the US.”
Missing incentives. When it comes to reducing inefficiencies and shifting responsibility and benefit to the consumer, the US healthcare system is a target rich environment. Similar incentives are hard to find in Europe, especially across borders. Consumers are less incentivized when they get cradle to grave healthcare financed by payments much lower than those in typical US health plans. Therefore, said Anne Portwich, a partner at LSP in the Netherlands, it is hard to imagine a consumer-focused company gaining VC financing in Europe, at least before it has huge traction (some promising examples will come up later). This is because “Something the consumer has to pay for him or herself, even 1 Euro per month, that is a completely different [and more challenging] dynamic and a different business model than what we are familiar with.”
Big data not yet “in.” Finally, a less obvious example. The larger business environment in the States has been largely penetrated by the type of thinking that favors “big data” and “analytics” as solutions to real problems. This way of thinking is years away in Europe, said Simon Meier, investment director at Roche Venture in Basel, Switzerland. Meier went part-time for a year in 2013 to work with a startup in big data and advertising so he observed this firsthand. Even sectors ripe for analytics such as retail and advertising have not yet been overhauled in Europe, he says. Therefore, Meier said, “our data scientists are still occupied in resolving issues or setting up infrastructure in areas from which US scientists have already moved on. There are plenty of markets in the European Union that have not even started thinking about data science. Compared to the US, applying data science to healthcare in Europe is going from a simple sailor knot to a Gordian knot.”