Becker's Hospital Review

77 CIO / HEALTH IT 10 chief digital officers on what layoffs mean for digital health industry By Giles Bruce A er a busy 2021, in which digital health companies raised many billions of dollars and some even went public, the mar- ket for startups offering tech-heavy services like virtual care and data analytics has slowed, leading many of the firms to cut jobs in 2022. Becker's reached out to hospital and health system chief digital offi- cers to get their feedback on what this trend portends for that upstart business going forward. Note: eir responses have been lightly edited for clarity. What do you think the rash of layoffs at digital health companies says about the future of that industry, and do you expect digital health company partnerships with hospitals and health systems to continue? Aaron Miri. Senior Vice President and Chief Digital and Informa- tion Officer at Baptist Health (Jacksonville, Fla.): It's always sad to see layoffs as, at the end of the day, that's a person, a family and a hu- man element that can never be taken for granted. at said, a business has to be a business first, so I understand why the layoffs are occur- ring, especially given how much money quickly flooded the market for telehealth and other solutions. On the partnerships, I don't think health systems will survive unless they smartly partner with the right digital health companies. We can- not afford to be afraid of our own shadow, so my advice is to be bold, take intelligent digital bets and help your health system successfully weather the economic environment. April Giard, DNP. Senior Vice President and Chief Digital Officer of Northern Light Health (Brewer, Maine): ere was a huge influx of these companies during COVID — it started prior to COVID but accelerated during then — and many companies trying to do the same things. It's been and still is a very competitive market. We would see people moving around, as well as mergers and acquisitions at a rapid rate, among these digital healthcare companies. Most of us could see this coming and planned for it. Huge venture capital funding and investments eventually need to show a return on investment, be profitable, and be able to produce and scale in the market. is is the normal right-sizing we would ex- pect. What many of these companies failed to foresee or wasn't in their business strategy was the support for the new solution. It's one thing to build a new shiny solution or digital tool, but if the ongoing support aer it's implemented was not part of the plan it will not be successful. Healthcare is a 24/7/365 service, so the support has to be there and match the need. Another key is the integration aspect for patients, consumers and the clinical staff. e companies that are able to truly integrate and even partner with core systems (EHR, enterprise re- source planning, etc.) have a better chance of being successful. is industry will not go anywhere, but it will go through natural se- lection of those that can produce and show a return. As a CDO, I have been very aggressive with our digital roadmap and partnerships, which are many, but we are very strategic. e viability of these com- panies and their entire infrastructure needs to be considered to drive the hospital and health system's goals and business, which is patient care, quality and affordability. Edmondo Robinson, MD. Senior Vice President and Chief Digital Officer of Moffitt Cancer Center (Tampa, Fla.): Digital health start- ups (like startups in other industries) are always balancing the size and scope of their products and services with the size of the teams needed to execute on their vision. However, there did seem to be a recent mismatch between the outsized valuations of digital health startups and the fiscal realities of their potential customers as many healthcare providers continue to struggle with the effects of the pan- demic. is is a time when startups that are truly adding value will rise above the others and leadership, vision and execution will be par- amount. Although the pace and scale may adjust, startups partnering with health systems will continue. Eric Smith. Senior Vice President and Chief Digital Officer at Me- morial Hermann Health System (Houston): I think any economic shi forces companies, perhaps especially those in earlier stages, to look critically at their expense structure. But I still see growing num- bers of partnerships between digital health companies and health sys- tems. ese companies are able to quickly produce a specific product or solution to address a challenge faced by health systems, which ben- efits both the system and its patients and community members. Close managing of these partnerships, and mitigating risk, will continue to be important, especially when times are challenging. Jared Antczak. Chief Digital Officer of Sanford Health (Sioux Falls, S.D.): ere are more than 11,000 digital health companies today. As long as there are underserved needs, there will be opportunities for innovation in healthcare. On Aug. 23, Sanford Health convened the Summit on the Future of Rural Health Care, which brought together national experts, policy- makers, technology companies and healthcare leaders who shared their expertise and insights about opportunities for health systems to collaborate with digital health companies to shape the future of care delivery. Partnering with digital health companies will continue to be critical to our success in serving our patients when, where and how they want to be cared for while also empowering our clinicians to operate at the top of their license. Digital health tools that assist, augment and au- tomate clinical workflows will also be essential to helping to improve productivity and patient engagement. At Sanford Health, our $350-million virtual care initiative will help us to leverage the best of technology to provide high-quality care close to home. We look forward to continuing to partner with digital health companies that share in our commitment to make care more accessi- ble, affordable and equitable for patients living in rural, underserved communities. John Lock. Chief Digital Transformation Officer of MedStar Health (Columbia, Md.): A large number of digital health compa- nies were started and funded during the last decade and particular- ly during the last couple of years at significant valuations. Many of the companies were in similar niches and without any clear path to profitable revenue. Additionally, the growth many of these companies experienced during the pandemic was extraordinary, and that growth has materially slowed. In my experience, what we are seeing is a nat- ural evolution toward fewer companies who are offering real value

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