Digital health companies typically fall into three primary categories, though the boundaries between them increasingly blur:
Patient Apps deliver consumer-facing health applications that solve specific functions for patients. These typically begin direct-to-consumer (B2C) before evolving toward enterprise distribution through employers or insurers (B2B2C). Companies like Calm, OneRecord, and Fitbit exemplify this category.
Provider Software sells solutions to traditional healthcare organizations, bringing digital technologies like telehealth, AI, and wearables to existing care delivery models. Examples include Solv, Murj, and Vital, which compete with legacy health technology vendors.
Provider Organizations employ healthcare providers directly and function as covered entities themselves. These digitally-native companies design customer-friendly experiences from inception and generate revenue from traditional healthcare sources. Cityblock, One Medical, Doctor on Demand, and Carbon Health represent this rapidly growing category.
Digital health startups rarely remain in their initial category. Market forces push standalone solutions toward ecosystem integration to maximize revenue and patient impact. This evolution creates significant technical and operational challenges:
Companies break traditional healthcare boundaries by creating hybrid models that combine technology with direct clinical services. This expansion captures more patient touchpoints but introduces complex regulatory requirements and technical integration challenges.
As digital health companies evolve, they face a critical decision: whether to build custom software or adopt existing EHR systems. This "to EHR or not to EHR" question defines their technical architecture and future flexibility.
The ideal solution would be a headless EHR — a system where the content repository is separated from the presentation layer, with all functionality exposed through comprehensive APIs. This would allow companies to leverage underlying infrastructure for compliance while creating unique user experiences.
Unfortunately, truly headless EHRs remain largely aspirational. Even API-forward systems like Athenahealth, DrChrono, and Elation Health expose only limited functionality, forcing companies to compromise between compliance and innovation.
Digital health companies face multiple obstacles when scaling their solutions:
Technical limitations: Current EHR APIs restrict innovation by exposing only limited functionality, creating artificial ceilings on what companies can build.
Infrastructure constraints: Certification requirements impose significant overhead, particularly for companies seeking Medicare/Medicaid reimbursement. Meeting standards like multi-factor authentication, standard APIs, and public health reporting diverts resources from innovation.
Business model realities: Healthcare payment systems ultimately force conformity to established patterns, regardless of how innovative the technology might be.
Market fragmentation: Each deployment requires multiple integration pathways, impeding scale and increasing implementation costs.
Despite these challenges, three promising paths forward are emerging:
API-driven healthcare will commoditize common functions while enabling specialized experiences. Companies like Redox for record retrieval, Ribbon Health for provider data, and Rupa Health for lab orders demonstrate this trend.
Platform models will replace monolithic systems, allowing best-of-breed solutions to integrate seamlessly. The emergence of true headless EHRs would accelerate this transition.
Software boundary blurring occurs as provider organizations share internally-developed tools with the broader market, similar to how Oscar Health pivoted to selling its software platform.
Understanding the distinction between these concepts is crucial:
Connectivity creates data exchange points but doesn't ensure meaningful use.
Interoperability enables systems to exchange and effectively use the information that has been shared.
Standards compliance opens revenue opportunities while introducing implementation constraints, creating a complex balance between innovation and integration.