The healthcare industry is one of the hardest to digitalise – rumour has it the NHS still uses faxes! But with a pandemic, initiatives that suddenly have previously taken years to adopt have become reality within a matter of weeks.
The Coronavirus crisis has brought a new focus to the healthcare industry. Healthcare and healthtech start-ups are ramping up innovation efforts. Unfortunately, the UK healthcare space is complex and high risk; startups face fundraising challenges and hurdles from existing healthcare institutions.
Let’s take a deeper look at existing challenges in the healthcare ecosystem and issues innovative healthcare businesses need to consider:
- Regulation – UK healthcare is a heavily regulated industry. It goes without saying that it’s important to understand the risks companies need to adhere to.
- Service Level Agreements (SLAs) – the healthcare industry, especially those that are government-run, will have legacy SLAs and procurement schemes that need to be understood and accounted for.
- Credibility and trust – revenue and profit are one thing, but in healthcare, you can’t iterate a patient’s health. Spending time getting the right legal and credibility standards are key to ensuring that suppliers and customers know companies aren’t conducting unethical business practices.
- Slower initial growth. As the healthcare service needs significant ‘wins’ from improving human health, it takes longer to scientifically prove outcomes. This equates to significant upfront investment to keep the business afloat while outcomes are proved. MedTech has a great role to play in helping automate and improve processes.
- Competition with incumbents – healthcare is an established industry with long-term players. Collaborations are an avenue to explore but should be done so with caution and a commercial hat on.
- Decision-makers in the healthcare industry often try to apply the rigid, process-driven approach of biotech (pharma) to early-stage MedTech, which requires a bit more experimentation – often viewed as risky to a risk-averse industry.
- The increased focus on healthcare driven by the pandemic, presents both opportunity and risk. The industry is nuanced and companies need to assess investor understanding of the industry before committing.
- Security and privacy – hospitals, clinics and medical practices are increasingly using technology to store patient data. It’s key to ensure a robust and secure manner in which your startup deals with data and cybersecurity.
- An established and incumbent industry. It’s not friendly to newcomers. They face the added pressure of a great reputation and getting it right.
- Within healthcare, healthtech is a booming market that is set to grow rapidly, as the effects of an ageing population and cuts to the NHS make technology a crucial source of savings and new methods of treatment.
The drivers for market growth are there and the opportunities are lucrative and satisfying. But without a considered approach many things can go wrong: backers withdraw funding, hardware loses out to the software, drugs fail and key development milestones are missed.
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