Is It or Isn’t It? Health Care Startups Avoid the Health Care Label

New companies that want to work in the health care field feel they’ll be better embraced by branding themselves a tech firm.

Health care’s public relations problems are not lost on startups, which is why some do everything to avoid the “health care” label even as they enter the system, according to Samyukta Mullangi, MD, and Medha Vyavahare. In an opinion piece in Stat, Mullangi and Vyavahare write that “when a health care startup positions itself as a technology company with a particular fit in health care, it may not be an indication that the company has a misplaced sense of mission. It may be a savvy business move—one that should prompt the health care industry as a whole to engage in serious self-reflection to understand why these new entrants appear to be so averse to branding themselves as health care companies.”

One major problem is that the scientific method, one of the bedrocks of health care change, takes too long. Insurers and other health care stakeholders have begun using pilot programs more often to initiate change, but that hasn’t made startups less skittish because “there is still a certain inertia in spreading the lessons of a successful program across an enterprise,” write Mullangi, an assistant professor of health policy and research at Weill Cornell Medicine, and Vyavahare, a first-year student at Harvard Medical School. “There are many reasons for this, including cultural resistance, financial short-sightedness, organizational complexity, and risk-averse leadership.”

In addition, the authors say that over the last two years $20 billion of venture capital money poured into health care, but three quarters of that went to pharma and biotech. Only a fifth of went to improving health care delivery systems.

“Though successful delivery-side innovations in this field have the potential to make a significant impact on the health and lives of millions, they often require a minimum 10-year runway to achieve scale, and continue to contend with an uncertain policy landscape,” they write.