The FDA Just Launched A Digital Health Center Of Excellence — Why It Matters And What It Means To You
Last month, the US Food and Drug Administration (FDA) launched the Digital Health Center of Excellence (DHCoE), bolstering the shift toward digital that the healthcare industry has already been embracing. Investment in digital health is at an all-time high. The market cap created from nine IPOs in 2019 from companies in the digital health space sits at $43 billion. There was a record of $4.2B in venture funding for digital health in H1 2020 in addition to continued investments in wearable technology from tech titans like Apple, Google, Samsung, and, most recently, Amazon.
While overtures in this market are strong, digital health still faces significant hurdles, including data quality, measuring effectiveness on care outcomes, and integration issues between innovating parties.
The DHCoE Is A Much-Needed Catalyst In Digital Health Experimentation
The DHCoE aims to meet these challenges by mitigating risk and connecting the dots for innovation within the digital health space that spans consumer health and wellness wearables, digital health technology, mobile health technology, software as a medical device, and technologies used to study medical products.
If successful, the DHCoE will help the healthcare industry:
- Overcome barriers to rapid innovation. The lack of regulatory guidance and credible third-party organizations limit the ability for healthcare organizations to do timely and thorough reviews. The DHCoE looks to eliminate that. FDA Commissioner Stephen M. Hahn, M.D., stated that the DHCoE holds a goal to “ensure that the most cutting-edge digital health technologies are rapidly developed and reviewed in the US.” The DHCoE has outlined its three-step approach to innovating regulatory approaches as “enabling efficient, transparent, and predictable product review with consistent evaluation quality; providing clarity on regulation by developing cross-cutting digital health guidance; and developing novel, efficient medical device regulatory approaches that are least burdensome while meeting FDA standards.”
- Accelerate the shift toward value-based care models. Digital health is a tool that will drive efficiency, reduce wasteful medical spend, and help shift the US healthcare system toward a continuous proactive model. While these shifts are not yet explicitly stated as part of the DHCoE’s mission, it is an anticipated outcome given the increased pressure to move to value-based care. In 2019, 36% of total US healthcare payments were tied to alternative payment models (APMs), and 91% of health insurers surveyed by Health Care Payment Learning and Action Network expected APM activity to increase going forward. As this number continues to grow, digital health is key to future success in these models.
- Coordinate across parties to advance and regulate digital health. Digital health requires coordination across multiple parties with varying expertise. Device manufacturers, medical researchers, physicians, health systems, health insurers, software developers, consumer product sellers, and more must keep integration and security in mind as they design new solutions while also designing for a great user experience. Issues like cybersecurity are early strategic priorities for the DHCoE. In Q2, Forrester evaluated the eight largest connected medical device security providers due to the growth and importance of the space.
- Create trust and awareness across all parties. Digital health success will require near simultaneous buy-in from multiple parties, including health insurers, providers, and consumers, to be successful. Lack of trust from any of these parties will slow adoption across the board. The DHCoE’s transparent provision of scientific support, policy advice, best practices, and oversight capacity will move to generate trust across all parties interacting with digital health.
- Protect population interests. As more tech titans such as Apple, Amazon, and Google continue to enter the digital health space, regulations need to evolve with their innovation. If there is one thing we have learned from numerous congressional hearings, it’s that regulation needs to be proactively thought out as these companies continue to disrupt new industries. The DHCoE must be able to expand beyond traditional healthcare regulation to support the growing role that software, analytics, and new methods of digital diagnosis will play in the new normal for healthcare.