• by Larry Mickelberg , March 8, 2013

What will it take for the tech revolution to work its wonders on healthcare? Like most VC’s these days, I, too, am betting the farm on digital technology transforming the whole sector, but I’m also certain that it will take more than inspired geeks in a garage creating killer apps.

According to popular tech mythology, everything changes when a couple of plucky tech wizards figure out things that lumbering corporate behemoths just don’t get. Unencumbered by bureaucracy and ingrained habits, they see solutions and opportunities where others just see problems and obstacles. 

“Digital Disruption” is the ambition, “what’s next?” is the question everybody is asking, and “healthcare” is a widely tipped candidate for the full-tech assault. After all, Apple took on the music industry with iTunes and iPods; Amazon reshaped publishing, first with online shopping for books and then with Kindle for ebooks; Netflix created new ways to distribute movies. Google turned online search into an advertising business, Facebook made social media a global obsession and YouTube made video sharing a regular part of private and business life. Travel, dating, education, news, personal finance and fitness have also had a digital makeover, so why not healthcare?

No question that digital will reshape healthcare but several things make it a different order of challenge to most of the others.

Healthcare is not discretionary. Buying a book, downloading a tune or a movie, shopping for cheap flights, chatting with social media friends or looking for love interest are nice-to-haves that bring pleasure with little downside risk. They aren’t life-or-death matters, and the consequences of choosing badly aren’t potentially ruinous or life-threatening. As Neil Versel sharply observed recently, “The vast majority of healthcare spending comes not from workout freaks and the worried well, but from chronic diseases and acute care.”

Healthcare involves multiple stakeholders with complex interests and payment structures. The music industry is simple by comparison, yet it took the brains and the muscle of Apple to shape an online music ecosystem that basically enables artists to sell a simple product and consumers to buy it. The “products” of healthcare are far more complex: insurance plans, visits, tests, prescriptions, devices and equipment, interventions and procedures, all interlinking and influencing each other.

Healthcare skews older. Tech wizards typically make their breakthroughs in their 20s and 30s, and tech is shaped by young people who are tuned into the needs and interests of their cohort. It’s a simple fact of biology that younger people have less experience of healthcare than older people; they’ve spent less time dealing with it, they have less need of it and they have less incentive to understand it.

In short, healthcare is far more about avoiding pain (of all sorts) than about seeking pleasure, it’s one of the most complex ecosystems in our society and its core target audience is older rather than younger. Healthcare is a parallel universe with its own strict ethical rules, its own cultures and its own high stakes. For digital start-ups and app builders to make a difference in healthcare, they either need to have a lot of insider experience or else they need to team up with the people who know the ropes.

The dawn of more active aging and of new patient-centered health care paradigms means now is the crucial time to ignite relationships. To wit, marketing agencies have long been the stewards of the healthcare brands and communications and are perhaps in the best position to help their clients create next-generation health experiences, but first they must truly master technology. Conversely, tech professionals and startups must show that they can tackle deeper human challenges than entertaining consumers and producing handy gadgets. Working together, strategic combinations of these players will be a winning formula to help usher in the promising, connected new age of healthcare.