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NICHE Report Summary

Project ID: 654732
Funded under: H2020-EU.1.3.2.

Periodic Reporting for period 1 - NICHE (Navigating and Innovating in Complex Healthcare Ecosystems)

Reporting period: 2015-08-15 to 2016-11-14

Summary of the context and overall objectives of the project

How can technology firms navigate and influence complex healthcare ecosystems to help society innovate healthcare provision? Technology holds vital promises to alleviate economic and demographic strain on healthcare systems but market innovation has proven difficult in healthcare. Conventional marketing is based on linear diffusion models created for consumer or investment goods markets. In healthcare however, innovating firms face diverse stakeholders: healthcare practitioners, buyers, patient groups, regulators, politicians, the media and the public at large. Innovation in such ecosystems requires interactive and iterative processes of market sensing, networking, coalition building, and a deep understanding of healthcare and regulatory practices. The NICHE project will help health technology companies to navigate, influence and gain traction for their innovations in complex healthcare ecosystems by designing and testing a healthcare market engagement framework.

Research Objective: To significantly enhance academic, policy and practitioner knowledge in healthcare and other complex ecosystems by designing a market engagement framework including:
RO1: a User-centric assessment tool to map interacting stakeholders, service networks, technologies and practices to assist in user-centric design and market sensing in global healthcare ecosystems.
RO2: a Strategic engagement model to allow for a contextual analysis of engaging in collaborative relationships and regulatory interactions in healthcare / health tech markets.
RO3: a Competency framework to permit an audit of existing and targeted recruitment for market shaping skills with direct application for health tech companies.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

The NICHE researcher’s outgoing phase was spent at the Center for Information Technology Research in the Interest of Society (CITRIS), University of California, Berkeley. A 12-month study of user and payer adoption practices and technology/user interactions identified and followed connected health innovations aimed at chronic disease management through different phases of commercialization across the connected health ecosystem. The semi ethnographic method allowed for the investigation of detailed patterns of social and material interactions across sites; this was supplemented by stakeholder interviews and documentary research into regulators, policy makers, payers, hospital managers/purchasers, healthcare practitioners and patient groups.

As part of this investigation, the researcher conducted 35 formal interviews, 10 informal interviews, 104 hours of observation and collected over 315 documents including firm annual reports and other firm-specific documents, web documents, articles, consultants reports, statistics and others. Data collection involved technology providers (startups, medium-sized companies and multinational companies), pharmaceutical companies, healthcare providers and decision makers to venture capitalists, consultants and other influencers. Data collection was focused on companies in different phases of development to compare and contrast ecosystem navigation at various points of a firm’s lifecycle.

To test the emergent framework against ecosystem practices in a different regulatory and reimbursement context, the researcher conducted an additional 10 interviews and 10 hours of participant observation during the first secondment at Ecole de Mines ParisTech’s Centre de Sociologie de l’Innovation. Analysis of the data has now begun. Early results confirm the difficulties for connected health startups in orienting their technological and commercial development toward multiple potential markets and multiple target segments of users, buyers and influencers. The typical go-to-market strategy in connected health consists of a so-called “B2B2C” strategy, which involves selling to end consumers or patients through the healthcare provider or the self-insured employer. However, in the words of a high-profile venture capital and consultant firm in this space: “B2B2C is as muddled as it sounds”, due to this strategy’s lengthy and complicated adoption patterns. Lead times for testing, evaluation, adoption and return on investment of these technologies are often too long for startup firms, who frequently do not possess the financial runway to survive these extended time periods. Financial support is not always adapted to the changes in adoption patterns in comparison to more consumer oriented technology. The temptation to adopt a quicker go-to-market strategy aimed at a consumer rather than medical market is great for these startups, but overall impact on the health system may be lessened by a widespread consumer oriented go to market strategy, and reimbursement issues persist in both markets. NICHE will contribute to knowledge around how such a strategy can be adopted and efficiently driven by young firms. A first article on the historical development of the connected health market, stemming from background data collected in preparation for the NICHE project research, has been accepted at the international marketing journal Marketing Theory (Impact factor 2.673).

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

By adopting a practice and network perspective NICHE findings will contribute to marketing and innovation literatures through an ‘inside out’ perspective. It will complement economic sociology insights, which often have focussedon financial markets, and those in medical sociology focussing on users and patient groups. It will provide much-needed conceptual and empirical expertise in healthcare marketing, an area lacking attention from mainstream marketing academics.

Beyond academic impact on the state of the art, NICHE research findings will directly benefit industry as they are developed in cooperation with firms and through my second secondment in industry. It will provide project managers, R&D managers, technology entrepreneurs and marketing managers with a framework for sensing, shaping and innovating healthcare markets, gaining stakeholder commitment, and developing collaborative business models. This will prove vital for Europe’s resource-limited small to medium sized enterprise (SME) pool in a societally and economically critical growth industry. Project findings will also guide policy design around business ecosystems, competency initiatives and collaborative healthcare business models, for instance in designing incentive or reimbursement systems to boost technology adoption of healthcare practitioners and patients, or revenue share models for healthcare SME networks. Insights will support EU initiatives such as the European Innovation Partnership on Active and Healthy Ageing, which has identified ICT as a vital part of ageing well.

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