Before You Innovate: Unique hurdles for women’s health

As I shared in my last post, I can’t help but feel at times that we aren’t doing enough as an industry to fulfill the promise of healthcare innovation for women. So why do we keep taking steps backward and struggling to deliver transformative solutions at scale in women’s health?

Without a doubt, barriers remain in part due to the pervasive legacy of sexism, racism, economic inequality and societal norms that impact progress in women’s care. However, there are also structural challenges in the healthcare system that make innovating in women’s health difficult. But unlike the broader societal problems, these structural challenges can be mitigated for innovators who adopt business models and solution sets that overcome the challenges to unlock value and growth in women’s health transformation.

After years of working in women’s care, four challenges stand out for me that should not be underestimated when building a women’s health business model: 1) fragmented provider care, 2) fragmented payer landscape, 3) low margin on women’s health services, and 4) low spend on branded pharmaceuticals.

Fragmented provider care

Women differ from men in that their primary provider starting at a young age is the OB/GYN. The OB is our navigator for contraception, menstrual problems, preconception planning and mental-emotional health. The OB goes on to deliver our babies and help as we enter menopause. This is an incredibly intimate and trusted patient-provider relationship. However, the OB/GYN is not trained as a primary care provider. This means that women must invest their time searching for another healthcare provider for routine health issues or preventive care, along with all the headaches that come with finding a new provider, scheduling and insurance coverage. Women are already short on time, and this healthcare reality just creates one more barrier to care for women.

Fragmented payer landscape

This fragmentation story continues. Prior to entering Medicare, women are more likely to be covered by Medicaid than men, in part because Medicaid covers 40% of the births in the country. This means that scaling women’s care for those under the age of 65 requires working with three types of payers to reach the full scale of the population: Medicaid, commercial health plans, and self-funded employers. Each of these payer segments have different economic pressures and purchasing dynamics. Serving all payer types can become a time-consuming and high-cost endeavor for any early-stage or even growth-stage company, and something that women’s health innovators need to account for in their growth planning.

Low margin on women’s health services

For most health systems, the women and children’s service line has a lower operating margin than others, such as cardiovascular care and surgery. Similarly, the OB/GYN specialty is not compensated at as high of a rate as many other specialties. The implication for innovators is that the business case for health systems to invest in women’s health is often not straightforward, and independent OB practices are not flush with cash available for innovation investments. However, care transformation won’t fully take place without the engagement of these clinical stakeholders who are the clinical home for most women in the United States. This creates yet another layer of complexity in establishing sustainable business models, despite these economic underpinnings.

Low spend on branded pharmaceuticals

Most medical specialties have a relatively high portion of their patient care devoted to branded pharmaceutical therapies. OB/GYN is not one of those specialties. In pregnancy, less than 2% of the $100 billion in medical spend annually is in drug cost. Even in menopause care, where much of the treatment is pharmaceutical, the cost of the drugs are typically generic, low-cost medications. This is not a bad thing for patients, but it does matter for innovators. In other specialties many innovative business models rely on:

• Managing the spend on high-cost medications, creating value for payers
• Increasing adherence with high-cost medications, creating value for payers and pharmaceutical manufacturers
• Capturing data to advance science, creating value for pharmaceutical manufacturers

These business models are generally not available to companies who work to support the principal provider to women – the OB/GYN. This reality can shrink the economic opportunity of working in women’s health and requires innovators to be very savvy about how to sustain a business.

Breaking through the innovation barriers

These unique dynamics and challenges in women’s health are not unsurmountable, but innovators need to understand the dynamics and build their business models accordingly. At Wildflower, our solution model helps OB providers and payers reduce fragmentation in women’s services, and our business models focus on creating value for the full landscape of payers without charging providers.

Every company will have their own take on how to deploy a strategy that navigates through the realities of women’s healthcare. We need to be eyes wide open about the challenges we face and the unique dynamics of women’s health that make it harder than some other areas of healthcare to deliver scalable, growth-minded, transformative solutions.

In my next post, I’ll dig in more deeply to areas where we’ve seen success in overcoming these structural challenges, and speculate on areas that are ripe for further innovation.