COMMERCIALISATION OF DIGITAL HEALTH
An extractive business model
Lyla Latif (PhD)
Chair and Senior Fellow, Committee on Fiscal Studies, latif@uonbi.ac.ke
This blog examines the role of commercial actors in digital health, focusing on their influence across four key areas: partnerships with healthcare organisations, direct-to-consumer products, health data collection and usage, and the terms and conditions of health apps. It emphasises how these actors' funding models, driven by profit motives, directly shape the commercialisation strategies within the digital health sector. The blog highlights the ethical complexities and privacy concerns arising from this commercialisation, particularly in data management and user rights. It argues for a balanced approach in digital health innovation, one that aligns commercial interests with public health goals and ethical standards. The blog serves as a critical analysis of the interplay between commercial imperatives and the evolving landscape of digital health technologies.
Introduction
Digital health refers to the use of technology, especially internet-connected devices and applications, to support health and wellness (Meskó et al., 2017). There has been rapid growth in digital health in recent years, with increasing involvement from commercial actors seeking to capitalise on opportunities in this emerging field (Dahdah, 2022; Ortigas-Wedekind, 2021; Lee, 2022). These commercial actors range from technology conglomerates to startups, each bringing unique contributions to the health sector (Szigetyari and Mesko, 2023; Sreenivasan and Suresh, 2022; Safavi et al., 2019). The categorisation of these actors can be broadly segmented into technology giants, pharmaceutical companies, health startups, and investment firms (Sax, 2021). Each category plays a distinct role in shaping the digital health ecosystem.
Technology giants, such as Apple and Google, have extended their reach into digital health through the integration of health and wellness functionalities into their existing products, like smartphones and wearable devices. Apple's HealthKit and Google's acquisition of Fitbit are prime examples of this trend. These companies leverage their extensive user base and technological prowess to offer health monitoring and data analytics solutions. Pharmaceutical companies have also ventured into digital health, albeit with a different focus. Their involvement often centres around digital therapeutics, telehealth services, and AI-driven drug discovery processes. Companies like Pfizer, Johnson & Johnson, Novartis have invested in digital platforms that complement their traditional pharmaceutical offerings (Kim et al, 2022).
Health startups, on the other hand, are more specialised. They often focus on niche areas like telemedicine, mental health apps, and personalised health tracking (Bohr, 2020). Startups such as MyDawa in Kenya and Aspen Pharmacare in South Africa represent this category, offering targeted solutions that address specific health care needs. Investment firms and venture capitalists are crucial in funding these innovations. The digital health sector has seen a surge in venture capital investing between USD15 billion to USD25 billion in health tech startups. This influx of capital is not only a testament to the profitability of digital health ventures but also an enabler of rapid innovation and growth in the sector.
While commercial actors can accelerate innovation in digital health tools and services, there are several legitimate concerns around transparency regarding data practices, protecting privacy rights and consent procedures, security safeguards, and fair distribution of benefits (Tangari et al., 2021; Hayes et al., 2020) Profit motives shaping development of apps, devices, analytics systems and public-private partnerships can undermine medical ethics, human rights, data security and app user tracking if not properly governed (Rossmaier et al., 2023). This blog critically examines the roles and impacts of commercial actors in digital health, focusing on four key areas: partnerships between technology firms and healthcare organisations, direct-to-consumer digital health products, health data collection and use by consumer technology companies, and the terms and conditions in health apps, particularly the contractual aspects.
Partnerships between technology firms and healthcare organisations
There has been substantial research interest in partnerships emerging between technology firms and healthcare providers/payers to develop and implement digital health tools. These collaborations can allow companies to pilot and validate their products, while healthcare organisations gain access to innovative capabilities to improve care and reduce costs (Ford, 2019). However, Rossmaier (2022) and Inkster et al. (2018) argue many partnerships reflect asymmetric power dynamics that allow corporate interests to dominate. Public sector values around equity and privacy can be undermined, even as private actors frame themselves as socially concerned partners.
One example is the ongoing Google Health partnership with Ascension health system (Copeland, 2019). Since 2019, Ascension has been allowing Google access to millions of patient health records across its sites, in order to develop machine learning tools for tasks like cancer detection or predicting patient outcomes. However, serious concerns emerged regarding consent and data privacy. Patients were reportedly not made explicitly aware their data was being shared with Google, nor asked for permission, posing ethical issues. While Google and Ascension assert the project will lead to beneficial clinical decision support capabilities, regulators and consumer advocates have questioned why a tech giant needed bulk access to protected health information rather than de-identified or synthetic datasets. The perception that a private company was granted expansive data access without informed consent from patients or consideration of rights reflects the imbalance and ethical tensions often endemic to such digital health partnerships between providers and Silicon Valley firms.
This case demonstrates concretely how public sector considerations around transparency, consent and equitable access can be circumvented when commercial interests take precedence (Sekalala et al., 2020), even if goals to advance clinical research and practice are shared. It exemplifies calls by authors like Inkster et al. (2018) for more oversight and governance reforms to ensure balance of powers and priorities when piloting new technologies with ethically risky aspects alongside promised benefits.
Direct-to-Consumer Digital Health Products
Another major area of commercial activity are direct-to-consumer digital health products from startups and technology firms. These include health/wellness apps, personal health tracking devices, at-home testing kits, and telehealth platforms. Such tools can increase health engagement and data access, but questions remain about reliability, safeguards, and equitable access across populations. For example, Wells and Spry (2022) found most self-tracking health apps do not follow evidence-informed practices or ensure adherence to clinical guidelines. Concerns also exist around distributing responsibilities for health management across public and private spheres (Didžiokaitė et al., 2018).
In Kenya and South Africa for example, leading telecoms firms and mobile network operators like Safaricom and Vodacom have been at the forefront of efforts to capitalise on opportunities in mHealth apps and wearables for consumers. For example, Safaricom subsidiary Digifarm develops health and agriculture apps leveraging the company's vast subscriber base and payment platforms. The objective is to diversify revenue streams beyond connectivity services. Vodacom's Health division similarly makes acquisitions and partnerships to build integrated personal health management tools for its customers. These firms exemplify how the intersection of mobility, big data and health engagement is targeted by major industry players seeking new profit avenues in African markets with rapidly increasing smartphone use. They aim to leverage existing billing relationships and digital infrastructures.
At the same time, fledgling health-tech startups are emerging to develop their own direct-to-consumer diagnosis, screening and monitoring tools. For instance, Kenya's Ilara Health and South Africa's HearX Group offer subscriptions for citizens to access telemedicine or mHealth services. Their financing comes from angel investors and venture capital firms focused on healthcare innovation (Saks, 2021; Safavi et al., 2020). While such startups do aim for financial sustainability, their offerings help address access barriers for underserved communities. Nevertheless, textbooks risks around reliability, data ethics and equitable reach across economic divides persist in both startup and corporate-led consumer health tech efforts.
Collection/Use of Health Data
Many scholars (Rossmaier, 2022; Sax, 2021; Pagliari, 2019) identify tensions around large consumer technology firms leveraging digital health products to increase the collection and commercial use of health data at scale. Companies like Google, Apple, Amazon, Microsoft and IBM are making substantial investments in digital health and staking claims of supporting health research and innovation through data-driven initiatives (Gupta, 2023). However, there are worries about informed consent and sharing sensitive data with online advertising platforms. The startup Worldcoin provided a stark example in Kenya, leveraging iris scans from citizens lured by cryptocurrency rewards without transparent disclosure of the full data gathering and commercialisation purposes. Over 130,000 Kenyans signed up to claim their Worldcoin rewards by providing biometric iris scans unknowingly linked to startup's underlying goals around amassing datasets for cryptocurrency identity verification purposes and potential resale value. Critics charged the startup with exploiting people’s economic needs rather than transparently conveying the full scope of data extraction. It exemplified worries over informed consent in commercial health data partnerships.
While Worldcoin is just one case, the example highlights real risks flagged by scholars around privacy, manipulative targeting and covert surveillance when fintech/data science ventures intersect with global health engagement amid inadequate governance. Such cases illustrate arguments that ‘digital health convergence’ undermines health privacy rights and more national/global governance is required to control commercial exploitation of health data (Powles and Hodson, 2017). Other researchers emphasise the need for greater transparency around secondary data uses and more ethical frameworks for public-private data sharing (Shaw et al., 2019; Mittelstadt, 2017).
Terms and Conditions
Terms and conditions in health apps, is a critical aspect of digital health that is receiving increasing scholarly attention (Gelinas et al., 2023; Sax, 2021; Schairer et al., 2018). Commercial actors, including technology firms and healthcare organisations, have a vested interest in shaping these terms to serve their objectives, often leading to a complex interplay of legal, ethical, and business considerations.
Firstly, terms and conditions serve as a legal foundation for the use of health apps, defining user rights, data usage policies, and liabilities. This makes them a vital risk management tool for companies. By inserting broad provisions around data ownership, opaque consent policies, and blanket permissions to share or sell information, commercial developers limit their exposure. Vague yet permissive terms give flexibility to monetise data however they see fit without informing users, face minimal consent burdens, and frame rights in their favour (Sax, 2021; Schairer et al., 2018). For example, a health app might include clauses that user data can be perpetually retained after account deletion, transferred to third parties for commercial use without notification, or used by the developer for secondary purposes like improving algorithms or selling insights. By covering a wide range of scenarios, they preserve their own access while obscuring specifics from consumers.
In essence, the terms and conditions allow commercial entities to unilaterally protect business interests by crafting one-sided data relationships with users. Without transparency or accountability provisions in the legal fine print, profit motives can supersede ethical considerations about empowering individuals to make informed decisions about sensitive health data.
Secondly, the terms and conditions of health apps reflect the business models of these companies. In a sector where data is a valuable asset, how data is collected, stored, and utilised is central to these business models. Terms and conditions allow commercial actors to legally justify the collection and use of data, which can be leveraged for targeted advertising, research and development, and other monetisation strategies. For instance, a company that offers a fitness tracking app might use the terms and conditions to obtain user consent for collecting data such as daily step count, heart rate, and workout routines. This data, while primarily used for providing health insights to the user, can also be utilised for other purposes. The terms and conditions may include clauses that allow the company to analyse this data for research and development, potentially leading to the creation of more personalised and effective health and fitness programs. This aspect, while potentially profitable for the companies, raises ethical concerns regarding user privacy and consent.
Additionally, these terms often allow the company to share de-identified or aggregated data with third parties. This could include sharing health and wellness trends with healthcare researchers or marketing partners. While the data is typically anonymised, there are concerns about the potential for re-identification, especially with advances in data analysis techniques. The practice of sharing de-identified or aggregated data with third parties mirrors a notable precedent set by cases outside the health sector. A pertinent example is that of Safaricom, a major Kenyan telecommunications company, which faced scrutiny for sharing data with a betting company. Safaricom reportedly shared user data such as call patterns, mobile money transactions, and internet usage details, which were then potentially utilised by the betting company for targeted advertising. While the specific details of the data shared and the extent of its anonymisation might vary, the core issue remains the potential risks associated with re-identification.
The case of Safaricom highlights the broader implications for commercial actors engaged in digital health provision. When health apps collect and anonymise user data, ostensibly for research or improvement of services, and then share this data with third parties, there is a risk that the data could be re-identified. This risk is heightened due to advanced data analysis techniques that can potentially unravel anonymisation, especially when combined with other publicly available data. The concerns are more pronounced in the context of health data due to its sensitive nature. If a digital health app were to share anonymised data with a third party, and that party manages to re-identify individuals, it could lead to serious privacy breaches. Individuals might find their health conditions or predispositions disclosed without their explicit consent, leading to potential discrimination or stigma.
Furthermore, terms and conditions often contain clauses that limit the liability of the app developers and place restrictions on user rights. These clauses, while protecting the interests of the commercial actors, can be at odds with user welfare. For instance, disclaimers on the accuracy of health information provided by the app or limits on the liability for data breaches can leave users with little recourse in case of harm or misuse of data.
The critical analysis of these terms and conditions reveals a tension between commercial interests and user rights. While commercial actors aim to create terms that safeguard their interests and maximise their benefits, there is an ongoing debate about the fairness and transparency of these practices.
Observations
The four areas: partnerships between technology firms and healthcare organisations, direct-to-consumer digital health products, the collection and use of health data, and the terms and conditions in health apps not only define their operational strategies but also significantly influence their funding models. The drive to excel in these key areas motivates commercial actors to adopt specific funding models, which in turn, facilitate and shape the commercialisation of their products and services (Lacy-Nichols et al., 2022).
When it comes to forging partnerships between technology firms and healthcare organisations, these collaborations often demand substantial initial investments. Typically, this financial support is garnered through corporate investments or strategic venture capital. The commercial goal in these partnerships is to create innovative, technology-driven healthcare solutions that have the potential to be scaled and monetised. Such ambitious undertakings require hefty financial backing due to the costs associated with research and development, integration of new technologies, and the complexities of navigating regulatory landscapes.
In direct-to-consumer digital health products—like health apps or wearable devices—commercial entities frequently turn to venture capital. This choice is driven by the dual financial needs of these ventures: the development of the product itself and the substantial marketing efforts required to reach consumers effectively. Here, the commercialisation strategy is centred around crafting products with wide appeal and strong marketability, ensuring that these ventures deliver a profitable return on investment for their funders.
The operation of platforms dedicated to the collection and analysis of health data often draws funding from sources keen on the commercial prospects of big data. This includes private equity firms and large technology companies that are diversifying their data portfolios. The commercial thrust for these platforms is to leverage the intrinsic value of health data—utilising it for targeted advertising, selling analytical insights to third parties, or enhancing their own proprietary health services.
Lastly, the terms and conditions in health apps are reflective of more than mere legal requirements; they embody the commercial strategies influenced by these varied funding models. For example, a startup buoyed by venture capital might frame its terms and conditions to permit expansive data collection and sharing. This aligns with a business model geared towards rapid growth and scalability. These terms are meticulously crafted to safeguard the company's interests, mitigate risks, and create channels for monetisation—all crucial factors for investors.
In essence, the funding models adopted by commercial actors in digital health are intricately linked to how they engage in these key operational areas. The need to excel in partnerships, consumer product development, data management, and legal frameworks steers these entities towards specific funding avenues. These choices not only secure the necessary capital for their ventures but also profoundly shape their paths towards commercialisation, reflecting the multifaceted and interconnected nature of the digital health ecosystem.
Commercial actors undoubtedly play a key role in the digital health landscape, a fact underscored by their influence on the development, dissemination, and adoption of digital health technologies (Abernethy et al., 2022). Their involvement is not just a driving force for innovation in this sector, but also a reflection of the commercial potential that digital health offers. However, it is crucial to acknowledge that these commercial entities are primarily motivated by profit, and this motivation fundamentally shapes the design and operation of their products and services.
A compelling example of the influence of commercial actors in digital health is MTIBA, a mobile health wallet developed in Kenya. This platform, designed to facilitate healthcare payments and savings, demonstrates how commercial entities can significantly impact healthcare delivery and accessibility. MTIBA connects patients, healthcare providers, and insurers, enabling easier transactions and better management of healthcare funds. While this platform offers substantial benefits in terms of improving access to healthcare and streamlining payments, it also represents a commercially viable model. The platform's success hinges on user engagement and transaction volume, aspects that are closely tied to its revenue model. In this case, the commercial impetus not only drives innovation but also aligns with broader public health goals.
Conclusion
The role of commercial actors in the digital health landscape is both transformative and complex, driven by a confluence of innovation, strategic partnerships, and the pursuit of profitability. These entities, ranging from technology giants to specialised health startups, have significantly influenced the evolution of digital health, as evidenced in four critical areas: partnerships between technology firms and healthcare organisations, the development of direct-to-consumer products, the collection and utilisation of health data, and the crafting of terms and conditions in health apps.
The MTIBA example in Kenya exemplifies the positive impact that commercial actors can have on healthcare accessibility and efficiency. Yet, it also underscores the fundamental profit motives driving these ventures. The commercial objectives of these actors often shape their operational strategies, as seen in their emphasis on scalable, marketable health solutions and strategic data management practices. Moreover, the reliance on specific funding models, such as venture capital and corporate investment, further steers these companies towards commercialisation, influencing everything from product design to user engagement.
However, this focus on commercialisation raises critical ethical considerations, particularly around user privacy, data security, and equity in healthcare access. The case of Safaricom's data sharing practices in Kenya, for instance, highlights the potential risks associated with commercial actors' control over sensitive health data. This points to the need for a balanced approach in the digital health sector, where the drive for innovation and profitability is harmonized with the ethical imperatives of protecting user rights and promoting public health interests.