Digital Health startups face two major challenges in 2022: meeting aggressive growth goals and adhering to all of the relevant regulations. VC investment in Digital Health is up with 2021 having reached 70% of the total amount of investment (by Q4) in 2020 and 90% of all the investment in 2019. It's no wonder that digital healthcare app development is one of the hottest topics amoung developers, VCs and startups.
The COVID-19 Pandemic has refocused the world’s attention on healthcare technology and accelerated the shift to a digital first approach. Online consultations with doctors, remote access by experts to aid in diagnosis and the digitalization of even more health records; the last year has seen the healthcare space rocket ahead into the future.
These global changes and the sheer volume of investment have raised expectations of investors, who now demand Silicon Valley-like levels of growth. This focus on growth is forcing Digital Health to rethink their approach and to look at outsourcing Digital healthcare app development as they scale their tech teams.
Externalising allows Digital Healthcare to quickly scale up without the lag time of trying to recruit engineers in what is a difficult market for companies trying to recruit good developers. According to research conducted at the end of 2020, there were 1.4 Million unfilled software development positions in the United States and the number of expected graduates was only 400K.
These shortages are not limited to the US. Globally, there is a shortage of 40 million skilled workers and by 2030 this number is expected to grow to over 80 million workers. Finding highly skilled developers, to help Digital Health meet their aggressive growth and product goals, is becoming more of a struggle every day.
At the same time, the shortage in qualified developers has led to a bidding war with developer salaries skyrocketing. With average salaries well over $140K across the US with the salaries for software developers actually growing by 5% in the US in 2020 during a global pandemic.
The risks of bad code run deep for Digital Healthcare. From failing technical audits, to the game of whack-a-mole that companies fall into constantly trying to plug holes and fix bugs. At the same time, bad code makes it hard for digital health to easily integrate their software into other tools or connect it to other systems. But, perhaps, the biggest challenge with bad code is that it can lead to security breaches or non-compliance with critical regulation.
These risks mean that digital health need the A-team but are stuck in a bind. They can’t hire B-rated developers at the same time they can’t hire A rate developers because there is a shortage in the market. The answer to this quandary is to externalise development by working with a trusted partner.
To be clear, Digital Health companies aren’t looking for low-cost outsourcing. Time, compliant Digital Health and scalability are worth more than cash. They are looking to externalise strategic development. In short, they are looking for a strategic partner who can help with compliant Digital Health app development.
The keyword here is compliant. The Digital Health sector faces unprecedented levels of global regulation. From HIPAA to GDPR, big-ticket regulations in the health sector are often applied outside the borders of the country in which the law was passed. If a European Digital Healthcare company processes the data of one American, HIPAA applies. If a US Digital Healthcare company processes the data of anyone who shares that data from Europe, then GDPR applies.
The cost of non-compliance with these regulations is an existential threat. GDPR, for example, levies fines of 20 million € ($24 Million at the time of writing) or 4% of revenue, whichever is greater. The risk posed by these regulations is well known to VCs who look at compliance as part of their vetting and audit process. This means that Digital Health MUST have compliant expert development partners who know these rules and help them comply.
Of course, this will look slightly different in different situations but there are a few commonalities.
Every project needs a clear set of data governance rules that are established before a line of code is written. If this was not the case, then once the data governance rules are written, the existing code must be audited for compliance with these rules and technical debt must be managed quickly.
One of the golden rules of data governance in Digital Health is "never collect data without a reason, always explain why and get consent". What’s more, you need to limit who can see that data to those who really need to and look at approaches like federated machine learning (where data is completely anonymised before usage) if you must draw insights from that data.
The latest version of cloud development languages, such as Node.js and React, let developers do more with less code, which reduces bugs and improves performance. Microservices split up big potential problems into “bite sized” digestible bits, reducing risk because if one part fails the whole code base doesn’t come crashing down.
For non-technical people, we like to describe microservices like the modern ships have watertight compartments below the waterline. If they hit a rock and the hull is breached, the water only fills one of these cells, making it easier to identify the problem and plug the breach. Microservices work in a similar way. If one part of the system is compromised, then it fails but the rest of the software is unaffected, and the engineer only needs to go back and fix that one broken bit of code.
Follow the sun (FTS) refers to a 24-hour approach to development using teams across the globe. With the rise in remote working, secure cloud computing, and faster and more secure internet, FTS is now the gold standard in software development.
In software development, we often talk about the number of days of work a project will be. That means 1 developer working 8 hours per day. But thanks to the FTS approach, you can get three days of work done in one 24-hour period.
The FTS approach is a clean code first approach. This means that developers need to constantly work on clean code because that code has to be handed off to someone else at the end of the day who will work on it overnight. Only the most disciplined and organized developers can handle the constant pace of onboard code – work – handoff to the next time zone. This imposed discipline also has the advantage of stopping common mistakes in development that lead to bugs and problems in the future. Great code, QA, and Clear Documentation are delivered in real-time.
There is a lot of talk about compliance within the digital health space and a lot of development companies pitching their work. But most outsourcing companies are focusing on speed and cost-cutting, they aren't expert partners.
At Vertrical our approach is different. We've built a team of experts in the industry, in compliance and in development so that we can partner with fast-growing digital health to help them scale and meet ambitious growth goals.