Business Venturing in Regulated Markets-Taxonomy and Archetypes of Digital Health Business Models in the European Union: Mixed Methods Descriptive and Exploratory Study.

BACKGROUND

Digital health technology (DHT) has the potential to revolutionize the health care industry by reducing costs and improving the quality of care in a sector that faces significant challenges. However, the health care industry is complex, involving numerous stakeholders, and subject to extensive regulation. Within the European Union, medical device regulations impose stringent requirements on various ventures. Concurrently, new reimbursement pathways are also being developed for DHTs. In this dynamic context, establishing a sustainable and innovative business model around DHTs is fundamental for their successful commercialization. However, there is a notable lack of structured understanding regarding the overarching business models within the digital health sector.

OBJECTIVE

This study aims to address this gap and identify key elements and configurations of business models for DHTs in the European Union, thereby establishing a structured understanding of the archetypal business models in use.

METHODS

The study was conducted in 2 phases. First, a business model taxonomy for DHTs was developed based on a systematic literature review, the analysis of 169 European real-world business models, and qualitative evaluation through 13 expert interviews. Subsequently, a 2-step clustering analysis was conducted on the 169 DHT business models to identify distinct business model archetypes.

RESULTS

The developed taxonomy of DHT business models revealed 11 central dimensions organized into 4 meta-dimensions. Each dimension comprises 2 to 9 characteristics capturing relevant aspects of DHT business models. In addition, 6 archetypes of DHT business models were identified: administration and communication supporter (A1), insurer-to-consumer digital therapeutics and care (A2), diagnostic and treatment enabler (A3), professional monitoring platforms (A4), clinical research and solution accelerators (A5), and direct-to-consumer wellness and lifestyle (A6).

CONCLUSIONS

The findings highlight the critical elements constituting business models in the DHT domain, emphasizing the substantial impact of medical device regulations and revenue models, which often involve reimbursement from stakeholders such as health insurers. Three drivers contributing to DHT business model innovation were identified: direct targeting of patients and private individuals, use of artificial intelligence as an enabler, and development of DHT-specific reimbursement pathways. The study also uncovered surprising business model patterns, including shifts between regulated medical devices and unregulated research applications, as well as wellness and lifestyle solutions. This research enriches the understanding of business models in digital health, offering valuable insights for researchers and digital health entrepreneurs.