Tech firms aim to do for health care what e-commerce giants have done for retail

Nothing about health care shopping is like strolling the aisles of a grocery store.

If it were up to the health care technology companies growing in New Jersey, though, it would at least be something like scrolling the pages of an online store.

Kyle Raffaniello, who was just named CEO at online health care business Sapphire Digital, says it’s about time for the change.

“Health care has, for a long time, perhaps been the only industry where consumers really don’t shop like they do for other goods and services of their life — yet, there’s an argument that it’s one of the most important things to shop for,” she said.

Just as the convenience and quick delivery of today’s e-commerce businesses has altered forever what people prize in the retail market, tech companies in the health care space are eager to reshape expectations. And, per usual, the readiness for the change is evident among millennials.

To actually accomplish that, these businesses are expanding their footprint and offerings by partnering with other health care-focused tech companies that they aren’t in direct competition with — and even pairing up with traditional health care organizations.

Lyndhurst-based Sapphire Digital has certainly done that, while also evolving over time to become a more comprehensive source of cost and quality data, predictive analytics and other concierge services.

Raffaniello said she’s excited about the company’s growth, but it’s not a market without competition.

“More companies are looking to expand in this space because of the desire that exists to address the issue of consumers not always being able to shop for their health care in an informed and intelligent way,” she said. “We believe price and quality transparency is absolutely where the market needs to be going — but it’s the ‘how.’ It has to be meaningful to consumers.”

And, when it comes to being meaningful to millennials, that often means what’s on the web.

Hims & Hers
Dr. Patrick Carroll, chief medical officer at Hims & Hers, a health and wellness e-commerce brand.

Dr. Patrick Carroll, chief medical officer at Hims & Hers, a health and wellness e-commerce brand, said younger generations just aren’t as plugged into the traditional health care channels.

“What we’re seeing — and the research bears this out — is 60-70% will go research health content online before anything,” he said. “They’re already used to it, because they embrace the search engine as an information source. Fifty percent of them just don’t establish care with a PCP at all.”

Carroll finds this to be an unnerving trend, given what recent research has shown about millennials harboring health issues, such as hypertension and diabetes. He attributes the reluctance they have to seek care in spite of that pipeline of chronic disease to both a cost and access problem.

“Even post-(Affordable Care Act), there continues to be study after study highlighting that there’s been a shift toward people in high-deductible health plans and folks delaying care because of costs,” Carroll said. “And, even where it is affordable, the average wait time to see a primary care provider is approaching 30 days.”

The model that Hims & Hers believes they’re having success with — particularly for the millennial demographic — is offering information as well as remote consultations online and then prescribing certain health products on a mail-order basis, mainly treatment options for hair loss and erectile dysfunction.

It’s a new way of doing things. But, given that it’s currently only helping with a small, low-risk group of health consumers, digital health care companies such as this one aren’t stepping on the toes of traditional health care providers. In fact, Carroll said the company is always on the lookout for more local partners in hospitals and health systems.

Hims & Hers
More and more millennials are turning to e-commerce brands such as Hims & Hers for their health and wellness products.

“Part of our strategy is to partner with institutions that realize we’re not in the same space,” Carroll said. “For example, we’re never going to take care of the needs of a high-acuity, sick patient that needs inpatient care. So, I can see us in New Jersey partnering with a health system that sees the value of this direct-to-consumer care approach, especially for this millennial demographic that perhaps some health systems have struggled to reach.”

Cobbling together a working relationship between the disruptive digital startups and the traditional health care settings is hoped on both sides to create an ecosystem that impacts the cost of care.

Raffaniello said that’s also what patients are demanding.

“The pendulum is swinging the other way today,” Raffaniello said. “The consumer is in the middle of the process and asking for solutions to integrate in a more comprehensive way. They’re looking for the tools they need to support their health care journey, where they haven’t had the tools to make an informed decision about that journey from a quality and cost perspective in the past.”

Saving time with tech

Any given midsize hospital can have a lot of software or other technology vendors it works with — health care technology entrepreneur David Barnett, below, says the number often surpasses 200. For a larger health system, try a number much, much higher.

As more technology has crept into the hospital setting, so, too, has the risk.

Datafy LLC
David Barnett is CEO of Datafy LLC, a tech company helping hospitals assess its vendors.

“Hospitals often don’t have the staff or resources to dedicate to third-party risk assessments,” Barnett said. “The reason doing a data security assessment on any vendor is important is because, under (the longstanding privacy rule) HIPAA, hospitals are responsible for the privacy of patient data — even if it’s with a third-party vendor.”

Datafy LLC, which Barnett heads as CEO, wants to make a name for itself as the company that can ease the process by which hospitals eager to innovate verify that the tech companies they’re working with meet certain regulatory requirements.

The Livingston-based startup emerged from one of the New Jersey Innovation Institute’s accelerator programs with the goal of disrupting the status quo at hospitals, which Barnett said is often slow-moving individual evaluations by consultants, with the latest automation.

“We’ve seen that it takes often weeks or months for a hospital or health system to get through data privacy assessments for a new technology they’re onboarding,” he said. “Our process gets that down to about two to three hours. And we’re really proud of being part of hospitals bringing these new, life-saving advancements into their system quickly.”

Conversation Starter

Reach Sapphire Digital at: or 201-963-4331.