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The 10 Biggest Challenges Facing Health Tech Startups

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As someone who has been working with health tech startups for several years now, I can attest to the fact that it is an industry that is as challenging as it is exciting. When an industry is going through exponential growth and also has the potential for great innovation and unprecedented impact, challenges can be significant and frequent. This is certainly true of the health tech sector.

My advice to the health tech startups I work with is always that old Boy Scout motto: “Be Prepared!”. There is no doubt that many of the challenges your startup will have to deal with will be unique and there is sweet nothing you can do to prepare for them, but there are many that are common to most startups. I’ve compiled a list of the biggest 10 challenges I think face health tech startups so that you can at least be prepared to address them as and when they arise.

Regulations and Red Tape

Due to the very nature of the healthcare industry there are a lot of rules and regulations to deal with. It is important to remember that they are there to protect your customers, and you. So, whilst you may feel like tearing your hair out with all the red tape that comes with complying with the multitude of regulatory bodies, remember that it is a necessary evil and vital to the success, and safety, of your startup.

Be prepared: Regulations vary depending on your product and your jurisdiction. Find out what regulations apply to the areas you will be operating in.

Personal Data Privacy

According to Forbes, there has been a large increase in legislation across the globe relating to the privacy of personal data. Healthcare data is incredibly sensitive, and startups that handle this data must take extra precautions to ensure that it is protected. This can often require resources a smaller startup may not have access to and end up being quite a significant challenge.

Personal Data Privacy

Be prepared: Start by reading the EU’s General Data Protection Regulation (GDPR) act which set the precedent for similar legislation in other countries. Research privacy regulations in all areas you are operating in and check that you are able to comply. It is vital to do this as these regulations can be quite stringent and have a direct impact on your operations.

Funding Limitations

Generally, tech startups often need a significant investment to get off the ground. In my experience this is particularly true for startups that are in the early-stages and are still in the process of research and development. The huge growth in the health tech startup sector can make funding limitations even more severe.


Be prepared: Research and list potential funders that are particularly interested in the healthcare industry. There are many organizations and institutions like UNICEF, state medical societies, physician foundations, and the like who provide grants specifically for health tech startups.

Slow Adoption

Sadly, the healthcare industry is notoriously slow to adopt new technologies. Healthcare providers and patients are often dubious about trying out new health tech products unless there’s an extremely compelling reason to do so. This can be extremely frustrating for health tech startups, particularly when you have a solution that has the potential to revolutionize an aspect of the healthcare industry.


Be prepared: Make sure your tech solution is REALLY an effective solution to the problem, and that it is as affordable as possible, preferably with a limited “free” version. Ensure your marketing strategy addresses the “pay-for-value” issue and focuses on all the benefits your health tech has to offer.

Limited Access to Data

In order to develop effective healthcare solutions, startups need access to data which can prove extremely hard to come by. Regulations, legislation, as well as patient privacy often prevent heal tech startups from having access to the data needed to fully develop their product.

Be prepared: It is vital that your systems are fully secure so that you are able to guarantee data privacy and prevent unauthorized access to it.

Limited Interoperability

There are a myriad of software systems in the healthcare sector with varying standards, protocols, and data formats. This, coupled with data often being stored in silos, can make even accessing data a challenge.

Be prepared: Ensure that you implement standardized data formats and protocols like FHIR and HL7 in the USA. It is also essential that APIs are used for compatibility and smooth data sharing between various systems.

Limited Technical Expertise

Health tech startups usually require staff with a unique blend of healthcare and technical expertise. It can be a real challenge finding individuals with the skill sets you need, especially for smaller startups who might struggle to afford the salaries the talent they need commands.

Be prepared: Upskilling people who have one skill set and not the other is the most practical solution. You can also identify people with the expertise you need and find ways of enabling them to offer their expertise on an ad hoc basis until your start-up is able to offer them a full time position.

Complicated Reimbursement Models

There are different rules and regulations for reimbursement models depending on the type of healthcare service being provided. These can have a major impact on the financial viability of a health tech startup.

Be prepared: Research the regulations pertaining to reimbursement that are relevant to your product. Ensure your reimbursement model complies and then you will be able to evaluate whether your solution is going to be financially viable, or not.

Limited scalability

Scalability is one of the most common challenges faced by Health tech startups. Often expansion, and even initial implementation, can be hindered by strict regulations, limited funding, and lack of access to the technical expertise required. Without scalability your health tech startup is doomed.

Be prepared: Ensure you are using technology to streamline processes as much as possible. Ensure that your solution is flexible and your systems are streamlined and efficient. Most important, reduce your costs as much as you possibly can.

Poor consumer engagement

Healthcare is a complex industry with an abundance of Health Tech offerings. It deals with an individual’s privacy as well as their physical and mental wellbeing. As such, many consumers are hesitant to embrace new technologies, never mind pay for them.

Be prepared: Only launch your product when it is ready. Devise a human-centric marketing strategy where consumers can see real-life examples of the benefits of your solution. And, most important, encourage feedback and ensure there are multiple opportunities for them to engage with you.

Hopefully you are not completely overwhelmed by this list. The intention is not to put you off pursuing the development of your Health Tech solution, but rather to make sure that you are prepared for the most common challenges startups face. I believe that if you have a Health Tech product with the potential to have a major impact on the healthcare sector, all you need is persistence, hard work, and a healthy dose of patience to overcome these challenges.

What are the biggest challenges you’ve had to face as a Health Tech startup?

Do you have any advice on how to “be prepared” for challenges that may arise?

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