For decades, the discourse surrounding women’s health has been dominated by two recurring themes: the chronic underfunding of research and a profound “data gap” that has left half the population underserved. However, as the ecosystem for women’s health technology—often referred to as “Femtech”—matures, a new, more structural challenge has emerged from the shadows. According to a landmark report from the Milken Institute, the primary obstacle facing startups today is not just discovery, but the complex, often impenetrable landscape of coverage and reimbursement.
The report, Coverage and Reimbursement Roadmap: Women’s Health Innovation, identifies a systemic failure in the early-stage development of these companies: a tendency to treat financial sustainability as an afterthought rather than a core component of product design. As the industry looks to scale, the transition from niche wellness products to essential, insurer-backed healthcare services remains a high-stakes obstacle course.
The Genesis of the Roadmap: A Cross-Sector Call to Action
The Milken Institute’s findings are the culmination of intensive deliberations within the Women’s Health Network, a global, cross-sector collaborative dedicated to accelerating progress in the field. In February, the network convened a roundtable of industry leaders, payers, clinicians, and entrepreneurs to dissect the barriers hindering market penetration for new innovations.
The consensus was stark: innovators frequently launch products without a clear strategy for how those products will be paid for, leading to a “revenue cliff” once initial venture capital is exhausted. Jenica Patterson, senior director of the Women’s Health Network, emphasizes that this oversight is often fatal to promising startups.
“I think one of the key takeaways is to make sure that when you’re developing your innovation, you think about reimbursement earlier than you think you should,” Patterson noted in an interview. “They can really lose a revenue-generating opportunity if they aren’t thinking about that coverage and reimbursement earlier on.”
Chronology of a Disparity: From 1993 to the Modern Market
To understand why women’s health companies struggle with reimbursement, one must look at the historical context of clinical research. It was not until 1993 that the National Institutes of Health (NIH) mandated the inclusion of women in federally funded clinical research. For decades prior, women were effectively excluded from the data sets that form the foundation of current medical standards.
The Data Deficit
This legacy of exclusion has left a vacuum in the clinical data that insurance companies—the “payers”—require to approve coverage. Payers operate on evidence-based medicine; if a clinical trial does not specifically demonstrate efficacy for a female population, or if the data is statistically underpowered, payers are hesitant to assign a reimbursement code.
- 1993: The NIH Revitalization Act is signed into law, requiring women to be included in clinical research.
- 2010s: The rise of digital health and Femtech begins, but many startups focus on direct-to-consumer (DTC) models to bypass the slow pace of insurance approval.
- 2024: The Milken Institute releases its roadmap, signaling a shift in industry focus from “wellness apps” toward “clinical-grade care” that requires standardized reimbursement pathways.
Four Pillars of Strategic Commercialization
The Milken Institute report provides a roadmap for startups to navigate the transition from innovative concept to market-ready healthcare solution. The report outlines four key considerations that must be addressed at the earliest stages of development.
1. Defining the Commercialization Model
Startups must decide early whether to pursue a self-pay model or seek payer coverage. The report warns that shifting from self-pay to insurance reimbursement is not a simple pivot; it often requires a fundamental overhaul of the product.
- Self-Pay: Offers faster market entry and pricing control but risks creating a “boutique” service that excludes marginalized populations.
- Payer Coverage: Provides scalability and equity but involves significant administrative friction, price negotiation, and a long lead time to market.
2. Deepening Clinician Engagement
An innovation that does not fit into the existing clinical workflow is destined for failure. Startups must engage OB/GYNs, midwives, and primary care providers during the design phase. If a new digital tool adds five minutes of administrative work to a midwife’s day, it will likely be rejected, regardless of its clinical potential.
3. The Payer-Innovator Dialogue
Innovators often mistakenly wait until their product is finished before approaching payers. The report argues that companies should engage with medical directors and payer innovation teams while the study design is still in development. This ensures that the clinical endpoints being measured are the same ones the payer needs to see to justify coverage. Furthermore, innovators must use the correct nomenclature: language that focuses on “treating disease” is far more likely to be covered than language focused on “lifestyle enhancement.”
4. The Coding Conundrum
Coding—the standardized language used by healthcare providers to bill for services—is the gatekeeper of revenue. Startups must decide early whether they can leverage existing CPT (Current Procedural Terminology) codes or if they need to petition for new ones. A failure to map a product to a code can render an otherwise revolutionary service unbillable.
Official Responses and Industry Perspectives
The challenges outlined by the Milken Institute are echoed by the leaders of some of the most successful companies in the space.
Dr. Neel Shah, chief medical officer of Maven Clinic, notes that the company’s evolution from a DTC startup to a major player in employer-sponsored coverage was driven by the necessity of building trust. “You have to prove that people want the service first, and that it adds value,” Shah explained. He maintains that while the DTC model provided the necessary evidence to prove the concept, true equity in women’s health can only be achieved through integration into the insurance system.
Similarly, Anu Sharma, founder and CEO of the maternity clinic Millie, argues that for certain sectors, self-pay is not a viable option at all. “When it comes to maternity care, I don’t think self-pay is an option,” Sharma stated. “This is a long, complex, and unpredictable journey. It’s not reasonable for a patient to be able to pay for any of the stuff on their own out of pocket.”
For Millie, the path to sustainability involved proving their model in a single, controlled environment before scaling through partnerships with larger health systems. This approach allowed them to negotiate from a position of strength, rather than accepting the initial, lower-tier rates often offered to independent clinics.
Implications for the Future of Women’s Health
The implications of these findings are profound. If the goal of the current “Femtech” movement is to improve outcomes for women, then the industry must move beyond the “disruptor” mentality that has historically defined tech startups.
The Path Forward: A Call for "Evidence-First" Development
The primary takeaway is that the “move fast and break things” ethos is incompatible with the clinical rigor required for insurance coverage. Startups must adopt an “evidence-first” approach. This means:
- Designing for Scale: Building products that satisfy the requirements of Medicaid and large commercial payers from day one.
- Collecting Longitudinal Data: Ensuring that every interaction with a patient contributes to the body of evidence needed to prove the clinical value of the product.
- Regulatory-Payer Alignment: Recognizing that FDA approval is merely the first step; the second step is proving economic value to the insurer.
As Jenica Patterson noted, the risk of ignoring these factors is not just financial—it is a missed opportunity to address the historical neglect of women’s health. “That’s why we put an emphasis on really understanding two or three steps ahead, so you can collect that data to be able to make sure that in the future you won’t run into any of those issues,” she said.
Conclusion
The Milken Institute’s report serves as a wake-up call for the women’s health sector. While funding and research gaps remain critical, the “reimbursement gap” represents the next great hurdle to achieving gender equity in medicine. By integrating coverage strategies into the early stages of product development, engaging clinicians and payers as partners rather than obstacles, and prioritizing evidence-based outcomes, the next generation of innovators has the potential to transform women’s healthcare from a fragmented landscape into a robust, sustainable, and equitable system.
The innovators who succeed will be those who recognize that, in the world of healthcare, the most innovative product is useless if it cannot be accessed by the patients who need it most.
