While the narrative surrounding women’s health has long focused on the chronic underfunding of research and the historical exclusion of women from clinical trials, a new, critical obstacle has emerged as a primary barrier to market success. A comprehensive report from the Milken Institute has identified that for many startups, the failure to secure sustainable coverage and reimbursement pathways—often due to poor early-stage planning—is effectively stalling innovation.
As the sector matures, the ability to develop a breakthrough product is no longer sufficient. Innovators are increasingly finding that without a robust strategy to navigate the complex landscape of public and private payers, even the most promising health technologies risk languishing in obscurity, failing to reach the patients who need them most.
The Core Challenge: A Strategic Blind Spot
The Milken Institute’s findings, derived from a series of workshops convened by its Women’s Health Network, suggest that many innovators fall into a "product-first" trap. They prioritize the technical development of a device or digital health platform without conducting the necessary legwork to determine how that innovation will be paid for once it reaches the market.
According to Jenica Patterson, senior director of the Women’s Health Network, the consequences of this oversight are severe. "I think one takeaway from the report is to make sure when you’re developing your innovation, you think about reimbursement earlier than you think you should," Patterson noted. "They can really lose a revenue-generating opportunity if they’re not thinking about that coverage and reimbursement earlier on."
The difficulty is compounded by the "data deficit" in women’s health. Because federal law did not mandate the inclusion of women in NIH-supported clinical research until 1993, there is a historical lack of longitudinal data. Payers are often risk-averse, and the absence of robust clinical evidence frequently becomes the primary justification for denying coverage.
A Chronology of the Regulatory and Economic Landscape
To understand the current bottleneck, one must look at the evolution of women’s health as a commercial category.
- Pre-1993: The Erasure Era. The systematic exclusion of women from clinical research led to a knowledge gap that persists today. This lack of data makes it difficult for modern startups to prove the efficacy of their products to skeptical insurance underwriters.
- 2010s: The Rise of Digital Health. The advent of femtech and digital health saw an explosion of direct-to-consumer (DTC) wellness products. These companies often avoided the "reimbursement headache" by opting for self-pay models.
- 2020-Present: The Pivot to Payer Coverage. As the market has saturated, investors and founders have realized that DTC models are difficult to scale. The focus has shifted toward integrating women’s health into the broader healthcare ecosystem, requiring a transition from the "wellness" label to "clinical treatment."
Four Pillars of Strategic Commercialization
The Milken Institute report provides a roadmap for startups to avoid the common pitfalls that lead to bankruptcy or stagnation. These four pillars represent the essential components of a viable business plan.
1. The Commercialization Dilemma: Self-Pay vs. Payer Coverage
The decision between self-pay and insurance coverage is perhaps the most defining moment for a startup.
- Self-Pay Models: These offer a faster route to market and allow companies to retain pricing control. However, they inherently create a barrier to entry for lower-income populations, limiting the company’s impact and long-term scalability.
- Payer Coverage: While this path provides the necessary volume to achieve true scale, it is fraught with bureaucratic hurdles. Switching from self-pay to insurance is rarely seamless; it often requires a fundamental overhaul of the product’s value proposition and data reporting structures to meet the stringent standards of insurance carriers.
2. Clinician Integration
Innovation is only useful if it is used. Startups frequently design platforms that sound brilliant in a boardroom but create excessive administrative burdens for clinicians. By involving OB/GYNs, midwives, and behavioral health specialists early in the development cycle, companies can ensure their solutions integrate into existing workflows rather than disrupting them.
3. Early Payer Engagement
The report urges founders to engage with payers long before the launch phase. This includes consulting with medical directors and innovation teams regarding study design. Crucially, founders must recognize that the data required by the FDA to prove safety and efficacy is not necessarily the same data required by an insurer to justify reimbursement. Insurers care about economic value and clinical outcomes; products marketed as "lifestyle enhancements" are almost universally rejected for coverage.
4. Coding Strategies
The coding process—the language of billing—is the gatekeeper of revenue. Companies must determine whether their innovation fits into existing Current Procedural Terminology (CPT) codes or if they need to pursue the creation of new ones. A failure to map out a clear coding strategy can lead to years of administrative delays.
Supporting Data: Lessons from the Field
The experience of market leaders highlights the reality of these challenges.
Maven Clinic, a unicorn in the space, utilized the self-pay model as a proving ground. "You have to prove that people want the service first, and that it adds value," says Dr. Neel Shah, chief medical officer at Maven. Maven used its initial DTC success to gather the data necessary to convince employers and insurers that their services reduced costs and improved outcomes. This transition was not merely a change in business model; it was a shift in their entire evidence-collection strategy.
In contrast, companies like Millie—a maternity care clinic—found that a self-pay model was fundamentally incompatible with their mission. For maternity care, where outcomes are highly unpredictable and costs can be exorbitant, insurance-based reimbursement is a prerequisite for equitable access. CEO Anu Sharma emphasizes the "build-backwards" approach: "If you’re building anything in healthcare, you have to start with the endpoint and build backwards. It’s all about solving distribution."
Implications: The Future of Women’s Health
The implications of the Milken Institute’s findings are clear: the "femtech" era of wellness apps is giving way to a more disciplined, clinical era of women’s health.
The Shift Toward Clinical Evidence
For startups, the mandate is now clear: collect clinical-grade data from day one. If a company treats its product as a "wellness enhancement," it will likely be relegated to the self-pay market, limiting its growth and its ability to serve the populations that need it most. To gain reimbursement, companies must pivot their messaging to "treatment of disease," effectively aligning themselves with the priorities of public and private health insurers.
The Role of Equity
The most significant implication of this report is the link between reimbursement and health equity. When companies rely on self-pay models, they essentially cater to a demographic that can afford out-of-pocket costs. By forcing startups to grapple with reimbursement early, the industry is effectively being pushed to create systems that are accessible to patients on Medicaid or those with standard commercial insurance.
Closing the "Data Gap"
Finally, the emphasis on reimbursement is inadvertently helping to close the gender data gap. Because startups are now being forced to run more rigorous trials to satisfy payer demands for economic and clinical evidence, the amount of data available on women’s health outcomes is expanding.
Conclusion
The path forward for women’s health innovation is no longer just about raising capital; it is about building sustainable, integrated business models. The Milken Institute report serves as a wake-up call to founders: the "innovation" is only half the battle. The other half is the complex, often unglamorous, and absolutely essential work of securing the pathways—coding, clinical validation, and payer partnerships—that turn a brilliant idea into a standard of care.
As Dr. Neel Shah poignantly noted, if a company fails to invest in the evidence required for coverage, their innovation is, at its core, a "non-starter." The era of "move fast and break things" has no place in the clinical reality of women’s healthcare; in its place, a new mandate has emerged: move deliberately, collect the data, and build for the patient, not just the market.
