Reimbursement Gaps Pose Major Hurdle for Women’s Health Startups, Says Milken Institute

While limited funding and research gaps are often cited as primary obstacles for women’s health companies, a new Milken Institute report identifies an additional critical challenge: navigating coverage and reimbursement systems. This barrier particularly impacts women’s health startups attempting to bring innovative solutions to market.

The findings stem from a workshop organized by the Women’s Health Network, a global cross-sector initiative established by the Milken Institute to accelerate progress in women’s health. The February convening brought together industry experts to examine innovation barriers across the sector.

A common misstep identified by the Milken Institute involves developing products without establishing coverage and reimbursement strategies early in the development process. Innovators must make crucial decisions upfront regarding self-pay models, commercial insurance, or public program coverage, as changing course later proves extremely difficult.

“One key takeaway is ensuring reimbursement considerations begin much earlier in development than many expect,” said Jenica Patterson, senior director of the Women’s Health Network. “Companies can miss significant revenue opportunities when they don’t address coverage and reimbursement strategies from the outset.”

Women’s health companies face particular difficulties with reimbursement due to historical research gaps. Federal law didn’t require women’s inclusion in NIH-supported clinical research until 1993, leaving decades of insufficient data.

“We’ve been excluded from research for so long,” Patterson noted. “Many payers express legitimate concerns about missing data. This necessitates planning two or three steps ahead to collect necessary evidence and prevent future coverage complications.”

Key considerations for innovators

The report outlines four essential factors women’s health innovators must address before product development:

1. Commercialization Strategy: Companies must choose between self-pay models and payer coverage from inception, as later transitions often require substantial product modifications to meet payer standards. Self-pay enables rapid market entry and pricing flexibility but limits accessibility and scalability. Payer coverage offers broader access and greater scale but involves pricing pressures and extended time-to-market.

“Self-pay can move quickly—you control pricing and generate immediate revenue,” Patterson explained. “However, it may exclude populations like Medicaid recipients. Transitioning later requires additional evidence collection, potentially necessitating new clinical trials to meet insurance requirements.”

2. Clinician Engagement: Early involvement of diverse healthcare providers—including primary care physicians, OB/GYNs, midwives, and behavioral health specialists—ensures innovations integrate smoothly into clinical workflows without disrupting existing practices.

3. Payer Engagement: Rather than engaging payers only at launch, innovators should collaborate with medical directors and payer innovation teams throughout development to understand coverage requirements, clinical endpoints, and economic evidence needs. Payer evidence standards often differ from FDA requirements.

The report advises using precise language emphasizing disease treatment rather than general wellness to qualify for reimbursement, noting that neither commercial nor public payers cover wellness or lifestyle enhancement products.

4. Coding Strategy: Developing a comprehensive coding strategy early directly influences reimbursement rates, coverage decisions, and time-to-market, whether utilizing existing codes or pursuing new ones.

Innovator perspectives

Maven Clinic exemplifies successful transition from self-pay to insurance coverage. Starting with direct-to-consumer services allowed the company to build evidence supporting employer and payer partnerships.

“Most digital health companies began self-pay—especially those founded 12 years ago,” said Dr. Neel Shah, Maven Clinic’s chief medical officer. “Proving patient demand and value first made sense, but healthcare coverage creates equity and access, compelling us to eventually work directly with payers and employers while maintaining our direct-to-consumer presence.”

Millie, a maternity care provider offering in-person and virtual gynecological services, opted exclusively for insurance-based reimbursement from inception.

“Maternity care cannot reasonably operate as self-pay,” said Anu Sharma, Millie’s founder and CEO. “Patients need comprehensive care throughout unpredictable pregnancies and postpartum periods.” Initially operating from a single Berkeley clinic with limited negotiating power, Millie gradually built partnerships with health systems and co-developed service lines to strengthen its position.

Sharma strongly supports the report’s core recommendation of integrating reimbursement strategies into business planning from day one.

Healthcare innovation requires starting with desired outcomes and building backwards,” she emphasized. “The challenge isn’t a lack of innovators or need—it’s distribution. Success depends on thoughtful long-term reimbursement models and securing investor support through the journey.”

Shah reinforces this perspective, highlighting the necessity of demonstrating meaningful health improvements:

“Without robust evidence showing your product improves outcomes, pursuing coverage becomes pointless,” he stated.

Photo: Maria Korneeva, Getty Images

Source link