What's really killing digital health startups: failure to do due diligence.
The VC startup model relies on finding white space and occupying it. Heavily regulated industries (like health care) tend not to have a lot of white space because the boundaries are rigidly defined by law. It's not a good fit for health care.
But I think it is possible to want to do something health related, conclude that the medical industry is a nightmare, and find another approach.
I mean, you can claim that things like MyFitnessPal are health apps, but it's still a fine line you have to walk where you can't give any advice, all you can do is observe and report. Try to go any further than that and you're providing diagnostic services, which makes you subject to all sorts of laws. The FDA and DHHS are very aggressive in protecting their regulatory scope.
http://www.fda.gov/AboutFDA/Transparency/Basics/ucm194244.ht...
Though, yeah, given that the FDA is the FOOD and Drug Administration, I am sure they impact grocery stores: https://foodpoisoningbulletin.com/2014/fda-proposes-rule-for...
That does not mean HIPAA impacts grocery stores, restaurants, etc.
Though if you search for "HIPAA and grocery stores" it does pull up Von's page on HIPAA related to the fact that stores can have a pharmacy window in them:
http://rss.vons.com/ShopStores/Pharmacy-HIPAA.page
So, yes, while anyone selling food will be regulated by existing food safety rules/organizations -- including the FDA -- that does not prevent someone from saying (to themselves) "I would like to make the world healthier. I don't think becoming a doctor is The Answer. I think The Answer is running an organic restaurant."
And please don't argue with me that how you conceptualize it does not matter. You cannot tell me that Chipotle, with its "Food with integrity" concept and supporting policies, is the same as any other fast food taco joint.
(I ate there consistently for a long time to get well after doctors wrote me off for dead. That did not cause Chipotle to suddenly have to comply with HIPAA.)
It is the same as any other fast food joint. Heck, food quality improvements were an early selling point for McDonald's.
What you describe is absolutely the wrong way to start a business: you should look at the type of business you want to open (in this case, a restaurant) and look for white spaces. Opening an organic restaurant is only a sensible idea if the market would respond to an organic restaurant and the category isn't already over-served. If that overlaps with your passion, then great!
Never mind there is no scientific evidence saying organic food is better for you - this is where "health" delves into pseudoscience, and the entire reason the FDA exists.
It seems to me that what I am describing is exactly what (at least some) disruptive businesses -- like AirBnB -- do: Redefine the problem in order to find a white space because the thing they are doing did not exist until they did it, so there isn't really any competition.
"Redefining the problem" is marketing speak for finding a way to trick consumers into using your business model. It's fine in the case of something like Uber where you're short-circuiting a bunch of disparate and protectionist taxi laws, but federal regulatory agencies are rarely fooled by such tactics, and aren't shy about labeling you and your company as scam artists while sending a federal prosecutor at you if you try.
Basically, if you're gonna fuck with the government, make sure you fuck with municipal and state governments. The feds don't take crap, and will steamroll you if you threaten to circumvent their jurisdiction or deceive them in any way. This happens to hundreds of companies a year (just look at Theranos and 23andme for some high-profile examples), so they're definitely not bluffing.