The reality of today’s funding environment for digital health entrepreneurs is that it’s traditional tech investors who have the lion’s share of the money, while most long-time healthcare investors are on the ropes, contending with fleeing LPs and at least the perception of disappointing returns.
While it’s great news that some tech funds seem interested in dipping their toes into the healthcare space, it’s concerning that the investors with the most resources are not necessarily the ones who understand healthcare the best.
Tech investors, in general, are not always comfortable with physicians, and seem much more at home with engineers and developers. These investors also tend to gravitate to businesses selling directly to consumers rather than dealing with the sordid complexities of our current healthcare system.
Many tech investors are also — understandably — drawn to the power of data, and the possibility of analytics, a sensible affinity but one that at times can translate into an excessively reductive view of medicine that fails to capture the maddening but very real ambiguity of medical science, and especially of clinical practice.
While almost everyone contemplating the problems of the current healthcare system acknowledges that often stubborn, intransigent doctors can be part of the problem, it’s arresting how many technologists don’t also view doctors as a key element of the solution; instead, there seems to be a common, techno-utopian vision in which medicine has been profoundly disrupted, and the role of physicians largely replaced by computers – see here (a particularly vivid example), as well as here.
In the words of digital health investor and doctor Bijan Salehizadeh, “IT rooted VCs don’t know how to relate to or speak the language of physicians. They bow at the altar of revolutionary disruption. That works in non-regulated consumer markets. Not in highly regulated hierarchical fragmented spaces like HCIT.”
The more technology investors I speak with, the more I worry there’s something elemental about medicine that many don’t seem to understand – and worse, they don’t always know what they don’t know.
Doctors have a unique perspective
The experience of being a doctor provides unique insight into the meaning and significance of health.
For starters, as a physician, you develop a profound, overwhelming appreciation of how serious health is, and you experience and help patients and their families in dealing with every phase of illness. When I listen to a young entrepreneur extol his or her new approach to saving large files or sharing music as an example of changing the world, I appreciate and love their enthusiasm and passion – how can you not? At the same time, I also find myself reflecting upon other talks I’ve heard – Judah Folkman discussing his discovery of angiogenesis, or Bruce Walker discussing advances in HIV therapy – and I think: now this – this is changing the world.
Second, for all the emphasis placed in medicine on arriving at a diagnosis and suggesting a treatment, the truth is that medicine is just so much less precise than anyone could possibly imagine. Diseases, diagnoses, best practices: all are so much grayer and less-well demarcated than most appreciate, and patients are far more complex. For all the advances in molecular diagnostics and high-tech imaging, medicine remains far more scientism than science.
Third, once you’ve had the experience of caring for patients, had the privilege of developing relationships with patients over time, it’s impossible not to be moved by the power, complexity, and importance of the doctor/patient connection. Twenty-something Palo Alto engineers may struggle to understand why anyone would waste time with human care providers, but I suspect the many patients with serious concerns or chronic conditions who are fortunate enough to receive regular care would likely offer a very different perspective on the value of this unique relationship.
At the same time, while physicians may genuinely aspire to deliver the best care possible, they demonstrably struggle achieving this; many rely on vague recollections rather than current data, and are notoriously reluctant to discard bad habits (such as not washing hands), and embracing new recommendations (such as utilizing a basic checklist), despite the demonstrated evidence for both.
The real opportunity in medicine, then, is not to replace physicians, but to enable them, and enable patients. This will entail recognizing the foundational value of the close, longitudinal relationship between doctor and patient, and then building off of this by creating tools for both patients and physicians that will enhance this therapeutic connection. To develop such tools, a company will need to combine deep healthcare knowledge with technological sophistication, and create solutions that deliver not just clicks, but durable improvements in patient health.
Areas of opportunity and challenge
One category of opportunity here is turning mHealth into mMedicine (to borrow two terms from Dr. David Albert, founder of AliveCor). Right now, there’s an overwhelming number of consumer-focused wellness apps and fitness gadgets, products like the Eatery and Fitbit which may be pleasant to use, and could potentially support health. The real opportunity is robustifying these sorts of measurement technologies and approaches, so that they not only provide casual entertainment, but could also be used to drive and monitor real medical benefit – see here and here for a discussion on the importance of these sorts of measurements in medicine.
A second opportunity is behavior modification – a staggering amount of illness results from the many poor choices each of us make every day, habits that are notoriously difficult to change. The degree of user engagement engendered by many gaming and social apps is remarkable, and could be harnessed to drive measurement improvements in health. Early versions of this have been used for employee wellness programs, but I suspect there are real opportunities for platforms that can maintain patient interest over time (a huge problem right now), and which can nudge the patient towards improved behaviors and better health.
A third category: care delivery/health system improvement. It’s difficult to identify an individual aspect of the current care system – from hospital admissions to managing illness at home — that doesn’t appear to be a historical relic, and which seems thoughtfully designed with the patient in mind. There are so many opportunities to rethink aspects of this, and ask how could this process be better constructed – ideally incorporating key aspects of design thinking. Traditionally, healthcare innovation has focused on new drugs and devices, but there’s an increasing recognition of the need to improve systems as well – a key focus of leading-edge initiatives such as Dr. Arnold Milstein’s Clinical Excellence Research Center at Stanford, aimed at improving healthcare services.
A fourth category: Chunking big data. While the idea of chasing big data in health is certainly not new, figuring out how to actually acquire the relevant data remains non-trivial, and turning this information into actionable insight remains an abiding challenge – with the key word being actionable, i.e. usable by physicians, or patients, in as frictionless – and ideally delightful – a fashion as possible. Success will require far more than robust analytics. Combining clinical and payor data, meanwhile could be used to support value-based healthcare, highlighting the best way to allocate limited resources. This information could used to improve the quality and efficiency of care, and also could be provided to other financial stakeholders (which will likely increasingly include patients themselves) to support informed decision making, a la Castlight.
A key challenge that all entrepreneurs face, and which seems especially pronounced in the healthcare space, is finding not only an important problem to solve, but a way to get paid for solving it. The perverse incentives in the current healthcare system mean that in many cases, physicians and hospitals are actually rewarded for not being better – they often make money on the extra charges that suboptimal care can generate.
This may explain better than anything else why tech investors like consumer plays – investors understand them, and know how to assess the value, how to monitor, and when to pivot. They’ve also made a lot of money on at least some of these companies, and understand the business model.
In contrast – and unfortunately – the business case for improving care can be surprisingly difficult to make; it’s likely that entrepreneurs may need to carefully identify a specific situation (a concierge practice? A private oncology clinic?) where their proposed improvements can demonstrate the most compelling impact. It’s also why some forward-thinking healthcare entrepreneurs such as Avado’s Dave Chase have focused so much of their efforts on the need for incentives better aligned with patients’ interests.
Partnerships for the Future
While there’s not going to be a magic formula for digital health companies, a leadership team combining healthcare and technology experiences seems a common pattern.
“Homogenous teams all coming from outside of healthcare have the deck stacked against them,” digital health investor Salehizadeh asserts. “The best teams couple doctors with savvy business people or technical founders.”
These sorts of partnership are exactly what Halle Tecco of digital health incubator Rock Health, say she’s seeing among many of the young companies Rock Health supports.
According to Tecco, “Any startup that excludes the MD perspective puts themselves at a disadvantage… just like any doctor-founded company that overlooks design or business model puts themselves at a disadvantage. Most startups in the space need it all! An understanding of the system, an insight for disruptive business models, an eye for design, and a back-end engineering ninja to help the product scale.” She adds, “This is an exciting time for cross-collaboration.”
While it’s far too early to say whether these collaborations are going to yield transformative digital health companies, it’s hard to argue with the approach. Moreover, given the urgent need for innovative healthcare solutions, we should all hope that these broad-based partnerships involving physicians and technologists represent the beginning of a wonderful, productive, and healthy relationship.
David Shaywitz is co-founder of the Harvard PASTEUR program, a research initiative at Harvard Medical School. His a strategist at a biopharmaceutical company in South San Francisco. You can follow him at his personal website. This post originally appeared on Forbes.
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Awesome article, David. Way to tell it like it is!
Technology has the capacity to empower a whole new level of physician-patient communication that a) doesn’t end when the patient walks out the door and b) allows for the patient to review what the physician told or showed him. As some physicians transition their practice to include more preventive and preemptive services – including “coaching,” such as behavior modification to break habits or instill new ones, the technology to support communication with monitoring for results and compliance becomes invaluable to enabling a new generation of physicians.
Great article telling it like it is – love having more docs involved in the HIT revolution! I agree that the answer is not that we can/should “replace doctors”, but nor is it possible to easily “make more doctors”. However, the good news is that we don’t really have a shortage of physicians, we have a shortage of using them efficiently. And yes, HIT can and should replace the part of the doctor’s workflow which they don’t need to do… A great HIT system will shift this type of work away from docs and towards their team… thus allowing the doctors to spend more time on the areas where we really need them – figuring out diagnostic dilemmas, creating deep relationships, managing complex care, while also overseeing a team that takes care of a larger, more stable population. Some more of my thoughts on this at: http://drlyle.blogspot.com/2012/04/emr-apps-taking-off-starting-with.html
Excellent overview. Agree wholeheartedly with your points here.
We need more docs – and nurses, since they’re the ones who end up doing a lot of the work – getting involved and lending a hand.
The software guys then need to listen.
As a species, software guys tend to massively overestimate the importance of their own world views and experience and build healthcare software that is painful to use by throwing features at their problems.
Ironically, all of the talk about doctors being the problem virtually guarantees that the problem will not be fixed. The software guys assume docs are complaining because they’re behind the times. (And some are.) They ignore constructive feedback as whining. The docs pick up on the fact that the software guys aren’t listening to them. And so it goes …
If you’re a doc or a nurse and have a good idea that you think would make your electronic medical record better, email your proposal to me at john at thehealthcareblog.com.
Over the next few weeks, we’ll publish the ones we think are cool …
The sentiment is widespread but largely expressed as apprehension and mistrust by clinicians. As part of the openEHR initiative, a clinician led ehealth innovation, we are trying to put clinicians in the driving seat of eHealth while letting the application developers flourish to provide useful tools that use our health records.
In the end it is a partnership with patients that we, as clinicians understand deeply. We have a lot to learn about how to make these tools work for both interested parties.
Interesting article! I also have another related one on a new way to get health anwers, thought i would pass it on. Check it out: http://www.marketwatch.com/story/healthtap-revolutionizes-healthcare-with-fast-access-to-top-doctors-anytime-anywhere-2012-06-28
@rbaer – ‘more progressive’ in terms of how they view themselves. These are the doctors who view themselves as somehow ‘more than’ the ‘regular’ physicians who ‘just’ practice medicine. This includes people with MD degrees who have never/minmally practiced but instead became consultants, vc’s, investment bankers or joined tech/pharma companies. Many of them feel like they are more than the clinical doctors because they are as good as them clinically because they have an MD degree or mabe have completed residency (even though they’ve barely practiced), but are better, more unique or special because they can do so much more. Wish I were just making this up, but have heard these comments behind closed doors much more than I would have liked.
I’m one of “those” MDs who chose not to continue with residency. I would NEVER think much less claim that I am “just as good” clinically, shame on those who do. Its shockingly naive.
That said, I’m pretty tired of physicians who have devoted their careers to practicing medicine, who I enormously respect, not equally respecting the very unique perspective and skill sets that I do bring to healthcare. That experience is universally shared by my MD friends who also chose not to focus on clinical practice. I certainly do not consider myself qualified to be your doctor or to have the final say over important decisions that require clinical expertise and experience. But I do have a deep understanding of software development, building and running a successful business, investing, and even health policy after spending time in two federal agencies. That is experience that the average clinician does not have, and in the same way that my lack of clinical experience can never be replaced by these other skills, your clinical experience does not take the place of my own unique experiences and expertise. We are complementary, and we should be partners in improving our healthcare system. I personally believe that its people with unique backgrounds and experiences that often come up with the most innovative solutions to problems, especially if they have an equal partner in the “real world” of clinical practice.
My MD made me much better at all of these things, and I’m proud of it, not ashamed that continuing in clinical practice was not for me.
“Second, for all the emphasis placed in medicine on arriving at a diagnosis and suggesting a treatment, the truth is that medicine is just so much less precise than anyone could possibly imagine. Diseases, diagnoses, best practices: all are so much grayer and less-well demarcated than most appreciate, and patients are far more complex. For all the advances in molecular diagnostics and high-tech imaging, medicine remains far more scientism than science.”
This is what a lot of people do not understand. Reading Dr. Topol’s (MD) posts at this very blog, I am not sure whether he understands that either.
@anon: ” there is a real tear down of doctors (by lawyers, tech entrepreneurs and vc’s, policy pundits, and even often other ‘more progressive’ physicians)”
What do you mean by “progressive” – in terms of technology or politically (liberal/left)?
Great post. I am always struck at tech and vc conferences at how marginalized physicians are. There’s a peculiar condescension and belief that techology is going to finally solve the problem of physicians. Doctors are referenced as dumb money or clients, in much the way Pharma reps used to look at them as easy targets. You’re absolutely right that there is a really worship of tech and data and apps as a way to fix everything.
The point that a physician would never (or at least, shouldn’t) consider a startup without having the tech and design influence significantly represented, is absolutely true. And yet, physicians are often excluded from involvement in the reverse situation even if it’s a health care related startup.
I don’t know if it’s due to arrogance or prior earnings on the part of physicians that have led to animosity, but there is a real tear down of doctors (by lawyers, tech entrepreneurs and vc’s, policy pundits, and even often other ‘more progressive’ physicians). Good to see someone stand up and challenge the standard bias.