THCB reader and occasional contributor Dave Chase had this to say about Bill Crounse, MD’s recent post “Why the Creative Destruction of Healthcare May Not Be a Good Idea.”
“There is no doubt there are some obnoxious people throwing around arrogant/naive ideas. However, the “creative destruction” and “disruptive innovation” that has been most impactful has come from physician-entrepreneurs. Often, they are the most provocative and hard-hitting in their language.
It seems loosely similar to how the most virulent anti-smokers are former smokers. They want others who they can relate to experience the liberation they’ve experienced.
I wouldn’t assume ill-intent from these MD-entrepreneurs using direct language. They simply were fed up with what they experienced as “broken” and stepped up with approaches that have out-performed.
I’m thinking about the MD-entrepreneurs and innovators who have led CareMore, Nuka Model of Care, Qliance, Iora Health, MedLion, Healthcare Partners, etc. Sometimes to catalyze change, one must use stark, hard-hitting language.
That doesn’t seem like a foreign concept to the many excellent MDs I’ve known over the years. I have enormous respect for any entrepreneur, especially one coming from tradition-bound professions who are willing to stick their neck out and endure enormous personal financial risk.
Bob Margolis shared how his colleagues referred to him as a “communist” and his team-based model as “communism” yet Bob’s org achieved far better outcomes. He had the last laugh when that “communist” sold his business for $4.4B last year.
The comments from these MD-entrepreneurs is they feel they aren’t doing their MD friends any favors by candy-coating what is widely recognized as a system that isn’t close to reaching its full potential.
In contrast, the orgs those MD-entrepreneurs are running are the reigning “Triple Aim Champs” that we should celebrate — colorful language or not. Often the most impactful entrepreneurs aren’t particularly “polite” in their language — Steve Jobs, Bill Gates, Larry Ellison et al called it like they saw it.
What’s wrong with that?”
Recently I came across yet another media article with suggestions as to how digital health products can gain more widespread adoption. The writer notes that “we can learn a lot from the pharma and healthcare industries,” and goes on to discuss the importance of engaging the doctor.
This article, like many I read, doesn’t acknowledge the downsides of using pharma’s tactics.
I have to assume that this is because from a business perspective, there aren’t a lot of downsides to pharma’s tactics. Pharma, along with many other healthcare industry players (hospitals, insurance companies, device manufacturers) has overall been extremely successful from a business standpoint.
So if the intent is to help digital health companies succeed as businesses, then by all means one should encourage them to copy pharma’s tactics.
But as we know, what works for business has often not worked well for serving the needs of individual patients, or to society from a health services and public health perspective.
Last year was a banner year for digital health, as the market saw significant growth in funding, bigger deals and new investors entering the space. So what’s in store for 2013? According to a survey of nearly 140 digital health entrepreneurs and over 50 health care information technology venture investors, conducted by my venture capital firm InterWest Partners, we are in for another exciting ride this year. In the survey, we asked which sectors will see the most love from investors in 2013; which companies (if any) will see a $1 billion valuation; where they are having trouble recruiting; and which digital health entrepreneur would win “Survivor: HCIT Island” The answers? Well, it all depends who you ask.
I recently viewed health care through the lenses of a technology entrepreneur by attending the Health Innovation Summit hosted by Rock Health in San Francisco. As a practicing primary care doctor, I was inspired to hear from Andy Grove, former CEO of Intel, listen to Thomas Goetz, executive editor of Wired magazine, and Dr. Tom Lee, founder of One Medical Group as well as ePocrates.
Not surprising, the most fascinating person, was the keynote speaker, Vinod Khosla, co-founder of Sun Microsystems as well as a partner in a couple venture capital firms.
“Health care is like witchcraft and just based on tradition.”
Entrepreneurs need to develop technology that would stop doctors from practicing like “voodoo doctors” and be more like scientists.
Health care must be more data driven and about wellness, not sick care.
Eighty percent of doctors could be replaced by machines.
Khosla assured the audience that being part of the health care system was a burden and disadvantage. To disrupt health care, entrepreneurs do not need to be part of the system or status quo. He cited the example of CEO Jack Dorsey of Square (a wireless payment system allowing anyone to accept credit cards rather than setup a more costly corporate account with Visa / MasterCard) who reflected in a Wired magazine article that the ability to disrupt the electronic payment system which had stymied others for years was because of the 250 employees at Square, only 5 ever worked in that industry.
The gap between model or potential solutions and solutions that work in the real world – the translational gap — is arguably the greatest challenge we have in healthcare, and is something seen in both medical science and in digital health.
Translational Gap in Medical Science
The single most important lesson I learned from my many years as a bench scientist was how fragile most data are, whether presented by a colleague at lab meeting or (especially) if published by a leading academic in a high-profile journal. It was not uncommon to watch colleagues spend months or even years trying to build upon an exciting reported finding, only to eventually discover the underlying result was not reproducible.
This turns out to be a problem not only for other university researchers, but also for industry scientists who are trying to translate promising scientific findings into actual treatments for patients; obviously, if the underlying science doesn’t hold up, there isn’t anything to translate. Innovative analyses by John Ioannidis, now at Stanford, and more recently by scientists from Bayer and Amgen, have highlighted the surprisingly prevalence of this problem.
Here at THCB we really can’t think of many lectures we’d rather sit in on than Peter Thiel’s Stanford course on entrepreneurship. And we can’t think of a better guest to catch than Netscape co-founder Marc Andreeson. In this talk, Andreeson talks about how healthcare IT is changing in the Facebook and Big Data Era era, the privacy issue and how the cloud may or not be eating software.
Is Software Eating the World?
Marc Andreessen’s most famous thesis is that software is eating the world. Certainly there are a number of sectors that have already been eaten. Telephone directories, journalism, and accounting brokerages are a few examples. Arguably music has been eaten too, now that distribution has largely gone online. Industry players don’t always see it coming or admit it when it arrives. The New York Times declared in 2002 that the Internet was over and, that distraction aside, we could all go back to enjoying newspapers. The record industry cheered when it took down Napster. Those celebrations were premature.
If it’s true that software is eating the world, the obvious question is what else is getting or will soon get eaten? There are a few compelling candidates. Healthcare has a lot going on. There have been dramatic improvements in EMR technology, healthcare analytics, and overall transparency. But there are lots of regulatory issues and bureaucracy to cut through.
Education is another sector that software might consume. People are trying all sorts of ways to computerize and automate learning processes. Then there’s the labor sector, where startups like Uber and Taskrabbit are circumventing the traditional, regulated models. Another promising sector is law. Computers may well end up replacing a lot of legal services currently provided by humans. There’s a sense in which things remain inefficient because people—very oddly—trust lawyers more than computers.
It’s hard to say when these sectors will get eaten. Suffice it to say that people should not bet against computers in these spheres. It may not be the best idea to go be the kind of doctor or lawyer that technology might render obsolete.
There is a corner of the health care industry where rancor is rare, the chance to banish illness beckons just a few mouse clicks away and talk revolves around venture deals, not voluminous budget deficits.
Welcome to the realm of Internet-enabled health apps. Politicians and profit-seeking entrepreneurs alike enthuse about the benefits of “liberating data” – the catch-phrase of U.S. Chief Technology Officer Todd Park – to enable it to move from government databases to consumer-friendly uses. The potential for better information to promote better care is clear. The question that remains unanswered, however, is what role these consumer applications can play in prompting fundamental health system change.
Michael W. Painter, a physician, attorney and senior program officer at the Robert Wood Johnson Foundation, is optimistic. “We think that by harnessing this data and getting it into the hands of developers, entrepreneurs, established businesses, consumers and academia, we will unleash tremendous creativity,” Painter said. “The result will be improved and more cost efficient care, more engaged patients and discoveries that can help drive the next generation of care.”
The foundation is backing up that belief with an open checkbook. RWJF recently awarded $100,000 to Symcat, a multi-functional symptom checker for web and mobile platforms. Developed by two Johns Hopkins University medical students, the app determines a possible diagnosis far more precisely than is possible by just typing in symptoms as a list of words to be searched by “Dr. Google.” Symcat also links to quality information on different providers and can even direct users to nearby emergency care and provide an estimate of the cost.
Over the 11 years I spent building the network at Epocrates, I learned a lot about physician behavior, motivation and the use of incentives. And while influencing nearly 50% of U.S. physicians to use a product requires that it meet a true need, fit into their workflow and be extremely easy to use – building one of the most trusted brands in healthcare goes beyond the product. It’s about being fanatical about understanding your users, engaging them at the right time, helping them support you and ultimately creating incredible loyalty.
Though we had a very analytical approach to user acquisition and brand strategy, I want to focus this article on something more fundamental – behavioral psychology. Truly understanding not just physician behavior but human behavior was core to the business at Epocrates and permeated throughout our business, marketing and product strategy. We focused early on in engaging physicians as consumers – B2C rather than B2B. Though a significant percentage of MDs are characterized as “small business owners”, we saw them as consumers first – hence, understanding human behavior, motivation, and influence drove product adoption and usage.
I was reminded of this recently listening to Dr. Robert Cialdini, speak at the 4th Annual Consumer Medicine Summit. If you haven’t read it, “Influence: The Psychology of Persuasion” is one of those dog eared marketing “bibles” that has remained on my shelf for years because its lessons on how to influence people are universal and timeless. In fact, I made it required reading for some members of my team. (Future postings on other favorites such as Nudge and Predictably Irrational, coming soon!).
As an ever increasing amount of money seems determined to chase an ever greater number of questionable ideas, it’s perhaps not surprising that inquiring minds want to know: (1) Are we really in a tech bubble? (2) If so, when will it pop? (3) What should I do in the meantime?
I’m not sure about Question 1: I’ve heard some distinguished valley wags insist we’re not in a tech bubble, and that current valuations are justified, but I also know many technology journalists feel certain the end is neigh, and view the bubble as an established fact of life – see here and here. The surge of newly-minted MBAs streaming to start-ups has been called out as a likely warning sign of the upcoming apocalypse as well.
I have the humility to avoid Question 2: as Gregory Zuckerman reviews in The Greatest Trade Ever, even if you’re convinced you’re in a bubble, and you’re right, the real challenge is figuring out when to get out. Isaac Newton discovered this the hard way in the South Sea Bubble, leading him to declare, “I can calculate the motions of heavenly bodies but not the madness of people.”
I do have a thought about Question 3, however – what to do: reconsider digital health — serious digital health.
Here’s why: Instagram and similar apps are delightful, but hardly essential; most imitators and start-ups inspired by their success are neither. It doesn’t strain credulity to imagine investors in these sorts of companies waking up one day and experiencing their own Seinfeld moment, as it occurs to them they’ve created a portfolio built around nothing.
When I’m not writing pieces here, my “day job” is working with healthcare providers recognized as Disruptive Innovators who are reinventing healthcare and slaying the healthcare cost beast as a byproduct. In some cases, these are entrepreneurs. In others, they are pioneers within existing healthcare providers.
Even though this is the month that the Supreme Court is supposed to rule on the constitutionality of Obamacare, it is striking this fact rarely that ever comes up in discussions with healthcare providers.
Philip Betbeze described this in a HealthLeaders Media piece entitled “Disruptive Healthcare Innovations Trump SCOTUS Worries“ when he asked senior executives about their perspective regarding upcoming the Supreme Court decision.
But when you ask one question, you might get an interesting answer about something else entirely. That’s the way my sources for this off-the-record conversation surprised me. They agreed they are much more concerned about disruptive innovation than what nine people in black robes are going to say at an indeterminate date sometime this month.
The roundtables, set up for me by the good folks at Premier Inc., which is holding its annual “Breakthroughs” conference here in Nashville this week, revealed that these leaders fear less what the government may do in response to whatever decision the Court makes, and more what nontraditional competitors may do to their resource and capital-heavy healthcare delivery systems.