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9 Things Every Healthcare Startup Should Know About Business Development

By ANDY MYCHKOVSKY

In this post, I write down all my strategy and business development knowledge in healthcare and organize it into the top 9 commandments for selling as a healthcare startup. I think everyone from the founder to the most junior person on the team should know these pillars because all startups must grow. I should also note these tenets are most applicable for selling into large enterprise healthcare incumbents (e.g., payers, providers, medical device, drug companies). Although I appreciate the direct-to-consumer game, these slices are less applicable for that domain. If your startup needs help developing or implementing your business development strategy, shoot me an email and we can discuss a potential partnership. Enjoy!

1. Understand Everything About the Product and Market

You must also understand the competitive landscape, who else is in the marketplace and how they appear differentiated? What has been their preferred go-to-market approach and is your startup capable of replicating a similar strategy with your current team members? Also, do you understand the federal and state policy that most affects your vertical, whether that be pharmaceutical or medical device (e.g., FDA), health plans (e.g., state insurance commissioners), or providers (e.g., CMS)? For example, if your company is focused on “value-based care” and shifting payment structures of physicians to downside risk, do you intimately understand The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and the requisite CMS Demonstration Models from the Innovation Center (e.g., MSSP, BPCI-A, etc.)? Make sure you do or at least hire someone to explain what is important now and in the future.

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9 Healthcare Companies Who Changed the 2010s

By ANDY MYCHKOVSKY

In order to celebrate the next decade (although the internet is confused whether its actually the end of the decade…), we’re taking a step back and listing our picks for the 9 most influential healthcare companies of the 2010s. If your company is left off, there’s always next decade… But honestly, we tried our best to compile a unique listing that spanned the gamut of redefining healthcare for a variety of good and bad reasons. Bon appétit!

1. Epic Systems Corporation

The center of the U.S. electronic medical record (EMR) universe resides in Verona, Wisconsin. Population of 13,166. The privately held company created by Judith “Judy” Faulkner in 1979 holds 28% of the 5,447 total hospital market in America. Drill down into hospitals with over 500-beds and Epic reigns supreme with 58% share. Thanks to the Office of the National Coordinator for Health Information Technology (ONC) and movement away from paper records (Meaningful Use), Epic has amassed annualized revenue of $2.7 billion. That was enough to hire the architects of Disneyland to design their Google-like Midwestern campus. The other amazing fact is that Epic has grown an average of 14% per year, despite never raising venture capital or using M&A to acquire smaller companies.

Over the years, Epic has been criticized for being expensive, non-interoperable with other EMR vendors, and the partial cause for physician burnout. Expensive is probably an understatement. For example, Partners HealthCare (to be renamed Mass General Brigham) alone spent $1.2 billion to install Epic, which included hiring 600 employees and consultants just to build and implement the system and onboard staff. With many across healthcare calling for medical record portability that actually works (unlike health information exchanges), you best believe America’s 3rd richest woman will have ideas how the country moves forward with digital medical records.

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Health in 2 Point 00, Episode 103 | ACA Ruling, Sutter Health Settlement, & Bright Health

Today, I’m closing out the year of Health in 2 Point 00 from the ski slopes. In Episode 103, Jess asks me about the ACA ruling that the individual mandate is unconstitutional, whether Sutter Health got what they deserved after the $575 million settlement, health insurer Bright Health raising a huge $635 million round, and a rumor about a $250M Softbank investment coming next week. Wishing you all a very happy 2020! —Matthew Holt

Angels are Taking our Data

By ePatient Dave deBronkart

A response to Michael Millenson’s holiday song

Angels seeking Clouds to buy
But healthcare’s not like Spotify
My health data’s here and yon
Monetized by Amazon

Gloria, in excessive profits
Gloria, it’s excessive net cash flow

Investors, why this jubilee?
You’ve done naught to soothe our pain
No care’s improved nor costs controlled
My data just fuels cap’tal gains

Gloria, in excessive profits
Gloria, it’s excessive net cash flow

Silicon Valley come and see
Start-up births thy VCs sing
Come invest on bended knee
But health care’s not yet transforming

Gloria, such excessive profits
Gloria, just excessive net cash flow

Health in 2 Point 00, Episode 94 | Healthy.io, Smile Direct Club, and Period Tracking?

On Episode 94 of Health in 2 Point 00, Jess asks me about Healthy.io’s $60 million raise for at-home urine testing for kidney diseases, with the NHS on the hook & coming to the US, and Smile Direct Club going public with a $9 billion valuation—but quickly tanked (although to $7 billion). In other news, there’s a period tracker scandal with Maya and MIA Fem apps sharing sensitive data about women’s cycles and sexual activity with Facebook. Find out what Jess & I are looking forward to at Health 2.0 this week as well. See you there! —Matthew Holt

Health Innovation in Seattle & the Pacific Northwest | Maura Little of Cambia Grove

By JESSICA DaMASSA, WTF HEALTH

In the Pacific Northwest, “accelerator-slash-think tank” Cambia Grove is quickly expanding as the region’s go-to healthcare innovation hub. Fully funded by Cambia Health Solutions, the organization is functioning as a neutral party to bring startups and healthcare system incumbents together to identify innovation priorities. What else is happening in health tech in Seattle, especially with a few of those famous big consumer tech companies headquartered up there? Tune in to find out!

Filmed at the Together.Health Spring Summit at HIMSS 2019 in Orlando, Florida, February 2019.

Three Reasons Why 4 of 5 Digital Health Solutions Don’t Make It | Bram Van Leeuwen, Sanofi

By JESSICA DaMASSA, WTF HEALTH

4 of 5 digital health solutions won’t make it to the doctor’s office, and Bram Van Leeuwen, Sanofi’s Lead for Digital Innovation BeNeLux, thinks he knows why. Health tech startups (and their health system advocates) should tune in to find out how they can up their odds of getting their tech integrated into existing points of care. Are there any health systems in the world that have excelled at implementing health tech solutions? Bram’s picked some winners and is sharing best practices.

Filmed at HIMSS/Health 2.0 Europe in Helsinki, Finland in June 2019.

Hyperscaling: Startup Advice from Softbank | Sakshi Chhabra Mittal, VP Softbank Vision Fund

Softbank Vision Fund is a $100 billion technology-focused fund with an eagle eye on the tech that is poised to disrupt large markets, including healthcare. From hyperscaling to detailed advice on pitching, VP Sakshi Chhabra Mittal goes deep on what they’re looking for from startups, especially those that have closed their Series A and are looking for a B.

Filmed at the Frontiers Health Conference in Berlin, Germany, November 2018.

12 Rules for Health Tech Startups

By MATTHEW HOLT

Last week Mark Cuban tweeted out 12 rules for tech startups and Jessica DaMassa challenged a bunch of people to respond for health care. VC and general health care wit Lisa Suennen came out with quite the list (she got to 13) but I thought someone ought to write the real rules…

1. Never start a health tech company if you can sucker someone into giving you a real job

2. When VCs at conferences say raising money isn’t a problem, throw a milkshake at them

3. Never work with a technical co-founder who won’t give you the last M&M in the packet

4. When a clinician wants to quit their job and co-found with you, remember that the good ones could be making $500K a year reading X-rays and be on the golf course at 4pm

5. Do the 50/2 diet. Starve for 50 weeks of the year then eat and drink as much as you possibly can at HIMSS & JP Morgan parties when someone else is paying

6. When the incubator/accelerator/matchmaker says that they “chose you from 700 applicants” remember that there are roughly 700 of them and every company applies to each one

7. When you get the elusive partnership deal with the big hospital system, tech company or corporate, you’re going to expect to work at the speed of the startup and the scale of the corporate. It’ll be the reverse . (I stole this from Michael Ferguson at Ayogo)

8. After your first few clients and funding rounds you’ll be losing money at a exponential rate that matches what you had for revenue on the hockey stick chart in your pitch deck

9. Hopefully you’ll eventually be able to start making the money the health care way, by establishing a monopoly that can arbitrarily raise prices to the moon and stick it to your customers. If not, start prepping for the really big Oscar/Collective/Clover type round. 

10. Pray to whatever God you follow that Softbank is still in business when #9 happens.

11. If after a decade or so of slog, you finally get the IPO, or semi decent exit, try to ignore the fact that the Instagram guys sold for $1 billion 11 months after they founded the company

12. Hope that you can disrupt health care, but remember that UnitedHealth Group’s revenue is $220 billion and CMS spends $900 billion a year and they both appear mostly powerless to make anything better.

Matthew Holt is publisher of The Health Care Blog and advises startups at SMACK.health using these principles and a few others too!

Perspectives on Working with Healthcare Systems for Digital Start Up Companies | Part 1

Brian Van Winkle
Shahid Shah

By SHAHID SHAH, MSc and BRIAN VAN WINKLE, MBA

Start-ups are an increasingly important “node” within the healthcare ecosystem.  They are challenging status quo concepts that have long been ingrained in the healthcare system, like questioning the value of traditional EMR systems, or shifting the power of information to patients, or breaking down cost and quality transparency barriers. They may be the future of the industry, but startups have a long way to go to truly transform the system. The reasons are many, from an incredibly convoluted and bureaucratic review process and rigid risk-controlling regulations and policies, to the large-scale organizational inertia most of our healthcare systems have.    

And while all of these hurdles can and will be overcome if we work together, there are still several lessons each “node” in the ecosystem can learn to more effectively work with each other.  

This article is directed at the emerging digital solutions trying resiliently to help transform this stubborn industry. It provides some critical lessons in dealing with healthcare systems and is accompanied by reactions from a digital solutions expert with serial digital health entrepreneurship experience. We hope to provide perspective from two people living and breathing, and surviving, from both sides of the equation every day.  

Perspectives and Reactions from the Industry

Healthcare Startups Must Understand how Provider Systems Operate: Most health systems are increasingly becoming rightfully skeptical about new solutions because they feel the solutions don’t understand the environment of their system. To help overcome the challenges of introducing your innovation into a complex business and clinical environment, startups must understand how health systems operate to include how they make decisions, contract and evaluate solutions. 

Advice

(1) Recognize that Decisions are Consensus-driven and Permissions-based: Unlike other industries, where “shadow IT” is rampant and there can be one or two “key decision makers,” in health systems you’re not likely to get very far without figuring out how to build consensus among an array of influencers and then figuring out how to get permissions from a group of key decision makers. You should seek a “Sherpa” that understands enough about your solution to champion the idea of change – which is really what you’re seeking when you’re selling a new solution (the solution is just the means to accomplish the change, it’s the change that’s hard). The first thing to focus on is to identify the group of decision makers and how you convince them that the status quo should be abandoned in favor of any change – then, once you know how to convince them of some change you’ll work with the group to get the right permissions to work on the change management process – which will then influence a purchase of your solution.

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