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
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.
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.
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.
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!
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.
(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.
Those of you paying attention for the past few days might have noticed on the one hand a sense of optimism and unity as Barrack H. Obama, somewhat somberly, began his presidency.
Meanwhile, over the past few weeks the fur has been flying among the electrons on THCB while some very knowledgeable and opinionated health care wonks and geeks have been battling it out about what exactly we should be doing in terms of federal health care IT spending.
Given that even among you smart THCB readers this may be all a little perplexing, I’m going to try to try to make what I hope are some elucidating comments to put this argument in context. I’m doing this partly because I’m perplexed too, but also because I think that there is some hope for a middle road.
First the basics: As sometime THCB contributor & uber-CIO John Halamka makes clear in this excellent post about The Greatest Healthcare IT Generation, some $20 billion of the soon to be passed “spend it as fast as you can” stimulus package is going to be targeted towards health care IT. Now, that’s by no means the biggest part of the $800 billion or so package, and it’s not even the biggest part of the health care spending in the bill. Nearly $87 billion or so is going to support Medicaid, although that will mostly will be replacing cuts being forced on states.
Just a few years ago, you would have had to scour the show floor to find a startup exhibiting at the HIMSS Annual Conference. But, for the first time this year, they will have a major presence at this show that gathers more than 37,000 health IT professionals and innovators who are developing next-generation technologies. In fact, more than 200 startups will be on the floor at the inaugural Hx360 event taking place at the conference in Chicago– demonstrating the perceived ripening of the industry for disruption and the rising expectations of entrepreneurs and the investors supporting their efforts.
Drawing these innovators like the Sirens from the Odyssey is the newly empowered and often under informed consumer with their high deductible and array of chronic diseases. Healthcare provider organizations, payers and pharmacies must adapt to them and view them as actual customers not untapped wells overflowing with potential CPT codes. Now, more than ever, the industry needs to focus on quality experiences and good clinical outcomes for patients – and many startups are developing new approaches and technologies to tackle these issues. In order to make these new approaches a reality sooner rather than later, larger industry players need to understand the dynamic landscape, and work with and invest in these emerging companies. Incumbents with their large feet planted squarely on the traditional solid ground are sensing some seismic rumblings and how well they are leveraging and embracing these emerging companies to help maintain their balance may determine whether they can sustain themselves moving forward.Continue reading…
I hate to give away all the punch lines from my California Healthcare Foundation report on healthcare accelerators, so you will just have to read it for yourself. However, a few extra tidbits that didn’t make it in are here below (as you can imagine, I can’t be quite as Lisa-ish in a commissioned report as in my blog). Among my many discussions with a myriad of willing report interviewees (thanks to all of you!), I started collecting some funny stories that I have begun to refer to as Tales from the Accelerator Crypt. A few of them are here below for your amusement.
- From an East Coast Economic Development-Focused Accelerator: By far the worst idea pitched to us was from a company that proposed to prevent falls among the elderly with a vest containing an airbag whose deployment is triggered by EEG signals coming from a wearable computer brain interface. It’s probably obvious why this is so insane. Getting beyond who might actually wear such a thing around their home or to bed, can you imagine the number of erroneous deployments from the notoriously unpredictable, noisy EEG signal? If only they had made a video. That same week in the same city, I was amazed to be introduced to a rival company also developing a wearable airbag for accidental falls, but at least this one was triggered by an accelerometer. File under “You know wearables have jumped the shark when…”
- From a University Program in CA: The most awful pitch we had was from a clinician-entrepreneur whose answer to every probing question on commercial viability was “This is going to save countless lives.” It was his answer to every question, clinical to operational to financial. The most entertaining stage moment, however, was when a CEO of a company developing a ‘next generation’ needle-free injector did a live demonstration of his product by injecting himself with saline while up on stage doing his pitch. He unbuttoned his shirt, gave himself the shot and buttoned up again, claiming how painless it was. As he continued to speak, blood pooled and spread from the injection site, down his arm and across his entire white shirt. It was a slow motion disaster. He didn’t recover very well. Needless to say they didn’t win the demo day competition.
Startups announce new technologies to solve healthcare problems every week, but how much of these new technologies hit the public market and reach widespread adoption? Even more, how much technology gets adopted by key institutions that work directly with patients and deliver care? 6 out of 10 physicians reported that they did not use digital health technology for clinical purposes, including communication with patients and other providers and only 27% of physicians actively encourage their patients to use digital health applications, according to PriceWaterhouseCooper’s Top Health Industry Issues 2014 report. While many health systems are beginning to explore different avenues for innovation, some even creating internal departments to address innovation, many are still slow to adopt. As many as 36% of healthcare service organizations report that their organization has no mobile technology or innovation strategy.
Digital health startups, compared to traditional technology startups, have the additional burden of breaking into an established health care system before their solution can really gain traction. Whether it’s a hospital network, health plan provider or direct consumers, all of these groups want to see a product or service that has been validated. With so much activity in the digital health space, potential customers, especially large health systems, want to mitigate risk by purchasing a solution that has shown evidence of the benefits they claim to deliver.