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Tag: Startups

Startups: The Other Health Technology Revolution

These days my physician colleagues and I are up to our necks in a health technology revolution.  To be honest, its not as captivating as Pinterest or socially-engaging as a Google Huddle but to be sure your life will depend on it.  The revolution ushered in by electronic health record (EHR) is less about the technology than the widespread impact it will have on patient care.  Rather than digging through stacks of paper charts, your doctor will have ready access to all of your health history on a digital device.  And not just your health history, soon I will be able to combine it with the history of other patients in my practice: the digitized data will allow me to track the childhood obesity rate in my clinic and trend it over time with just a click (or tap).  But look out, there are glimmers of another emerging health tech revolution.

I recently attended the Health Innovation Summit organized by Rock Health, a seed accelerator for health startups based in San Francisco.  Coming from the bureaucratic and comparatively stagnant world of health care systems, this event made me feel like I could dream again.  Speakers provided pearls of wisdom for an engaging design.  Panels offered strategic advice to attract VC and Angel funding.  Most exciting was the chance to hear from entrepreneurs, each of whom offered their own incremental solution to improve health.

Take something like Cardiio, which measures heart rate in a few seconds by scanning your face.  Imagine how future related technologies could replace monitoring wires and tubes thereby improving comfort during a hospitalization and reducing hospital acquired infections.

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Context Is Everything

A few weeks ago, I had the opportunity to talk with an innovative company about a new product.  I make it a policy not to endorse any particular company or product on this blog, so this is not an endorsement.  Rather it is a fascinating story that tells us lots about human nature and gives us clues on how we should design healthcare programs, apps, etc. as we move into the world of patient engagement and accountability.  And we are moving there. Whether your focus is achieving meaningful use of your EMR (increasingly we’re going to be graded on how we engage our patients in this regard), the journey to becoming an Accountable Care Organization (as we enter an environment where we’re compensated for quality and efficiency, patient engagement becomes key) or simply that you realize that we don’t have enough healthcare providers to take care of all those folks who need it (in this case, patient engagement becomes a tool to give patients the opportunity to be their own providers, taking work off of our beleaguered primary care workforce), patient engagement is all the rage.

Right out of the gate, we health care providers have a big hill to climb.  We are the ones who remind you that you are sick. Who wants to be engaged with that?  Once patients get into the mindset of being sick, the context becomes pain, suffering, inconvenience, depression, time out of work, rehabilitation, and on and on. It’s no wonder that patients don’t engage much (other than the occasional masochist among us).  And the conversation immediately gravitates to whether insurance will pay or not. We’ve observed patients in our connected health programs who are happy to go to the sporting goods store to fork over their own money for a heart rate monitor so they can watch their heart rate during a work out, but baulk at paying for a blood pressure monitor to be part of a hypertension program.  After all, fitness is your own business, but when we’re talking about sickness your insurer owes you ….

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The Emperor’s New Social Network

You can’t get much cooler than HealthTap: slick Silicon Valley start-up, social media darlingsavvy and successful backers. But when you closely examine the service HealthTap actually provides, the money and good looks fall away. Like in the fable about “the emperor’s new clothes,” behind the buzz, there’s nothing there.

OK, maybe one thing: a really risky way to get medical advice.

Here’s how a Feb. 4 New York Times article described the company’s website:

[U]sers post questions and doctors post brief answers. The service is free, and the doctors aren’t paid. Instead, they engage in gamelike competitions, earning points and climbing numbered levels. They can also receive nonmonetary awards — many of them whimsically named, like the “It’s Not Brain Surgery” prize, earned for answering 21 questions at the site.

Fellow physicians can show that they concur with the advice offered by clicking “Agree,” and users can show their appreciation with a “Thank” button.

So far, so good. But there’s more. The professional credentials of the physician answering your question, such as a board-certified specialty, are not available on the site. Instead, you get a crowdsourced “reputation level” built up by accumulating HealthTap awards, by  clicks of approval from other doctors and by other measurable activities at the site.

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The Perfect Storm For Innovation

In my career, there have been a few perfect storms, defined as “a confluence, resulting in an event of unusual magnitude”.

When I was an undergraduate at Stanford University in 1980, two geeky guys named Jobs and Wozniak dropped by the Homebrew Computer Club to demonstrate a kit designed in their garage.   IBM introduced the Personal Computer and MSDOS 1.0.   I purchased an early copy of Microsoft Basic and began creating software in my dorm room including early versions of tax calculation software, an econometric modeling language, and electronic data interchange tools.   Every day brought a new opportunity. The energies of hundreds of entrepreneurs created an industry in a few intensely creative months that laid the foundation for the architecture and tools still in use today.   A guy named Gates offered me a job and I decided to stay in school instead.

In 2001 when I was first hired at Harvard, a visionary Dean for Medical Education, a supportive Dean of the Medical School,  talented new development staff, and a sleepless MD/Phd student came together to create one of the first Learning Management Systems in the country, Mycourses.   Robust web technologies, voice recognition, search engines, early mobile devices, and new multi-media streaming standards coincided with resources, strong governance, and a sense of urgency.  Magic happened and in a matter of months, an entire platform was created that is still powering the medical school today.

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Do Something Really Innovative In Health: Crowdsource Problems, Not (Just) Solutions

Businesses exist to solve problems, right?  Certainly, this is the heart of the classic entrepreneurial model: you become obsessed with a particular problem, and create a business to solve it.  Example: eBay was created by Pierre Omidyar to solve a perceived problem with inefficient markets, and since its inception has generally focused on doing exactly this.

Most enterprises are not blessed by such a coherent focus, at least not for long.  More often, organizations – including university research labs as well as for-profit businesses – have a point at which they realize that their challenge has changed, and the problem they thought there were going to solve has shifted or even completely disappeared.  The team – often an impressive group of people representing a wide range of capabilities — is then left to figure out what to do.

While disbanding is always an option, it rarely seems to happen, at least volitionally.  Businesses, projects, academic enterprises – all are obsessed with their own survival, which rapidly becomes the defining mission.  As a result, the organization urgently tries to figure out a way to pivot, a way to apply established resources in a different, useful way as it searches for a purpose to justify its existence.  Very often, the question becomes: what should we do – what problem should we solve?

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Nimble Medicine

In a piece for the New Yorker, Dr. Atul Gawande outlined how, early in the 1900s, more than forty per cent of household income went to paying for food and food production consumed roughly half the workforce. Beginning in Texas, a wide array of new methods of food production were tested. After many pilots, tests and information dissemination, food now accounts for 8% of household budgets and 2% of the workforce. As a wide array of small innovations ultimately led to the transformation of farming, so too is a rapidly building wave of innovative new care and payment models leading to similar breakthroughs in healthcare. I call this Nimble Medicine.

Until recently, attempting a new care or payment model meant long planning and development cycles. The cost and complexity of testing new models prevented many from being tried. Even today, the leading HealthIT vendor is known to charge $100 million and up for its software. Amazingly, they require three months of training before they even let people administer the software.

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The X Questions

Ten existential questions will make the difference between stumbling into the future and thriving

The questions have changed. The key strategy questions that the C-suite must be asking—and getting answers to—are different now than they were in the past, even from what they were last year. Most of today’s health care CEOs and C-suite leaders are missing many of the key questions they need to ask to drive strategy now, this year, this budget, in order to survive the next three to seven years. Which ones are you missing?

A New Mind-set

Today and for the next few years the weather of this industry will be dominated by pervasive, discontinuous change. Structures, revenue streams, relationships of every level: All are shifting in fundamental ways. Specifically, the weather will be driven by:

  • invention and propagation of new business models;
  • shifting risk onto both the provider and the patient, accompanied by building of new risk-based relationships, contracts and alliances;
  • smart primary care coming to the fore as the foundation of health care, driving most business models;
  • digitization and automation going wall to wall and beyond the walls—accompanied by powerful new info-capacities, from “big data” strategic analysis to new ways of reaching and bonding with customers; and
  • a striking new need for efficiency and effectiveness in response to rapidly rising demand as the baby boom ages, the baby boom health care workforce ages and disengages, and the newly insured increase their use of health care facilities.

Most of these factors, except the very last, are not dependent on the health care reform act, and will not change much if the act is altered or set aside.Continue reading…

The Entrepreneur’s Dilemma

Last week Steve Case wrote an Op-Ed in the Washington Post called Give entrepreneurs room and they will grow the economy.  For those not familiar with him, Case was the original founding CEO of AOL and he has been an active healthcare investor, among other things, for the past 7 years.  My firm, Psilos Group, is a co-investor with Case’s Revolution Health Fund in a health services company called Extend Health.

Anyway, it was a very good editorial and one of the statistics within it particularly stood out to me in light of my venture capital role:  firms less than five years old have produced 40 million American jobs over the past three decades–accounting for all of the net new jobs created in that period.  That is a pretty stunning fact and also one that really makes a person scratch their head about current U.S. policy towards start-ups.    It is worth watching this Kauffman Foundation 3 minute video which is very instructive about start-ups and job creation.

Nowhere is this issue more relevant than in the healthcare industry, which conveniently happens to be the only thing I know anything about.  In a world where there is no way out of the healthcare crisis except through the innovation of new ideas to solve our healthcare problems, young companies are the golden ticket to new employment.

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Demonizing The Demonization Of Physician-Industry Relationships

Monday’s WSJ (online now) features an exceptionally important and courageous op-ed by Harvard professor (and frequent co-author of mine, although not in this case) Tom Stossel, discussing a rule within recently enacted healthcare legislation with the Orwellian title, “The Physician Payment Sunshine Act,” focused on physician/industry relationships.

Taking its name from the assertion that “sunshine is the best disinfectant,” the Act apparently aims to help disinfect physicians who might be contaminated by industry contact, an interaction the Act seems to assume is intrinsically corrupting — in stark contrast, one suspects, to the many other activities in which physicians engage, and the many other factors in their environment that might influence their behavior, as Stossel and I previously discussed here and here; see here and here as well.

To restore physicians to their baseline state of virginal professional purity, the Act mandates a stultifying series of reporting requirements, impacting amounts as little as $10.  While such reports may be a Pharmascold’s wet dream, they are a logistical nightmare for the physicians involved, and serve to create an enormous compliance bureaucracy for everyone.

My recent experience at an innovation symposium at Duke University, as well as my frequent informal conversations with academic physicians at other leading institutes, suggest the increasing bureaucratic hurdles confronting university physicians seeking to strengthen the essential translational relationship between academia and industry are a particularly unfortunate problem, and are having the presumably intended effect of stifling these interactions.  Young physicians worry that the burdensome requirements are overwhelming, while senior leaders seek desperately to avoid the inevitable media takedowns predictably led by the NYT, public radio,  and the rest of the usual suspects.  (Not infrequently, these stories seem to originate with material selectively provided to a sympathetic journalist by a plantiff attorney — but of course, nothing cozy or sketchy here….)

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Listen to What Innovators Don’t Talk About

While working away on my laptop at a hotel breakfast, I couldn’t help but overhear the four gentlemen poring over an iPad two tables way. Their intense discussion revolved around rolling out their high-tech prototypes in a medical care complex. Since I’ve written about prototypes and prototyping, I couldn’t help but eavesdrop.

Forgive me.

The foursome represented a mix of medical care complex personnel and what was clearly an entrepreneurial innovator with a potentially high-impact idea. I’ll skip the technical details, but this was clearly a sophisticated group who were both smart and ambitious. The prototypes were their gateways to success. Their debates included whether it made more sense to field one or two more “finished” prototypes or whether they could get more information more quickly by fielding “roughs.” Were “staggered roll-outs” more cost-effective than “staggered builds”? They talked about the need to be able to “patch” quickly and whether their prototypes should optimize particular subsystems or overall system performance. They argued timelines and sequencing for test.

These questions are classic and it’s always fascinating to hear how — and what — decides them. Getting great value and insight from prototypes and pilots is more an art and craft than a science. Successful tech prototyping in health care contexts is particularly demanding.

That’s why the more passionately they spoke, the more nervous I got. Something was missing. Whenever innovators gather, I always listen for what’s not discussed. In almost 50 minutes of detailed discussion (yes, I am that kind of eavesdropper), I heard not a single mention, reference or allusion to the challenge of training the people onsite on how best to use or learn from the prototype. Details of prototype design and roll out were discussed as if the medical care personnel were irrelevant to the process. It reeked of “over the wall” technology transfer. OMG.

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