This sponsored post is produced by HealthTech Capital.
HealthTech Conference 2013 was bustling with energy with “an all-star lineup” of the leading minds in the healthcare industry. The sold-out event demystified the tectonic shifts in our healthcare system and identified specific actions that startup companies must take to be successful.
Big takeaway: The healthcare industry is being disrupted in a massive way, and 16% of GDP is being turned over, creating a tsunami of opportunities!
Overcoming challenges to build successful healthtech companies
The conference emphasized the need for collaboration between healthcare systems, payors, suppliers, entrepreneurs, and investors around emerging opportunities for healthcare innovations. Some of the key takeaways included:
- The existing Gold Rush towards quickly deploying new digital health solutions is repeating the mistakes we made during the dotcom years — focusing too much on building a demo to show off the digital technologies instead of building a proven value-added solution that a lot of people are willing to pay for.
- Entrepreneurs often develop a technology without spending enough time defining the pain points for all the stakeholders involved. The winners will create total solutions that benefits physicians, patients, and the ultimate payors.
- Existing care delivery is not sustainable for both the hospitals and physicians. New models will emerge that deliver care wherever patients are: at home, at work, or at the mall.
- New data created must be liquid and easy to integrate with other health information systems from mobile systems to hospital EMRs. We do not need more data silos. And don’t forget to ensure HIPAA data compliance for security and privacy requirements.
- Data only has value if it becomes actionable with proven impact metrics on the subpopulation that needs to change. For example, digital technologies that enable aging at home need to address seniors with different technology skill sets than they would use to address younger consumers.
The HealthTech conference panelists offered direct advice on these needs and where they saw the fundamental changes and opportunities in healthcare:
“With regard to going direct to consumer, everyone is focused on the same set of marketing channels, much of it, digital. But what if your target user isn’t online, like potentially in the senior space. Your audience may not be accessible via Facebook or SEM/SEO tactics. I would challenge startups to look at brute-force feet on the street. There are door knockers, multi-level marketing, all sorts of more sales-centric strategies that could possibly be applied in this space.” – Michael Yang, Managing Director, Comcast Ventures
“If you really want to disrupt things, workflow gets thrown out the window. Something that used to be treated in the clinic is now being handled by the patient in their home. This is Henry Ford of healthcare. Re-engineer the process of production.” — Molly Coye, Chief innovation officer, UCLA
“There are a number of key issues to consider for startsup in health technology seeking to work with health systems. Can the startup assure information security and meet privacy requirements at the highest levels? For example, is the company willing to take any liability if there are data breaches? Can information from mobile technology systems be connected to a health system’s EMR data, versus requiring the use of independent dashboards and viewers? How will the technology be implemented within a health system and what will its impact be on clinician workflow? How does the technology fit within the business model of the health system?” – Amir Dan Rubin, President & CEO, Stanford Hospital & Clinics
“Digital Health Technology of today aimed for senior population often misses the fact that the elders of 75+ needing the most help aren’t quite there technologically. Entrepreneurs might consider enabling their alpha daughter/son first.” – Jack Young, Managing Director, Qualcomm Life Fund
“We are looking for solutions that brings the healing power of humanity to the way we deliver care, use technology, and create a better patient experience” – Rich Roth, VP Strategic Innovation, Dignity Health
Words of wisdom for entrepreneurs
There are significant opportunities to create large healthtech companies right now, especially in providing better productivity tools to the existing healthcare players. They have the money, but are hard to sell to due to their size, complexities, and the massive changes happening to their world.
Another massive opportunity is in creating new patient-centric tools and services, but building scalable revenue models is still a challenge for entrepreneurs. Also looming as formidable competitors are large retail companies with powerful branding and marketing expertise.
In order to successfully build new healthtech companies, it is essential to leverage three sets of expertise:
- Healthcare: Understand the complex healthcare ecosystem, stakeholders, regulation, and payment
- Technology: Adapt technologies to healthcare pain points to create innovative solutions
- Behavior: Modify user behaviors to create new delivery paradigms from doctors and nurses to patients
“Don’t confuse tools with competencies. Focus these competencies on the Triple Aim: better outcomes, lower cost, better experience of care, and the future will be knocking at your door.” — Gordon Norman, Chief Medical Officer, xG Health Solutions
“Anticipate what the investor is going to ask. If you haven’t thought through the unit economics, if you can’t answer fundamental strategic and financial questions quickly, it can really slow the process down.” — Frank Williams, CEO, Evolent Health
“Healthcare is not for the 1% entrepreneurs. Have to be all in.” — Kyle Armbrester, Vice President Business Development, Athenahealth
“For the entrepreneurs in the room, there are two key elements: first, follow the money by understanding all of the stakeholders and second, get a paying customer. GE has interviewed companies that have failed in partnerships and companies that have succeeded to design a pragmatic approach to help our partner entrepreneurs grow and succeed.” — Rafael Torres, Managing Director, GE Ventures
“Don’t come into a discussion without proof points for how something will work. Don’t mistake passion for outcomes.” — Brad Fluegel, Senior Vice President / Chief Strategy Officer, Walgreen Co.
HealthTech Capital was founded in 2010 as a unique ecosystem with accredited investors, venture capitalists, and leading industry players to provide these three sets of expertise to identify, finance, and mentor promising entrepreneurs. After we invest, we are not only active mentors but we open doors to providers to validate the entrepreneur value proposition and facilitate potential partnerships with larger corporations.
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