Healthcare technology has made tremendous strides in recent years. But some health tech startups on the path of innovation can take a wrong turn, resulting in costly failure. Just ask Robert Hutchins.
Hutchins, cofounder and chairman of BioFortis (Columbia, Md.), a provider of medical technology products, recalled a company that had scrapped work on a product to help people with behavioral illnesses because of concerns that it would have difficulty competing against traditional treatments.
In another instance, Hutchins worked for a company years ago that developed a technology that could remind people to take their medicine by sending alerts via flip phones. That idea also tanked.
The lesson that Hutchins learned from those experiences was that you have to create and invest in health technology that only helps to solve a significant medical issue, but doesn’t necessarily shake up the industry.
“Don’t disrupt the infrastructure, but find out where the biggest pain is and put your finger in the dike to stop that pain,” he said during a panel discussion on healthcare innovation at the 2019 HealthCare Summit, held on June 11 at Fairleigh Dickenson University in Madison.
Hutchins added: “If you’re too disruptive, you’ll go bankrupt.”
During the panel discussion, other speakers joined Hutchins in offering advice on how companies can be more innovative in healthcare IT and on how startups can avoid missteps along their entrepreneurial journeys.
John Ulett, vice president and CIO at CentraState Healthcare System (Freehold), which operates one of the state’s few remaining independent hospitals, said that the CentraState Medical Center has a tight IT budget, but was able to acquire new technology by partnering with firms in NJII’s Health IT Connections program. Those firms are providing services covering “things we can’t do,” thus allowing CentraState to operate more efficiently, without incurring heavy tech expenditures.
Seth Tropper, digital innovation and strategy lead at pharmaceutical giant Bayer’s Consumer Health division (Whippany), said that his company’s approach to innovation is to figure out ways to deliver healthcare products and services in all areas of the business, such as research and development, manufacturing and supply chain management.
Tropper added Bayer is particularly involved in learning more about accessing data that will allow it to “get closer to consumers and drive innovation.”
While there always seems to be a steady demand for new ways to improve healthcare, tech firms launching products in this field need to sharpen their focus on areas “that are exciting and that [make] a lot of sense,” in order to drive customer demand or obtain funding from investors, according to John Hui, cofounder and CEO of Twiage (New York), an app for emergency-responder communications systems.
The speakers also suggested that tech entrepreneurs clearly say how their products and services will benefit customers and investors.
To give an example, Ulett is inundated daily with vendors’ jargon-filled email pitches about their products that often fail to identify the solutions they provide to a particular problem. “I want to see emails say what they are going to do for me — without all of the buzzwords.”
Hui agreed with Ulett, adding that startups need to do their homework and tailor their pitches to the prospects involved in the sale before approaching them. “Each time you talk to a different stakeholder, you have to have the right value proposition.”
Entrepreneurs also need to be concise and realistic when submitting proposals to investors, especially the valuation of their business. According to Hutchins, some startups drum up numbers that don’t accurately reflect the value of the business.
Sometimes, getting funding or new customers is just a matter of connecting with the right people.
Bayer receives a lot of unsolicited emails from startups, which are directed to a company portal. The challenge is knowing where and to whom at a company the emails should be sent. Tropper noted that Bayer is trying to be more responsive to startups by engaging with them through various outreach activities, such as working with tech startup groups around the world.
Another discussion topic was how healthcare systems, pharmaceutical companies and others are facing the vexing problem of ensuring patient data protection in this highly regulated industry.
According to a published report in the HIPAA Journal, a healthcare industry trade publication, there were more than 2,500 healthcare database breaches from 2009 to 2018, resulting in the theft or exposure of nearly 190 million health records, affecting roughly 60 percent of the U.S. population. Tropper noted that healthcare providers need to constantly weigh the benefit of using healthcare data for new drug development and medical research versus the risk of data privacy being compromised. “These are challenges that organizations have to address,” he said