Perspectives on Working with Healthcare Systems for Digital Start Up Companies | Part 2

By | May 27, 2019
Brian Van Winkle
Shahid Shah


In this two-part series, we examine several common misconceptions made by health tech start-up companies in working with Health Systems and offers advice on how to recognize and address each. From approaching systems with a solution-first mentality to not understanding the context in which health systems work, we look to provide constructive criticisms meant to support more effective partnerships between health systems and digital tech solutions.

Perspectives and Reactions from the Industry

Understand the Current System Environment We Are Working In: In some cases, technology solutions are barricading healthcare systems inside.  In other cases, they are allowing us to seamlessly interact with other systems.  Typically, large healthcare systems have a combination of both. For outside solutions to be effective, start-ups need to be intimately familiar with the existing (and on-the-horizon) systems that healthcare organizations are using or contemplating.  Rarely will a solution not have to interact with existing software solutions – and this goes well beyond just the EMR. 


Have an Integration Plan: A stand-alone solution, which doesn’t tie to one or more of the healthcare institutions key systems of record (SoR) or systems of engagement (SoE) is a useless solution. Your solution should be able to stand alone in the first few weeks, as users begin to use it and get familiar with its capabilities. However, as soon as value is realized (not necessarily achieved), it’s crucial that your solution support either SMART on FHIR, FHIR, HL7v2.x, or all of the above. If you don’t have a believable integration story fully worked out, you’re not ready to launch into the health system market. Go back and do your homework.  

Having a Clinician Is Nice, But Not Enough: The physician, nurse, or other clinician on your team helps credibility but we also understand the incentives associated with selling solutions, and this takes away from the altruism you think we will blindly swallow. And they are rarely businessmen or women who understand both the complexities of solving a problem that isn’t theirs and starting, let alone, running a company. Pair an MD with an MBA? Now we’re talking.


Create a Balanced Team: If you’re selling clinically facing solutions, you need to ensure clinicians are on the product development team or senior product management leadership. Beyond the product, the value of a clinician is limited, unless the clinician on your team has been a department head with P&L responsibility, or significant budgeting or procurement experience. When building your “dream team,” combine sales professionals who understand the sales cycle with business development professionals who deeply comprehend the health system procurement process, and product professionals who know the clinicians’ jobs inside and out. The best product people may be your clinicians, but they need to be trained in design thinking and product management if they’re in leadership roles. The educational background and degrees your staff hold are generally not important (because they won’t be credentialed), but the skills they possess along with real-world experience across a number of facets is key.

You Probably Won’t Be Around in 3 to 5 years There is a harsh reality that we need to grapple with if we want to have a mature relationship with you.  You probably won’t be with us for very long.  Yes, we recognize that if you partner with us there is a much greater chance of survival, but our healthcare systems does not want to be the life support that keeps you breathing.  I’ve seen too many situations where healthcare systems “invest” in start-up solutions, only to have that solution not succeed elsewhere.  The result is a bad relationship where the two parties have become so reliant on each other that they can’t break up (the start-up for money, the healthcare system for sunk costs, not rational, and transition costs, rational). If healthcare systems were an investment firm (and indeed, some of them are), they would see hundreds of solutions only to pick a few.  Healthcare systems don’t have time for this, so are picking 1 from a handful at most.  This is bound to fail.  Because of this reality, start-ups need to not just show us that they will survive and thrive without us, but that if they don’t, that there is a logical transition to the next solution, and then the next.  


Have Failure Based and Success-Based Objections Health systems have reasonable fears about startups for many good reasons: questions around whether the solution can handle user requirements, whether the solution is high enough quality, whether the solution can scale to a high number of users, whether the solution can be integrated with the EHR, and so on. Most of the fears are failure-based – meaning, will the startup fail one or more of their promises? But, there are also success-based fears: if the solution works, will the company be around for a while; if the solution works, will the health system maintain the attention and receive the support it requires, and in case the solution works and the company disappears how will get our data out and be able to maintain the solution on our own? As entrepreneurs we’re often good at handling failure objections but we have to be great at talking about success-based objections. For example, you could offer source code in case the company goes out of business; you could offer extended support plans with third party integrators for attention, and you can offer an easy way for them get access to their data, rules, and other information they’ve put into your solution.

Pulling those numbers for you to prove your solution is harder than it sounds Healthcare systems are obsessed with data, indeed it is fundamental to research and demonstrating clinical efficacy for clinical approaches and interventions.  And healthcare systems are becoming more and more proficient at reporting and analyzing traditional metrics such as mortality rates, infection rates, prevalence of avoidable errors, among others.  But we’ve only recently developed the ability to perform deep trend analysis on large data sets (don’t think big data, think spreadsheets).  Traditional mechanisms for healthcare systems have been to rely on “Tracers”, the act of following sample random encounters through the health system to document whether the course of care was handled appropriately.  The point is, data analytics is an evolving competency and we are still just learning to crawl.  And data availability and analysis of the impact on new emerging solutions designed to improve access, efficiencies, and decrease operational burden is still new, especially when that analysis is on a digital technology. Start-ups need to understand that the data request they need to prove their solution sometimes is just not possible. Those data requests can be guides for long term goals to improve our analytic approaches or solutions.  For now, unless the system has a strong and resource analytics department, you’ll have to rely on what we have, an answer no one should be satisfied with*. 


Use OKR Decision Making Frameworks to Negotiate Objectives Health systems are obsessed with data, but sometimes they’re focused on the wrong kind of data: process measures instead of outcomes measures. The smartest startups these days build their products using the Objectives and Key Results (OKR) decision-making and operational excellence framework. If you build your solution with OKRs in mind, then you and the health system can negotiate the objectives (“O”) in general and specific expectations as key results (“KRs”). What’s nice about OKRs is that they are not subjective plus they require data-driven and evidence-based approach to understanding whether a solution is worthy of implementation and further expansion (scaling). Instead of using time-based roadmaps and implementation schedules you should negotiate objectives- and accomplishments-based roadmaps and schedules. With strict actionable and accountable accomplishments described as OKRs for both the health system and the startup, the solution can be far easier to build consensus around and get the permissions necessary for deployment.

* we know this answer flies in the face of a system’s need to see impact on clinical outcomes. this is the elephant in the room when digital medicine collides with the need for clinical rigor


While it’s important to know how healthcare systems think, and what might resonate with them, it’s just as important to maintain your independence in thinking and approach.  This is what makes you so valuable.  Indeed, other industries have already benefited from “fresh” thinking approaches, and it’s well known that Healthcare is in desperate need of this infusion of “other side” perspective. While just a small step, we hope our perspectives can help you know how healthcare systems think. But just be careful, we wouldn’t want you to start thinking like them.

Brian Van Winkle, MBA works with clinicians and health systems to tackle status quo thinking. He focuses on bringing the most innovative solutions and digital technologies to our hospitals to re-imagine how we provide and consume health. 

Shahid Shah, M.Sc. is an award-winning Government 2.0, Health IT, Bio IT & digital Medical Device Inventor & CTO with over 28 years of technology strategy, architecture, engineering, entrepreneurship, speaking, and writing experience.

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