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Most Common Health Startup Mistakes – and How to Fix Them

Every day, it seems, we hear about the launch of a new health startup. Whether founded by former health executives or by tech-savvy entrepreneurs, these pint-sized companies are driving massive innovation across the entire healthcare system. According to RockHealth, in the first quarter of 2017, there were 71 digital health deals totaling more than $1 billion.

From 3D -printed human heart tissue to treating pain using VR, these projects have the potential to let humans live longer, healthier lives. Yet for every startup that makes it big, there are plenty that fail.

Let’s take a look at some of the most common mistakes that lead these companies to extinction:

1. Poor understanding of the healthcare ecosystem

healthcare ecosystem

Health entrepreneurs might start with a great idea to help patients, but they soon realize that the person they want to address is not the one paying; large enterprises, insurance companies, and Medicare should be the audience.

They first need to learn how to navigate the complex ecosystem made of hospitals, pharmacies, doctors, manufacturers, and more. The fastest way to bridge the gap between concept and product delivery is by joining one of the growing science incubators created by heath giants thirsty for innovation. JLABS by Johnson & Johnson, for instance, connects promising startups with industry experts and venture capitalists across the U.S. and Canada. Resident companies get to maintain complete entrepreneurial freedom as they focus on scientific innovation.

2. A weak team

Startup team

Many small health company teams follow a similar pattern: a tech person, a product expert plus a sales and marketing wiz. That is rarely the right constellation of staff to help the team make it to the finish line. The missing piece of the puzzle? A Key Opinion Leader (KOL). This is usually an established medical figure with deep healthcare experience who can support their clinical value claims. This person knows the ins and outs of the industry and acts as an advisor. No amount of customer research can replace their knowledge.

Successful health startups have top-notch doctors, researchers and other thought leaders on their advisory boards. Dr. Simon Stertzer, the first physician to perform a coronary balloon angioplasty in the United States, was instrumental for the growth of several interventional startups. He is currently chairman of the board for BioCardia, a biotechnology regenerative medicine company that develops innovative therapeutics for the treatment of cardiovascular disease.

3. Ignoring data and customers

Ignoring customer data

Some heath startups are too eager to see their ideas come to life and spend too little time perfecting their product or understanding their endusers. Great companies think beyond single transactions to long-term relationships. They know everything about customer retention metrics and try to maximize customer lifetime value (CLV).

Data helps companies spot new behavior and identify trends. In fact, data analytics was identified as one hot area of interest for investors. Bay Area startup Gemini Health offers solutions for better electronic health and medication records. They’ve created an online ‘shopping’ tool that enables doctors to prescribe drugs tailored to a patient’s insurance plans. Before prescribing a medication, doctors can access a list of similar drugs and their out-of-pocket costs to see which one a patient can afford.

Other startups offering analytics solutions designed for pharmaceutical companies are also thriving.

4. They don’t have a go-to-market strategy

go to market strategy

Tech startups often crash and burn before getting their products to the market. Tech-savvy entrepreneurs are rarely great at sales, so while many manage to get their first round of funding, they don’t sell enough, run out of cash, and end up in major debt.

Figuring out sales is no small feat. Those companies that fail tend to follow a flawed process: build, launch, get feedback from customers.

To accelerate revenue growth, experts advise identifying a dozen very specific customers and talking to them about their pain points before investing months or years in development. This approach to testing a hypothesis is called customer development and involves asking questions about everything from product features to pricing to distribution channels.

5. Poor business model

business model

The ones that ultimately succeed steer away from a fee-for-service model and instead choose a fee-for-value business approach.  Forbes reports that as many as 98 percent of startups funded by angel investors fail because of a poorly thought-out business marketing strategy.

The best way to solve this issue is by partnering with an industry leader who possesses  the necessary business knowledge. One recent example? The alliance between pharma giant Roche and cancer tech startup Flatiron Health, which collects clinical data from cancer patients.

Startups will inevitably run into problems, but these tips can help them avoid some of the major health startup mistakes that send many small companies into bankruptcy.

$7.2 Million in New Funding for HealthCrowd to Improve Patient – Physician Communication & Care Outcomes

HealthCrowd, the industry’s first healthcare communications platform-as-a-service (CPaaS), announced on July 25th it had completed a $7.2 million round of funding led by TVC Capital, with participation from prior investors Startup Capital Ventures and Healthy Ventures, as well as others.

How to make patient-healthcare organization communication better

HealthCrowd is the first end-to-end engagement platform for healthcare. It provides support for healthcare organizations interested in unifying, automating and optimizing multiple forms of communication in order to deliver individualized patient oriented care. HealthCrowd provides a solution combining healthcare expertise and ad analytics. Its main focus is to engage patients, ensuring improved quality, clinical and financial better care outcome.

HealthCrowd’s Unified Communications Platform employs different technologies and channels  – text, voice, email, and nanosites – working in concert to drive members to action.

The company’s successful platform analyzes patients’ responses to various types of messages in order to learn which one works best with each particular patient, thus helping to improve health behaviors. Hospitals administrators can also adjust the system based on previous engagement metrics so that automated messages can be most effective at reaching specific objectives and outcomes.

This recent investment maintains HealthCrowd’s ability to deliver purposeful healthcare communications that encourage healthy behaviors and generate desired clinical and financial outcomes for its customers. HealthCrowd solution has been deployed to 26 US states across national, regional and local healthcare organizations.

In a 2012 piece analyzing the role mobile web, social media, and data can play in the healthcare industry, analyst and writer Michelle Snyder noted that, “while not as sexy as “social,” many within the healthcare system are recognizing the power of text messaging to not only reach the greatest number of at-risk patients but also to change behavior”.

As Snyder pointed out at that time, that results from Voxiva and HealthCrowd already supported the idea that efficient communication has a positive impact on a variety of measures, from prenatal care to immunization rates.

Results from Voxiva, HealthCrowd, and others in this space are showing the ability to positively impact a variety of measures from immunization rates and prenatal care to medication compliance.

Personalized communication works and pays off in the healthcare space

Time has only proven that messaging platforms are improving productivity in the healthcare space.  And HealthCrowd has invested early in direct messaging platforms by forming partnerships with various actors in the industry.  “We decided to partner with TVC Capital to accelerate our ability to transform the state of healthcare communications in the country to be on par with other industries”, Neng Bing Doh says.

These communication models work because the patient/provider relationship is a profoundly personal one. Although messages were initially only possible through SMS, they can now also be sent via voice, email and mobile web with minimal involvement from a healthcare professional.

HealthCrowd’s clients, primarily healthcare organizations, use its services to communicate with their members and patients via all available channels. These now include the newest types of chat, text messaging, voice, email and mobile web, adapted to every user device.

On a different note, The company’s business model is very different from that of its competition. Instead of billing organizations for the communication itself, HealthCrowd’ monetization model includes customers paying a fee for the convenience of communicating instantly with their physicians.  

‘Healthcare is a big market, but its complexities and nuances can make it challenging for companies to succeed. Strong product-market fit is paramount, and HealthCrowd understands how to bring products to market in this complicated ecosystem. The company has done a tremendous job of assessing and satisfying immediate market needs while laying the foundation for exceeding future customer expectations. For example, their application of machine learning is ambitious but at the same time immediately useful. What truly amazed me was the unanimous degree of enthusiastic satisfaction amongst HealthCrowd’s customers,’ said Mykel Sprinkles, Partner at TVC Capital in a statement.

‘We are proud to have built a strong and sustainable business.[…] The growth capital will allow us to make investments across key areas that are necessary to maintain our technology and market leadership. We chose TVC because of their strong operational expertise and track record of helping SaaS companies be successful,’ Neng Bing Doh added.

About HealthCrowd

HealthCrowd helps healthcare organizations unify, automate and optimize multimodal communications to deliver risk-managed member-centric engagement, at scale. HealthCrowd’s success derives from technology, service excellence, pride of ownership, member/patient navigation and activation, gap closure (HEDIS, STARS), retention, redetermination and any communication requiring an action be taken. This has a profound impact: HealthCrowd improve the quality of care via instant member/patient healthcare communications while providing significant cost savings to the health organization offering the service to its staff and patients. Predictive analytics, data mining and natural language processing techniques create durable successful platform IQ and EQ to drive rapid, measurable results. The company is based in San Mateo, CA.

Will Madaket Save Hospitals and Healthcare Providers $130 Billion Each Year?

Madaket Health, a cloud-based, healthcare SaaS platform solution has received $10 million in Series B funding in a round led by Qiming Venture Partners.  The new round of funding is backed by a few household name investing groups which include Experian Ventures, The PNC Financial Services Group, and Salesforce Ventures. The company plans to use this funding to clean-up the messy and time consuming payer – health care provider system.  

Better data transfer for hospital administrations, better care for patients

Madaket intends to expand its current solution to continue making data exchange between payers and health care providers faster and more reliable.

Ultimately, this will reduce delays in payments that can now take several months to complete. Getting paid in a timely manner encourages healthcare providers to work with certain payers knowing their services will be more promptly reimbursed.

Before we can understand how exactly Madaket intends to manage the administrative inefficiencies in the payer-provider system, let’s first explore the status quo and get a better grasp on  why the current ways of doing business need to change.

Credentialing & enrollment – the mandatory first steps for any health care provider to get paid

Payers are organizations with healthcare plans that providers join in order to become part of a health network. This way, providers gain access to more patients who can afford their care.

In short, a health care provider that works with a certain health plan – such as Medicare or Medicaid – is considered “in-network”. In-network providers typically are offered at reduced costs to plan members. This is important because patients typically choose these providers, in order to obtain better care at a price they are able to pay.

In order to become an “in-network” medical care provider, a provider completes two mandatory steps. The first is obtain the proper credentials; the second is to enroll in a program.

Credentialing, as the process is known, basically makes sure all the people working for a certain health provider have the proper qualifications required by their respective professions. These include proof that staff members have the needed training and education and have acquired the necessary skills to safely provide medical assistance to patients. When a facility wants to hire a new employee, it is the healthcare provider’s obligation to contact the “primary source” where the candidate was educated, trained and licensed.

It is not only healthcare providers that use the credentialing process. Insurance companies, prior to allowing a provider access to their network, also use credentialing as a way for providers to get validated in private health care.

What it takes to be a part of the game

Enrollment is another very difficult step for any health care provider who wants to be part of the medical market. Enrollment is the validation of a provider in a public health plan and the approval to bill the agency for services rendered. The process of enrolling in a plan involves requesting to join a health plan, submitting the necessary credentialing, acquiring and sending documentary proofs and confirming the contract.  

To apply for credentialing and enrollment can be a very lengthy process – Medicare and Medicaid typically take up to 120 days, while commercial carriers like Aetna and Blue Cross might take up to 90 days.

How is the Madaket solution addressing the cumbersome task to enroll and operate within a public health plan?

 

 

 

 

 

 

 

Now that we understand the complex bureaucratic and tedious space Madaket is trying to positively impact, let’s see how exactly they plan to do so.

We have already established that health care providers need to be enrolled with payers, otherwise, they rarely get paid. But what you may not know is that keeping track of all the payers is very difficult, because the average provider usually has to work with 25 different payers.

Each payer has to receive individual forms from an entity that wants to get paid, containing data and procedures in order to enroll the healthcare provider for Electronic Funds Transfer (EFT), Electronic Remittance Advice (ERA), Electronic Data Interchange for Claims (EDI), etc.

Madaket’s solutions – EDI Enrollment and Payer Enrollment/Credentialing – seek to transform the process of actually moving papers around by creating an automated, mutually shared digital payer-provider transaction. EDI Enrollment will encompass Electronic Funds Transfer (EFT), Electronic Remittance Advice (ERA) and Electronic Data Interchange for Claims (EDI), making all these operations easier for providers to access.

Madaket co-founder and CEO, Jim Dougherty, stated that this not only eliminates  massive administrative, time, and money consuming tasks  but also gives providers the possibility to better use their time towards taking better care of their patients.

“We brought our proven track record of removing waste, error, and frustration to an industry— healthcare — that spends $130 billion on unnecessary administrative tasks”, Dougherty declared.

One form helping healthcare companies streamlining their operations

Healthcare providers have a single task to perform within this new system: completing a simple online form. After the form is submitted, Madaket ensures the necessary and correct information is sent to each individual payer. This saves each provider from having to complete the same task as many as 25 times, saving countless hours and dollars.

This process, Madaket claims, will result in a considerable reduction in paperwork.  

Most importantly, though, it allows a faster transfer of funds to hospitals and other healthcare providers, as well as private practices. The Madaket solution has already proven successful and it is currently being used by  Trizetto Provider Solutions, one of the largest healthcare Electronic Data Interchange (EDI) and clearinghouse service providers.

To date, Madaket has processed more than 1.5 million EDI enrollments. These were done on behalf of clients who together reach 1.3 million providers that have already signed contracts to be enrolled on the platform.

How Technology Can Help Solve the Country’s Shortage of Nurses

The shortage of nurses in the United States has been an ongoing issue for over a decade. New federal data shows that the crisis is much bigger than previously thought.

Daily payroll records collected by Medicare from 14,000 nursing homes revealed that, over the past decade, these facilities had been inflating staffing levels of nurses and caregivers in reports sent to the government.

The practice stems from competition. The larger an institution’s staff is in relation to the number of patients, the higher the rating given by Medicare on its Nursing Home Compare website-an important factor in nursing home selection.

Until recently, these reports went unverified. In April, the government started using daily payroll reports to calculate actual average staffing ratings.

According to the new data, weekends are the worst staffed days at nursing homes.

The average facility had 11 percent fewer nurses and 8 percent fewer aides looking after patients on weekends than on weekdays. One resident told the New York Times that his facility turns into a “ghost town” on weekends.

The Centers for Medicare & Medicaid Services, the federal agency that oversees nursing home inspections, is working on making the ratings more accurate.

Patients’ general feelings of neglect are just the tip of the iceberg. The shortage of nurses in these living communities has serious consequences across the entire healthcare system. To list just a few:

  • Overwhelmed nurses often forget to turn bedridden patients, leading to increased hospitalizations from bedsores.
  • Short-staffing nurses also translates to more patient falls, late delivery of medication and even higher patient mortality
  • Thinly stretched nurses burn out
  • More code violations occur that can result in lawsuits

Nearly 1.4 million people are cared for in skilled nursing facilities in the United States. As more Baby Boomers reach retirement age (estimates show there will be 81 million patients in 2030), this number will only grow bigger.

As will the gaps in care.

Nursing homes and hospitals are struggling to recruit and retain employees. One of the reasons for this problem is that nursing schools have a hard time keeping up with the pace of demand.

In addition, hospitals tend to offer graduates better compensation.

Technology could easily solve the crisis in care.

Artificial intelligence is already assisting nurses around the globe. In Japan, for example, where the nursing crisis has reached even higher proportions than in the United States, the government turned to “Carerobos” as a solution. Japanese robots are literally taking the burden off human nurses’ shoulders by helping them lift and move patients. Some are equipped with sensors that alert the staff when a resident is in danger of falling out of the bed. Others, such as Sony’s Aibo robot dog, provide emotional support.

Carerobos are not cheap, but experts say the price will drop as these devices become mainstream.

The medical tech market abounds in more affordable options.

Amazon’s Echo devices and the Alexa app are becoming huge helpers to patients and nurses. Among other abilities, these digital voice assistants keep track of a patient’s health records and upcoming doctor appointments.  They can even request medication refills from the pharmacy or call for help in cases of emergencies.

Telemedicine is another overlooked tool that can help cut down on unnecessary and costly trips.

Initially met with skepticism, virtual video consultations are on the rise in the United States. Major health plans such as Aetna, UnitedHealth, and Blue Cross/Blue Shield offer online visits via provider networks such as Doctor on Demand, Now Clinic, American Well or MDLive. For less than $5o per session, patients can see a doctor without needing to leave home or the nursing home.

Other tech innovations that can boost standards of care include:

Finally, one factor that could reduce crowding in retirement centers is collateral services such as concierge nurses. These nurses check on chronically ill patients who otherwise would be institutionalized in ICU or long-term care facilities.

Some providers rely heavily on technology such as real-time location systems (RTLS). This platform allows nurses to find the nearest hospital with offering the kinds of life-saving equipment a patient in distress might need. In nursing homes, RTLS tells caregivers where troubled patients are and provides the location of the nearest equipment needed, such as wheelchairs or crash cars.

Technology can help the nursing community reinvent itself and regain credibility. However, empathy makes nurses irreplaceable and helps patients recover faster. In some ways, technology can literally free up nurses’ hands, so they can tend to patients in a more meaningful way.

Ambitious Start-Up to Drive Change in China’s Healthcare System

Healthcare start-up WeDoctor is on an ambitious mission to revolutionize China’s healthcare industry, attempting to eliminate bureaucracy and provide modern medical services in a sector that is often chronically underfunded.

WeDoctor is a mobile-based application on which users can seek a medical advice, book appointments, or speak to a provider directly. Platforms like WeDoctor are especially attractive to the Chinese healthcare market because, according to Reuters, “patients often queue outside hospitals from early morning to get an appointment.”

The solutions platform aims to create efficiency and promote transparency in an overwhelmed market by combining offline and online systems in an effort to reach customers directly.

 

Commercialization Drive

WeDoctor Market Segmentation

WeDoctor, founded in 2010, connects more than 240,000 doctors, 2,700 hospitals, and 15,000 pharmacies and allows users to submit their own information to the WeDoctor mobile app.

The data collected is aggregated demographically, providing highly targeted and lucrative opportunities for potential advertisers. However, in the age of heightened awareness of data privacy and security, WeDoctor is quick to emphasize that app data is anonymized and not shared with third parties.

Beyond demographics, the data is further broken down by affliction – the hyper-segmentation being the bedrock of WeDoctor’s commercial drive – advertisers are able to target patients in a subtle, if not non-intrusive, manner.

 

Surveillance Concerns

Unlike in most western countries, privacy laws in China are much more lenient when it comes to repurposing users’ data, which allows companies like WeDoctor (among others) to collect vast amounts of data for commercial application.

Because of these relaxed laws surrounding privacy and data, WeDoctor has the flexibility to build personalized profiles of all its users – a potentially rich source of opportunity for major pharmaceutical firms.

Despite the lack of intense government regulation, many patients are still averse to sharing their data online and prefer to see doctors in person, and this is where the start-up, backed by China’s own internet powerhouse Tencent, has been particularly innovative.

 

Optimistic IPO and Monetization Strategy

Even though the latest data shows WeDoctor valued at $5.5 billion, the start-up shows no signs of slowing and plans to use artificial intelligence and user profiles to detect potential health risks and ailments of its user base.

With over 1.4 billion people and a health market expected to hit $1.2 trillion in the next two years, China provides boundless opportunities for WeDoctor to find success with its direct-to-consumer business.

So, how does this innovative start-up make money? Not only does WeDoctor take a percentage of the fees assessed by doctors, but in early 2018, the mobile-based platform went brick and mortar, opening the doors to its first clinic in Hangzhou and plans to open six more, with Beijing and Nanjing in its sights.

The fully staffed clinics could be the beginning of the company’s strategy to becoming a one-stop health facility.

If that weren’t enough, the company sells speakers similar to Alexa or Google Home, through which users can contact their doctor directly.

 

Looking to the Future

In 2018, WeDoctor raised $500 million from investors such as AIA Group Ltd, New World Development Company, and Shanghai Fosun Pharmaceutical Group and is on track to be listed in 2019.

While the IPO has yet to be announced, WeDoctor is making preparations to be listed on Hong Kong stock exchange and in the meantime, WeDoctor has announced a strategic partnership with IDS Medical Systems Group Limited to create a medical supply chain solutions and procurement company, idsMED WeDoctor China Ltd.

Tech-Driven Solutions: Healthcare Innovations in the New Age

Patients and members are like everyone else in our connected world – they expect personalized communication and services. These customer expectations, along with rapidly changing regulations and technology, compel healthcare organizations to rethink traditional marketing.

Join Salesforce’s Chief Medical Officer, Joshua Newman MD MSHS, as he shares how a unified platform brings people, systems, and data together to transform the customer journey. See how industry trailblazers are customizing their engagement strategies to be more competitive, improve satisfaction, and empower healthier outcomes.

Patients and members are like everyone else in our connected world – they expect personalized communication and services. These customer expectations, along with rapidly changing regulations and technology, compel healthcare organizations to rethink traditional marketing.

Join Salesforce’s Chief Medical Officer, Joshua Newman MD MSHS, as he shares how a unified platform brings people, systems, and data together to transform the customer journey. See how industry trailblazers are customizing their engagement strategies to be more competitive, improve satisfaction, and empower healthier outcomes.

On-Demand Healthcare Economy

Patients used to go to a doctor’s office and then wait. Not anymore. Find out how doctors and caregivers can go to patients.

https://www.forbes.com/video/5238081865001/

Patients used to go to a doctor’s office and then wait. Not anymore. Find out how doctors and caregivers can go to patients.

https://www.forbes.com/video/5238081865001/

How FDA-Approved Devices Help Patients with Rare Diseases

The U.S. Food and Drug Administration (FDA) regulates medical devices to give patients timely access to advanced, high-quality medical devices. The Humanitarian Use Device Program, created by the FDA, offers a streamlined pathway for getting devices to patients with rare diseases.

The U.S. Food and Drug Administration (FDA) regulates medical devices to give patients timely access to advanced, high-quality medical devices. The Humanitarian Use Device Program, created by the FDA, offers a streamlined pathway for getting devices to patients with rare diseases.

Artificial Intelligence and Healthcare: What You Need to Know

Check out this fireside chat on Artificial Intelligence in healthcare, the complexity of dealing with multiple stakeholders in the industry, the AI ROI impact, and the differences between AI in healthcare startups and Big Pharma.

 

The yearly Applied Artificial Intelligence Conference is organized by BootstrapLabs, a leading Venture Capital firm focused on Applied AI, that brings together over 800 members of the Artificial Intelligence community for a day of incredible speakers and exciting conversations.

Some of the key takeaways from the session are:
– Healthcare can use a lot of AI adoption. Some of the current use cases other healthcare companies are experimenting with include: drug discovery & design, manufacturing and clinical trials etc.
– Only one in ten companies leveraging AI in Healthcare meet the requirements to have meaningful impact in the space.
– To convince executives to pull the trigger on these technologies, you need to demonstrate how AI will bring value to different complex stakeholders: hospital management, doctors and nurses, pharmaceutical companies and patients.

 

Check out the full talk above for more!


Speakers:

Dan Faggella, CEO, TechEmergence
Kevin Hua, Sr. Manager A.I./Machine Learning, Bayer
Carolina Garcia Rizo, Chief Business Officer, Just Biotherapeutics

Check out this fireside chat on Artificial Intelligence in healthcare, the complexity of dealing with multiple stakeholders in the industry, the AI ROI impact, and the differences between AI in healthcare startups and Big Pharma.

 

The yearly Applied Artificial Intelligence Conference is organized by BootstrapLabs, a leading Venture Capital firm focused on Applied AI, that brings together over 800 members of the Artificial Intelligence community for a day of incredible speakers and exciting conversations.

Some of the key takeaways from the session are:
– Healthcare can use a lot of AI adoption. Some of the current use cases other healthcare companies are experimenting with include: drug discovery & design, manufacturing and clinical trials etc.
– Only one in ten companies leveraging AI in Healthcare meet the requirements to have meaningful impact in the space.
– To convince executives to pull the trigger on these technologies, you need to demonstrate how AI will bring value to different complex stakeholders: hospital management, doctors and nurses, pharmaceutical companies and patients.

 

Check out the full talk above for more!


Speakers:

Dan Faggella, CEO, TechEmergence
Kevin Hua, Sr. Manager A.I./Machine Learning, Bayer
Carolina Garcia Rizo, Chief Business Officer, Just Biotherapeutics

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