Investor Skip Fleshman of Palo Alto (of course)-based Asset Management Ventures has six points of sound advice for founders and developers–and funders of same–who think that their Big Idea(s) are the one thing which will revolutionize healthcare, particularly because of their personal experiences. We’ve observed that successful startups have fitted themselves into the Healthcare Establishment’s game [TTA 19 May], but if an investor is still seeing that attitude, it’s still there. AMV’s track record is there with investments in several healthcare companies, including Proteus Digital Health and HealthTap. Mr Fleshman’s points with this Editor’s comments:
1. Listen to the market–and it’s not direct-to-consumer, despite a cursory reading of Eric Topol. Find where your product or service can reduce or avoid cost, increase engagement and improve quality i.e. patient outcomes (which are all linked, see #4)
2. Hire people who know how to speak the language–experienced healthcare people who can work the system but also get the changes and want to make a difference. And no, they may not look or act like you. They’ll often have gray hair and families. Unless they are independently wealthy, they also expect to be paid decently. Quite a few will be women who don’t act or look like you either, but are invaluable in your organization in multiple ways.
3. Understand how the money flows–and the money is with providers, payers, self-insured employers and (Mr Fleshman doesn’t mention this) government (Medicare, Medicaid, the alphabet soup of HHS, CMS…). The incentives (shared savings) are now to providers to pull cost out of their system but somehow maintain population health quality and outcomes. How to pull this off is where the innovation is needed. Partner wherever you can–and this Editor would add, with other successful early-stage companies as well.
4. Read the Affordable Care Act–with a bottle of painkillers and eyedrops. (more…)
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