The digital health movement has spawned so many solutions, which makes the process of innovating in the space more chaotic than ever before. How do we rise above the noise to create awareness and demand for our innovations? How do we make ourselves more appealing to venture capital? What are the biggest healthcare myths innovators should stop buying into?
On this episode, healthcare industry consultant, and venture capital partner, Lisa Suennen shares on how innovators can overcome or work around the challenges that come with commercialization.
3 Things We Learned
Regulation and information are a huge barrier to successful commercialization
There’s an imperfect marketplace and a disequilibrium in the sharing of information in healthcare. The patient has no information, the providers have less than they need, and the payers have the wrong kind. Additionally, healthcare is heavily regulated, and regulatory expertise, which many innovators don’t have, is critical.
Focus on numbers to appeal to VCs
Venture capitalists would be more willing to invest in people who really know their numbers. It’s less about telling them a story about the innovation, and more about showing its financial viability. But don’t jump into venture capital too quickly. If we get too far ahead with raising money but we haven’t done enough to validate our concept, we will waste money and give up ownership too early.
Understand how compensation works in healthcare
One of the biggest mistakes innovators make is not appreciating how payment moves through the system, and how many hands an innovation passes before it gets to the patient. Going direct-to-consumer is almost impossible. It’s hard to get a patient to pay out-of-pocket for something they expect to be covered by insurance.
There is a noise in healthcare right now, and while there are opportunities for big companies to work with, invest in and partner with innovators, there’s also more chaos. If innovators want to succeed, it’s important to understand how the system is set up. Financially, the incentives of the various players are not aligned in healthcare. Patients, providers and payers are financially at odds. On the regulatory side, innovators have to become knowledgeable about the rules that govern innovation, and buying cycles are long so we need to be patient. To succeed we have to be clear on who is going to pay for our innovation and why. We have to come into healthcare innovation with the mindset of a coalition builder, because it’s impossible to succeed going in it alone.