Health Innovators
Health Innovators

Episode · 2 years ago

How to Understand the Ecosystem Around Healthcare Innovation w/Paulo Machado

ABOUT THIS EPISODE

Healthcare innovations play within a multi-sided market which adds a layer of complexity and difficulty a lot of other industries don’t have. What are some of the unique features of healthcare that innovators have to navigate? How do entrepreneurs balance between enthusiastic optimism and the realism of how the market works? What strategies can you use to beat the odds and maximize your ROI?

On this episode, I’m joined by the founder and CEO Health Innovation Partners, Paulo Machado who shares on his multiple level experience with commercialization and how to decrease the 95% failure rate of healthcare innovation.

 

3 Things We Learned

  • Healthcare innovators often have tunnel vision on their creation which is a mistake
  • It’s so important to have the ability to pivot
  • The difference between decision making in consumer and healthcare products

A successful healthcare innovation has to work within the massive healthcare system that exists. Innovators tend to oversimplify the problems and facets of healthcare, and come up with specific point solutions as a result. But if you neglect the larger ecosystem, your innovation won’t be good enough, even if it’s really amazing. Remember, healthcare products aren’t a normal good and you don’t just sell to one consumer. You sell to multiple stakeholders, who aren’t always aligned in their goals. Always design your innovation with the whole system in mind.

Welcome to Coiq and first of its kindvideo program about health, innovators earlier doctors and influencers, andthey are stories about writing the roller coaster of health care andovation. I'm your host doctor, Roxy Founder of Legacy, DNA marketing groupand it's time to raise our COIQ welcome back to the show Coiq listenerstoday I have Paulo Machada with me and he is a twenty year, veteran tons ofexperience, launching and commercializing healthcare inovationsand we're going to get his take on what why some health candivations succeedand why some fail and he's also going to share some strategies of how you canovercome and beat the odds of success and Maximizour ry. So welcome to theshow Paulo actally. Thank you very much for having looking forwth av theconversation with you absolutely so for our listeners, who don't know you justyet tell us a little bit about your background and what you're doing thesedays sure started off my career in the financial world. AAG O couple of traeEsen Solmon brothers shifted into the health kiper space workingformaceuticals for a number of years and then in two thousand and eight wentahead. AD decided to start at Manm consulting practice, focusing in onproduct development and design, is a SMODEL development in design and helporganizations of every sort of this o cossispactor from payers and providersto retailers to emerking tech companies, anvcs figure out how to basicallydevelop idivations ore. Goin Ao have a positive impact on our healthcirculavry system and more important than the Heltom ovie individuals.That's great one of the things that I think is really interesting about.Having your perspective on the show is you've not you've worked both in tertle and in the nuances of that, and thenyou've also worked as an external consultant, and so I think that thatkind of gives you a multilevel perspective to bring to our audience absolutely cut my teeth on the entrepreneurialside. Excuse me starting off on the financial world. I was always a personwhoas very intrigued by a large scale, inovation project in the organization,even back in the financial services days. When we'RE LAUNCHING NEW BUSINESSUNITS and Asian La America and follow that through Ti was in thepharmaceutical world, Lancho new business models, new products- excuseme in the US and broad awesome. So the first question that Ihave for you is what how would you describe writing the roler coaster ofHealthcare Novation? Well, that's a broak question. How would youdescribe it? I think it really depends on the individual for some peopleabsolutely terrify other people's incredibly exholerated and everythingin Beweeg. So it depends on where you are in the wide I'm getting ready forthe the moment of anticipation when there's Ha big drog yeah just believethat she made it through the drop it really. I depended on th yourframeworkyour experience, Tet and you mae. Don't go me rush that you enjoy yeap and I think you knowentrepreneurism is not for the fate of heart, so we probably have quite a fewlisteners that have high levels of dopomine that find you know the thewild ride, pretty exhilarating tobut, that's the case yeah. So one of thestats I talk about often- and you and I have talked about as well- is thisfailure rate. This alarming statistic that ninety five percent of invationsthat are brought to market fail to reach any adequate level of acceptanceor profitability, so so love to get your take on it. Why do you think somehealthcare innovation succeed and why some fail? Why ran O presons? Sometimes it US kindof start with the basics, understand the marketplace and really trulyunderstanding the need. There's AR quite a few people hove at induntryinto the marketplace and healthcare.

I've been involved in healthtredivation for bout twenty years now or acrossthespectrum with payers and providers and helping consumers figure out what whattheir needs are so to speak and healtr isn't a normal good. It's Franklly wbut.I think it is a negative good. It's not something that most people want to seeintins and consume. It's am wide rangee thing, my life, a poo, have avoidancearound and it is a t s a system so to speak it en design for fever servicehistoricliy. We were in the process of transforming from that a mith be muchmore focused on value. BACE care. What's happened is Wuth. This massivedoftor system that exists in portants is are basically people come into it,not peoeanwit. Look making I gift over simplifying the problems and when tocome up with very specific point solutions, but that point solution sitswithin a larger ecosystem and addressing on a specific issue may notbe enough and there's a tremendous amount of behebrial change. It needs togo so software is not the solution and every chings. Frankly frequently it'snot tesolution, it's just an enablent. If people come in and looking at theTho, that's a simple problem, we can make that happen, but the realchallenges it ends up being on because it is not a normal good and you can'talways Goo Directiv consumer effectively, Wi healthoon beingbehavior modification. It's the system thiss very hard to have systemic letelchange with simple software point solutions. So you see a lot oforganizations com in not understanding what is involved in MK. I significantchange, that's not to say that you can't make money solving a smallproblem and selling into another organizationis going to make it part oftheir God. Er. Offering? U and frequently, I think what ends uphappening is an my experience in being out there. Working with thestarters for well over decade. Now is that you fail to estimate truly theadoptoments and the imersiary in the system that exists, the piloving andthe testing in the proof that needs to be developed before become to Neweaterly adopted n. We don't have a system so to speak. It's not like youMaki decisions somewhere and everybody just adopted. If you want to sellsometh ascors, you have thousands of hospitals, you have to go a convince.If you want to Stell to Insurece, you have hunders of curge oements. If youWAN to sell to doctors, forget Forto goout there and epens onedock Ata time. If you want to stalk in Hesummers, even more challenging Becaus,you have to sell consumers in the context of how their decision makingfits in the context of all the other stat collers involv. I think there's amassive most overest, a rearly, optimistic on estimatesaround how adoption Wal look and the effort it takes. It's not just buildingasolution INS te Ygeti need to be adopted, even if it's the best solution.I think some unbelievably not amazing solutions. hise their doctrins takestoo long in Tyour run out of MOH. So so, what kind of conversations doyou normally have with? U, with those innovators to kind of help balance thisoptimistic enthusiasm? That's really like fuel to keep on going with this reality that we all live with yeah. I thinkthat the great question, because I think the realitie don't want to squashthe optimism because said that that is the youlhast going to keep peoplegoling through the night, and I think what ends up happening is o Yo need toreally get people to focus on the system. What is involved e Weany try tounderstand what is the problem? Beteen self, but not just what's happeningwith fat user, but every layer someery that user, so over time wit gym of s.If I sits directo in SI IFIT's a product like weasumer has to use. Howdoes that affect h? The doctors therare surrounded ate in we're trying to gethat fronto the Weit Managin progam out there, with filling many capaies, aredoing that Dianese management, yeahes Ataym of all the stat collers, are alsotrying to get that same consumer to do something similar, Tho Typical, Dadthati has...

OA wellness company reaching out tothem. They have their insurance insure ichave tha an emflorer program of somesort na Insurei a reaching out after docenting out thiyin. We doingsomething on ther wrowng, so they're, just a orage of somution thing, fom Oas a consumer definity for efusion. It's a noteret experience, Hepin people think about and design solutions that are not just fatherfocus, witholt Madsignmer, but isn't a sma on fo, ' in Tesigner D,understanding how it fits. I I how those to into Hact, I think, t en really UPSO Fel, like Becau e'r, Realy,successful, because they're going to understand the business model and thecontext Ilich Thos, specific point, solitions, arein, existent and, ofcourse, the last pieceis financially. Who pays for this stuff its quitefrequently what happens o? I where's this lack of understanding around the basic issue of most products in thewormal world, but the nine healthcare world. If I'm going to buy a phone inmthe person who decides what thats on is I'm paying for thatphone and I'm no possibl the user of that phone. So all three of thoseprimary functions sit in one person and frequently in healthcare. Those threedecision, pants most be walls, exist in different stake holders, with missalinebylingon sentence to understand, he's gonna pay for WHO's. I enside what getsused and WHO's actually going to use it to be very different issues that needto be addressed, and you have to think about that rete PRACC, Desi and figureout how the cash flows through the system. So it's not just a userexperience but is Tuff Finh antial flows, its the operation off lows, anth t has to touch it and it's the information. Plows O has to be aware of.What's happened. Yeah I mean you touched on it. You know it's amultisided market that I think adds a layer of complexibility complexity anddifficulty. You know to commercialization- and I find like youthat this is something that health care intivadors really struggle with. Is Youknow even just looking at a business model, canvas and and really mappingthat successfully with all market sides of the equation you know taken intoconsideration yeah. I think it's important to keep in mind it's beingaware of all these sides and hachinly the ones that you can tackle, AAnyfulcess to then say: okay, I can now go rase some capital. I can go from gofror, a pilot to a scale program for phase one and of launch with theirorganization and just iterate and learn and continue and fail. Then failure bythe way isn't necessarily a bad thing. There's a Trinsnot to be learned fromfilm show act more from thesit from success in manyways, thut onformacy,but itiis kin of keep that continuously brolly interated and keeping your eyebigger picture of what am I doing? How is it affecting other state, collersand who's going to be blocking me so for if I'm got and launching whateverDiabetes Management Program of some sort? Am I fighting that patience ifI'm going to irect a consumer through his employer, whatever channel O'r sure?Is that something that's atodds with the program that his doctor has SOMtrying to do? How does it have you overcome thatchallenge? So when you're, you know when you'reworking with a healthcare innovator? Where do you normally start in thatthat sequence of decision making a veen? Of course, it's going to vary to acertain degree of where they are in that commercialization or launchprocess. But you know what ife you found to be best practices around thatdecision tree that has to be made yeah. I think it's a we question inTycpiclayer, ie pervecto, the this model came as Abely Prockin Thi andhave I kind of walk them to what is their understanding, whatthey're actually trying to sell for, and they understand what's happening,wat the market level Yan understand a value proposition, that's involved withit at their various stakon levels and see where they like, maybe missingsomething and get not consieing that...

...there's some Maoo Hav to consider wherethe money's coming from WHO's. How Difficult Tet will be to get somebodywho pays for something to buy him, not just a consumer to use I consider wantsto use and the Piyer doesn't want to pay Owesen those happen, frecolling themarketplace, that being sad. What's fascinating, now tat I've been doingthis for a very long time is te markets. Aboll tremendous, like is become muchmore nsure about. I self awareness and yeah botto. These organizations harehave these various worles providing care or paying for care and theconversions of those pop. We caus seeing a lot more pay byers out in themarketplace an going, much more o vertical stack, UTI'm, driving andpovitation they're trying to get rid of he fection from the system at theprovider payer and consumer level, an you're, seeing much more maturity interms of how these organizations are thinking about the problem. More amostIly, but TOR cosseses because of issues of safety and security of data andreally being focused on quality product is behind their brand. If remember, oerlarge organizations and they have brands- and they just can't necessarilyshoot from the hip Wi not worry about failing, because they have to worryabout famiy EFFECTO, an they're cautiousand they'll tell you, itdon'l,take three six months: nine months a year and a half before a program canget to a opoint of skill to all of the hurdles they put ther for good reasons, buttypically you need a large warchest. This is where you yeah and thematuration by the way, also I'm thinking about investor community,which you link back you kno ten iteen years ago, an start getting involved inthis marketplace. Investors, Wese Wer, we're not aware of what's GOI on es us a lot ofmoney, throwing just ideas, and then they realize wait a minute. This islike o taking two years until we getinkid reder out of this. Whathappened? It's a tap play right, I' com, its not flipping me at you, know,itwenty et in eighteen months, right to months hot. I think that that is changed, yeur,backhe, H, majority of investors. I think age mether very aware. What'sHappeng Tin Marcet, they understand the huwles. That being said, an a they having lostteshirts on quite a few that wase ninety five percent go. Yeah is quiitmore bt, Al Risk Toeswe a much more evidence, the things that the thingsare warting before they fel Mon ehave. It tesless true brisk capital on theMarket Pos. So it's interesting to Masa Tha. Finally, Evolution Tur, you know, depending on what type of innovationyou're bringing to market. You know you could be talking about a clinical chial.You could be talking about. You know some pilot studies. You know we've talked about this beforethis whole idea of death by pilot and kind of getting stuck in pilotpurgatory when you're working with innovators. You know kind of share someinsights with our audience of you know what do they need to look for or to bemindful of when they are first negotiating that Pilo agreement to makesure that they get the success tor the results that they're looking for at theend, yeah othat's a unbelievably important series of decision Ito anything made inFranklin Choosing Thei wrong, pilent defends on how dets, but o Whit yourOrjestin Moe Lat's, like O, Cos yeah e. You have some time picking the rightfirst pilot or Qo or absumely central and frequently you'll, find people justdon't think thou what it's going to take on what their hurdle can be.becaue those first couple hi stuff in running Ho he to an pilot and thatfirst litlemor question. They won't be able to do anything else and Kno, noone there trying get one pilot time so having no lie pilate partners. An thefirst is absolutely critical and just asking like questions: Amoun Amignmentof expectations, Himin resouoces roles, communications, cash with emvalfrequoning, a SI multibuilion dolar revation Ginto, do a pilot of tinycompany and Ho, basically something I...

...don't want to Ta anything. That'spainful for Osation Ha feane capital to nat at les a Er Coscon Yeah that it'salso a proof point to investors, and these guys only who want to pay for apilot. Much less a scale O hic just becomes challenging so checklist of questions and having veryopen communications. I'm also very UNINTO, creating up significant Alin around the fact that,where you are in the life Sempe mutipy are you in co creation, MOD and you're?Looking for the highe states, gamblers and people who will drive and want todo that corporation with you and thats Ar ther eses yeah organization, thatonly THAs pilots and later doctors they're not really running a pilotthey're running the first plage or something who's already proven soreally w feel good program. That's okay! You want it! It's adifferent kind of pilot. It's not a CO CREATION PILOT! In that case, in USpicking the tire between that organization, its Wis teverse and thespecifics that I may need too, and the new show within my Probam Ma to me tofind ton to fa your organization, that's mot of a customization on boarding, a program versus a pilot.A true pilot, in my mind, is when you're not sure what the results are.You have a hypothesis ou on the test. You found somebody who wants to test itwith you and literally going to learn some this with you and they're in forthat e understading one is that we're actually doing together? You know truepilot is critical if you're just basically saying hey my poot, my I nowproven this. I've got white papers and everything else is rease. I want to doa pilot. I don't think of that is the pie right. In that case, all Bil iscustomizing the program before ou you go for lauch, Yep Yep. Absolutely youknow one of the things kind of you know, taping off of what your said was thatyou know a lot of times. Health. Innovators think that oh I'll, just useCleveland Clinic, for example, Cleveland Clinic, said Yes to my pilot,like that's like the Holy Grayl, and I think that sometimes you know it seemsas though that that might be the right pilot because of the brand recognitionit kind of gives you some Kudos that you might be able to put on yourwebsite, and you know your pitch deck and and whatnot. But you know in theconversations that I've had in in my experience, that can actually be adeath sentence and it's not Cleveland plinics per se. But it's more of youknow some of the more prominent bigger organizations that can be just a realresource, train kind of like you described, and I might have moresuccess with some of the smaller, no name entities. What are you thoughtsabout that yeah? Clearly branding matters if you're going to go out NSOsome of the big brands that are after and the health cure, systent in TAhealthcare world and say we God, a Patot with Xiz and somehow you Surviv,the Gotlan of getting Ini e Aight, already knows what that means. Thatdoesn't mean you can't hit a lot of signals and doubles posiions that havea higher risk talents and appetiting frankly, can move a lot fastfer andthey're more focused on cocreation withoer, not that the largeorganzations can't have tha cocreation mindset. It just takes a lot longer.Typically, in my experience to go from, we had the first conversation, so weget a result. It's then marketable somewhere else, working with thoseorizations. Frankly, they also are very sadly as it relates to well. Do Ireally want to lunch this and get Tis to put Bein my competitors fand, sothat it brings a more complexity in the designef, the pilots, expoivity andthings on that sor. It start to get kicked into the conversations itcan be very enticing for somebody O'scoming out of he game. When e hear a big frand say hey, if you consider toBei explicit with me, not thinking, okay, well, that what does that reallymee from the finas and a lot of this is just not really relevant if you're talkingabout people who've been around the block and built organizations andexperiences themselve a that for a second or third tour of duty. In thatcase you know they basically start startup and health caries, like man,Mon and crack for these people, you're...

...addicted to it and Tyou can't stop.Even though it's a icletibly painful process, because there are a lot ofrewards here, wi he pl migan. It makes a big difference in that's what I findis competibly rewarding for innovation and healthcare you're, seeing a muchlarger influx of people into health care and so yo Tor twelve years ago,into the inovator side and building organizations up from scratch that werenot inhelter. Before and theyididnt hat purpose we had e Ilevation Thay hadbefore Sowoul you find in healthcare. If people come in and theyre, and theytalk to me about this- is so different than my own job. My old job, I wasdoing XYZ and e my home N. is it didn't really matter and heare people feellike they're on a mission and hey notice? Quite a few orizations Ting it's because they had a personalthingin that card te, situtid their life and they're, driven in fuel by wow.That shouldn't be. That way. Is there something I coun do doesn't happen inmost other inthestiies yeah yeah, I think you're, so right so so kind of speak. To let's say you had three three recommendations or suggestionsaround strategies or tactic. You know best practices or lessons that you'velearned along the way. Number one is find the right people todon his adventure with so team is absolutely critical. Youyo have totrust your as e enough more time with these people than anybody else. Inthose early years, a Getn, Yeu someting running so alignment of values align evision, alignment of everything that matters that reallistoworking with somebody can you have fun together an answer he can you? Can youwork towhat's, Toman goals and objective, because if, if that happens,if this is happening, internal Ho's, con of lict internally, it justdramatically Recisi Hejucis elike gito success finy. So that's one UN of cofenders and initial small potof people who reun on Amission yeah. The second is really bee, really clearand a lign of what's your Aditional miition out of the block and make surethe whole team jets Im, you understand the problem. This go over bit. Howlarge is the market potential? What are the issues you're trying to DDRESS inmark e place, understanding who's, addressing those issues now who ere theblockers who's? The direct competition try to solve ut now versus those aregoing to just black it by their inertia and being the marketplace an much indoea fat, son Bin, the clear on that on that compolen, Bott and, frankly, notbeing stuck to it, because the reality is once you get in you're, going tolearn that hey that that's not really exactly what we thought it was going tobe. How do I pet it so being willing to have that curiosity and th beingmindful of the fact that we may not have the right had possisy for testingin the marketplace and thenit in you? I just want to pause for a second,because I think that that is a huge point and you know we just cannot sharethat message. Frequently enough. You know that we kind of really have tolet go of our static point of view and position around who what how, when andwhy, if Yeu, want to be able to have a successful business, and you know a lotof times, people ask me, you know why do you think that failure rate is sohigh and I think what you just described is one of those top reasonsinteresting. I always think t Wenk we're so: Okay with miio viable pronect,an inherating around the product level, but at the company team and otherlevels, individual level we strare all with that as a concept Bason Ecooobisis on what we know istrue, but if it's not working, then how do you confider and still still Emanetruyor value? It's right Ar with your itrations, you have tokind of make that trade off. So ideally, you rea have a positive impact on thehealth car, the livery system and everything else. Thats needs to beaddressed and Nver just tiio Phacis, not right right, yeah. Some of thethings that I think you're describing...

...really to me kind of bleed outside ofwhat might think of as like commercialization strategy and go tomarket strategy and really kind of bleed into more like the leadershiprealm and discipline- and you know, I think, that's something to that.Sometimes I come across innovators that think about like oh well, that's like astage to stay face. Three thing: You know like I'm, really I can't focus onbuilding my culture and you know communicating values and mission rightnow like I really just need to get this off the ground, and I need it. You knowget those first customers and and really not understanding that thecultures being created, whether they do it intentionally or not, right. TheCALTUR IS CREATV by esign ar not by Te Line by the BIEand a lot of the issue of culture. It's also not just your internal team, buthow do you pick the wihte external partmers and customers, because ththere's quite a few organizations, if you think you wrapped up and aralinenecessarily it you wer your values, ae and that's really important, not everall customers an Nasnie yeah. You know that kind of makes methink of. You know that idea of are we a fit, and you know again kind of likewhat you were talking about before I'm an Innovator, I'm an early stagecompany, I'm so hungry. Every seems, like everyone seems like it's a fit.Instead of really having like that criteria of you know, kind of like the first date scenario is: Is this partner? Is this comyouknow customer? Are they really a fit for our organization and being willingto say no Yeahan obvious ly easy to sed theRealiti? It totally depends on how well resource you are you're, Gen t moredesperate. If you haven't found e the right partner customer near and you gotsix months of Buron right, so ajust Gota Bunchj got a bunch of money. An Igot two years to go, so you can yeahwitl lit more detarting Shoin, justbeing keeping inn the back of your mind and with making sure you understand thetradeoff and thes cients can take the PRODUC o a patic. You know wanten to goyeah, absolutely also very big, res Jus. To make me sure the find don't don'ttake the FIHE OT face you. Don't you not co yeah, absolutely where it's justoverdeveloped in that particular customer loves it, but but it's notviable for anyone else. Yeah and I think Ju's having a clear strategywhere we had and understandng how the tactics, Giln and boing that Ti to showthat these tactics are si e wite ones, because sometimes we have a hypotispeve metir to either way ones which I'm heading n. The right direction,strategicfun in the realite do may not be gain not being stuck with the Metris.If you have in place, because some of them migh not be the right indicatorsand then you do Carlineo success, an they might not be Causalli likewenneeds to success at ther, Domin sure yeah, absolutely so we were. We weretalking about lessons learned and you shared two of them with us. What's thethird one that you want to share with our audience, yeah, the other is justbeing really aware: Selfaware, O yourself, UN the founding team. Howlong you want to be in the game like what is your real objective? Are youlooking to Bilder company and flip it and knowng yourself welth enough to nothave the ego in place where I have to take this from beginning to your end,because it's understanding what's my role in this an I, the idea, person anMi Tis, you guy, who gets the team together and Mi the guy ges a fundinwhen of the guys thoare seeit, all the way through Tipeo and frequently whacyou find is people hang on too on they shouldn't have and ego gets in thewaste of I speak. I just understanding. One is my role at all: Thits Ot am Itrying to accomplish. I turn to be all a big company. I is a lifestyle.COMETAN is Jist, Comin, get something going to start ing alltheway throughIPO and just being very clear with yourself and checking you ischyourselfas s okay, a I limiting this suxcess of tits organization, and I see somefounders are great- that stepping into...

...different roles as the other times.It's a real battle and truly in peace of five or seporaesetions. So ont callselt reflection, selfawareness and understanding that your wrong tey needto evolve as organizational needs involve igues. Have it th free year Hanna tenperson, Starte Aus, not the same a Scalinto, a thousand person company,its different, miss as different experiences and things of Thas, butyeah. Absolutely you know, I, I think that's a real hard one, O ther's veryze people in Mike Perens have the self awareness of where they fin in wherethe skill sets Ar, and many won't believe you can take itallthe way through very few can have the skills that blodnough to do all ofthem right right. Yep absolutely well, thank you so much Paulo for sharingyour wisdom with us today for those of the our listeners that want to maybeget a hold of you that have some additional questions for you. What'sthe best way that they can reach out to you, Yeahlinkdin Pollo, Jae Shato ispubbly esnus place te fine, Nemail, addressis, PPE, shatow, sixty six Ogmal Bot that awesome well. Thank you! So much until next time, like you rockyfor Tiking Otunder, well, you got it be well. What's the difference between wauchingand commercializing, a health care Novation, many people will watch a newproduct. Few will commercialize it to learn the difference between latchand commercialization and to watch past episodes of the show head to our videoshow page at Dr Roxycom thanks so much for watching and listening to the showyou can subscribe to the latest episodes on your favorite podcast APPlike apple podcasts and spotify, or subscribe to the video episodes on ourYoutube Channel, no matter the platform just search Oyq with Dr Roxy until nexttime. LET'S RAISE OUR COIQ.

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