Why Some Outsiders Need Insiders to Disrupt Healthcare

There’s a preconception that innovators tend to be outsiders — that most entrepreneurs succeed on their own, coming out of a dorm room to suddenly change the world. This is more a myth than a model for success: In most cases, you can’t change an industry without constant conversations between entrepreneurs and the larger organizations that have the funds and infrastructure necessary to disseminate their products or services. This is particularly true in the healthcare industry.

Conferences like this week’s Stanford Medicine X bring together providers, entrepreneurs, payors, venture capitalists and patients who all have the same goal — a modern healthcare system that engages patients where they are, in the manner in which they are most comfortable, and transparently offer high-quality services for the best possible value

By bringing these diverse stakeholders together in one place, they can bring together ideas, discuss what each is trying to accomplish, and better understand how each can help turn the other’s goals into reality.

Of course, entrepreneurs will be at Med X looking for potential funding and customers, but the value of these conversations is significant for healthcare systems as well. In today’s rapidly changing healthcare delivery landscape, hospitals need the design, engineering, and intellectual talent of emerging organizations to continue to offer convenient, affordable care in new ways

Conversation is just the start

My colleague at Dignity Health, Sanjay Shah, is participating in a panel at Stanford Medicine X discussing how vital this kind of relationship has become for healthcare, and they all begin with a conversation on how to jointly realize this value.

Bringing in any new capability into a health system requires a deep engagement from many elements of an organization and can be a monumental task. Innovation inherently represents risk, and healthcare delivery is a risk-averse industry by nature. To move past this, it helps to have the buy-in and trust of the organization prior to start, which is only possible if the entrepreneur can clearly define what their value proposition is and what it is not.

In the first phase of the digital health industry, value was often tied to how much venture capital was raised and by whom. While this is a foundational step in the process, it does not necessarily win the hearts and minds of the front lines necessary for true care transformation

Today there is increased recognition that value should be defined by measurable evidence (clinically, financially, operationally, etc.) and the ability to scale, something that can only be done in partnership with providers of care focused on similar goals.

The Measures that Matter

Let’s talk about what we are measuring. Macro issues — such as readmission rates — represent important but complex issues that should not be looked at by themselves. In many ways, this is precisely where health systems and entrepreneurs miss the mark in testing the efficacy of new solutions.

A common approach in the industry is to select the key metric that you want your startup partner to address, then measure how that metric has changed after a trial period of 18 to 24 months. That’s about how long it takes to conclusively prove out most meaningful metrics. But there’s a problem: 18–24 months is very slow and limits the creativity, lean methods, and real time adjustments that provide huge value.

Instead of looking at metrics that take a long time to prove out, hospitals need to unpack those metrics with shorter-term objectives that take less time to indicate success. That way, both parties are learning in real time and changing course quickly to better meet customer needs.

As an example, suppose you’re pioneering a service to reduce patient readmissions by a certain amount within a trial period. Rather than evaluating the project based on that statistic at the end of a year or two, instead look at how often they are logging into a new system and for how long. Determine metrics like the specific education they are digesting, how the tool impacts the time and first site of discharge, the propensity to be able to return to home, or time to first follow-up appointment. By checking on these indicators weekly, you will learn whether patients are reacting to the program as you anticipated. This will enable you to make the changes necessary to achieve your goals.

This, like all other parts of the innovation process, requires constant conversation. Stakeholders in the healthcare system need to be aligned with their partners on what constitutes success at every step of the way and they both have to be flexible enough to change quickly when needed.

Be a Conversation Starter

Innovation is a complicated process, and there will be disagreements. The surest way to make the process as smooth as possible is for both sides to be clear about what they want to accomplish from the very beginning. That first conversation — whether it’s at Stanford Medicine X or any number of other places — may seem like the simplest part, but it’s absolutely necessary to get it right if health systems want to innovate and stay relevant.

So don’t be an outsider: Have as many conversations as you can, because it’s hard to change the world on your own.