Originally published here: http://info.zs.com/thepacemaker/a-view-from-the-other-side-four-lessons-for-medtech-startups-from-outcomemd.
There’s an enormous opportunity for medtech startups, and getting a company off the ground is no easy feat. We talked with OutcomeMD founder and CEO Justin Saliman about key lessons that he and his team learned along the way. OutcomeMD is a digitally focused startup that aims to capture patient-reported outcomes (PROs) in a simple and engaging way. Justin also is an orthopedic surgeon at Cedars Sinai Medical Center. We’ve partnered with Justin and his team on market opportunity assessments and other strategic projects, and we recently met with him to get the story behind his startup and to discuss the lessons that he has learned while entering the digital medtech space.
In its early days, the idea behind OutcomeMD was to create a better “doctor finder” app. The concept was to objectively rank physicians based on the procedures at which they truly excelled for specific types of patients (past health information, demographics, etc.). However, the data just didn't exist. The idea of giving each doctor a “score” is a very powerful concept, empowering patients and payers in how they interact with physicians. Healthgrades, Google and Yelp—and, to a lesser extent, insurance portals and CMS—all provide information that scores physicians, but none of them are using robust patient-reported outcomes as part of those scores, which seemed to be a significant gap. “Once I realized how crucial PROs were, they became my main focus,” Justin told us. The PRO is the missing piece of the outcome of care, which, in turn, enables a deeper understanding of the care and value that each physician is providing.
Now the OutcomeMD team is betting that more frequent and structured use of patient-reported outcomes will provide significant new information to produce a more holistic picture of health outcomes than what's available via standard EMR or claims data today. This enhanced view of outcomes will be more productive for physicians and payers, as well as more engaging and empowering for patients.
OutcomeMD has come a long way from its early “doctor finder” concept, and the team has learned a variety of lessons, both in terms of the offering itself and how to get a digital medtech company off the ground. Here are four lessons that Justin shared with us during our conversation:
1. Build the right solution. Although this sounds obvious, there are several nuances to it. For example, new market entrants can spring up on short notice, so keeping a close eye on the evolving market landscape is critical. Also, avoid recreating a solution that already exists. “One mistake, in hindsight, was building a fully editable medical note, which overlapped with the physicians’ EMR note,” Justin said. “We lost weeks of development on that.” Similarly, having a keen focus on the simplicity of the product goes a long way toward adoption. For an app, this translates to designing for the minimal number of clicks and an intuitive user experience. “Ease of use and improving workflow are, by far, the most important things,” he said.
2. Hire outstanding talent. Early on, you can’t underestimate the importance of determining which roles are critical and then finding the right mix of internal and external personnel to fill those roles. For OutcomeMD, a critical need was hiring an internal engineering and technical team, as well as outsourcing some early stage sales and marketing activities. As a physician and entrepreneur, Justin also capitalized on his time with patients to test the latest versions of the solution with them. “There is no substitute for real-time observations during intimate patient care,” he said. Additionally, he was able to obtain and act upon similar feedback from physicians across a variety of specialties who tried beta versions of the solution.
3. Hire at the ideal pace, balancing the burn rate against the need to seize the market opportunity. “Things seem to take 10 times as long and cost 10 times as much as you expect, and of the two, time is actually the more valuable,” Justin said. While an initial prototype can be relatively simple, the ongoing development and operation of a commercial-scale solution requires significant effort. Compared to other industries, a healthcare startup has additional considerations, such as the unique regulatory structure, the importance of personal data security, and the need to change longstanding ingrained behaviors among physicians and patients.
4. Experiment fast and find the path to scale. As with any startup, getting the business model right becomes the ticket to scaling up the revenue. There are several paths for digital medtech startups to pursue, and Justin recommends testing multiple routes. “Sometimes you have to inexpensively find a way to throw many things at the wall to see what sticks, then listen carefully to your market feedback to inform pivots along the way,” he said. Three routes that he recommends include:
There’s an enormous opportunity for medtech startups, particularly since barriers to entry have been reduced substantially with the advent of apps and other digital solutions. We suspect that the industry will evolve into a variety of new solution providers, and provide the opportunity for legacy device companies to expand their value propositions into broader portfolios of products and services. It continues to be a dynamic and exciting time to be serving the medtech space.