The healthcare sector, with all its complexities and regulations, isn’t necessarily predisposed to rapid change. Yet a combination of rising healthcare costs, an impending wave of the newly insured, and the trend toward patient-centered care is altering the landscape, opening the door for disruptive new technologies and services.
Whether entrepreneurs are able to push their way through that door is another matter. So startups need to think carefully about decisions regarding their product, partnerships and market, according to veterans of the healthcare innovation community.
Healthcare entrepreneurs face a hard time getting established organizations – such as hospitals, physician groups, and academic institutions – to listen and take a risk on their ideas, she said.
“That’s really what we need to start seeing in the industry – that there are more organizations that are bridging that gap between the VC entrepreneur world and the industry in order for us to see more of these solutions coming to market,” said Nashif.
Giovanni Colella says he still bears a “couple of scars” from when he tried to shed a light on the cost and quality of healthcare by co-founding Castlight Health in 2008. His partner was Todd Park, now the U.S. chief technology officer.
But while insurers and providers were initially wary about sharing cost information, the company has benefitted from what Colella calls a “perfect storm” of the Affordable Care Act – bringing more customers into the healthcare market and a corporate world and pushing more of the cost of care on employees.
Those forces will not only transform the healthcare system, but also create opportunities for entrepreneurs, he said.
“When consumers pay more and more out of pocket, it’s a signal that the market is changing toward a consumer-driven market,” said Colella. “So that’s where the money goes.”
Michael Weintraub, who has launched several healthcare companies, recently saw his latest startup Humedica acquired by UnitedHealth Group. Remaining at the helm of the clinical intelligence company, he sees continued opportunities in trying to use clinical, financial and operational data to “bend the cost curve” in healthcare.
“If we’re not careful, everybody will come to TEDMED because healthcare will be 100% of GDP,” Weintraub said.
One piece of advice he has for entrepreneurs in the sector is to carefully study the economic and technological forces impacting the healthcare market, as well as the players.
“You need to really understand healthcare – the balance between who the user is and who’s paying for the good,” said Weintraub. “Because in healthcare like no other industry, it’s not the same person most often.”
Nashif agreed that entrepreneurs need to carefully consider the context of how their solutions will meet market needs, while adding that the healthcare industry also needs to rethink how it sources solutions.
Healthcare organizations must think about “how they view innovation and the different ways we’re moving into a new era of healthcare system,” she said.
One way TEDMED is helping to connect entrepreneurs with others, whether inside or outside the healthcare sector, is through The Hive. In addition to providing a showcase for the 50 startups, TEDMED teamed up with the Startup Health Network to provide a way for delegates attending or watching the conference to support them through the online network.
Photo of Giovanni Colella courtesy of TEDMED