Why building a healthcare software company is fundamentally different than other sectors.
Challenges. Historically, quality of user experience and user interface has a bad track record in healthcare. These things were and are not highly valued. In the past, software was either free or cheap. In healthcare, creating frictionless software and seamless experiences is hard. Software used to be sold as a component of a broader service or broader offering with the lowest marginal cost. However, healthcare software has a high degree of sensitivity toward things that get in the way of the patient provider experience. Healthcare software has a high bar from a utility and usability factor. The stakes are high when it comes to care delivery flow because of harm to patients. The software needs to work and work well.
Variation.There are prerequisites for software companies wanting to build a business and innovate in the healthcare space. Entrepreneurs have to understand what the workflow is and what the provider space is about. Healthcare is a very human industry, you can’t just insert a piece of software into this part, or that part of the workflow. You have to understand how do people make decisions, there is a lot of variation in clinician decision making, software can get in the way of this. For example, in a large patient population, different physicians can prescribe different drugs that treat one condition. For example, 10 doctors all see the same patient, you will see different ways to manage their disease and speeds in the treatment plan of the patient. Meaning, one physician may have a more aggressive treatment plan. It is hard for a software company to generalize these decisions. Knowledge of the healthcare spectrum is important, study how to deploy and how the software will be managed over time. There are also different starting points in the workflow.
Design. You have choices as a healthcare entrepreneur. You can design software that is flexible and can be tailored to an organization or you can design software that is rigid and you train your healthcare teams to behave in a standardized way, therefore the data is then standardized. Or you can build a hybrid. What leads your software product, a financial driver or clinical driver? These will have an impact on your go to market strategy and product design. For example, when you are in the flow of designing the software, and impacting a patient encounter, one feature could be changed and the data flowing into that one feature will then change, this could impact your revenue.
Integrate. Wrap the technology with a human component, this will change your business model and manage your margins for the better. Risk aversion is always a challenge and limitation when expanding across a healthcare system. If you’re a risk-averse entrepreneur, it means you don’t like to take risks, maybe small risks. Healthcare has never had a particularly high risk tolerance. Communities depend on their hospitals, health systems and clinics to always be accessible and provide high-quality care, despite economic turbulence or frustrating policies and regulations.
Data. If you are building pure software you have to know how to extract value. Data is very valuable, it’s no longer seen as unstructured. If you know what you are trying to build and if the software reduces the friction in the system and allows you add people and value the system will consider that a win. Sometimes you have to Lean in to what makes the system difficult and that is what is scalable. Risk aversion is slowing healthcare’s move to the cloud. Entrepreneurs must recognize that fear of culture change could prove the biggest barrier to successfully transitioning to the cloud. The benefits of cloud infrastructure are that it is designed with the current technological advances in mind and software that is successful has made the connection between state-of-the-art technology and a state-of-the-art staff/users.
Team building matters. Consider the customer facing roles and how best to manage the customer relationship long term. What experiences are common with the kind of people the healthcare software will serve. It’s important to understand the culture and politics of healthcare. For example, how do you talk to clinicians? It’s ok to solicit feedback from an engineer from outside healthcare who is not married to what has been done in healthcare. You have to get creative to how you get into systems and how you get data out. Engineers who have designed banking systems are really good at this. Making sure the engineering team is the most modern as possible is also important. The data sets are complex in healthcare, the data volume and variety from a data handling standpoint is dynamic and data is always being generated.
Leadership. The leader of the organization needs to have a deep understanding of the market; this includes the cultural nuances which will help shape the strategy. Consider that healthcare is also an emotional space. Throw your team into into the deep end the most challenging environment to help them prepare them to handle the stress and emotions. There are software simulations for this. Software entrepreneurs/leaders in the healthcare space need to be comfortable with distortion, understanding the value proposition of the software will keep you focussed on the north star. It’s hard to measure costs in healthcare, reducing costs should not be the main priority or primary value proposition because it is a line in the cost structure that can be wiped out over time and potentially get commoditized.
Timing. You need to what changes to the workflows will happen to the entire system to become modernized. When is the system and the problem are ready for your solution? You may want to use the software to make intelligent queries, however, the structure of the healthcare industry simply may not be ready. The average number of years a healthcare technology takes be adopted is 15 years. Friendly reminder we are still using fax machines. Time functions differently in healthcare. Nothing happens in healthcare in under three years.
If you are able to accomplish what you want, you still need to decide how to do it. Healthcare is expensive to distribute product in the healthcare market. Is the juice worth the squeeze? The sales cycle and motion is tough in healthcare. Cannot build healthcare software in a vacuum. Figure out different value capture mechanisms. Be creative. The system has so much cost built into it and so much revenue flowing through it. With the right technology you can have massive impact on healthcare.
