Editor’s note: Julie Yoo leads health tech investment at venture capital firm Andreessen Horowitz, and Paul Uhrig is chief legal and digital health officer at central New York health system Bassett Healthcare.
Health systems need help, and digital health companies need a playbook to stand out in a crowded field.
Selling to health systems has always been difficult — lengthy sales cycles, multi-stakeholder decisions, complex implementations — but it’s been exacerbated by recent challenges exposing the difficulties of managing labor costs, provider burnout, slim margins and hard-to-engage patient populations.
At the same time, there are more digital health innovations than ever with potential to help — if they could just get implemented in viable ways. How can digital health companies best engage with the health systems that need them the most?
Getting in the (right) door(s)
As with any pitch, getting in the door can be difficult — let alone getting in the right door. Health system leaders have limited time and are bombarded every day with companies offering to make their lives easier. How do you stand out?
First, research the health systems you’re trying to reach and make sure they align with your product’s value proposition. An academic medical center using Epic with strong payer contracts and a healthy mix of commercially insured patients in a highly competitive urban market will likely have a different lens than a solo rural hospital system on Meditech with a high prevalence of Medicaid patients.
Next, make sure that you’re reaching the right person. Some systems have dedicated chief innovation officers or chief digital officers who evaluate and recommend digital health solutions to the broader enterprise; some have strategic service line planners who focus on specific profit and loss statements; and some have committees with multiple individuals from across the system that make purchasing decisions.
Ideally there is one stakeholder. But more likely, you will have to explore the optimal win-win-win scenario across multiple stakeholders (including yourself), presented in a way that gets everyone on board. Oftentimes this stakeholder base includes clinical, operational, IT and financial leadership. If your value proposition doesn’t benefit all of those stakeholders, you might reconsider whether it holds enough weight to be worthy in the eyes of that customer.
Finally, be ready to make your pitch. Have all of the information you’ll need, including any data that helps make your case. Remember to tailor this information to align with the system’s priorities — health systems are too swamped to implement most solutions, so being crystal clear about the value-add and return on investment of your solution can go a long way. Also, don’t be bashful – what is your pricing, how do you make money?
Making the pitch
Every health system has a different pitch process. The more familiar they are with digital health companies, the more likely it is to be formalized.
Health systems with a less formalized committee might require more legwork on the part of the entrepreneur. In such scenarios, the entrepreneur or their business development point person should ideally identify one main point of contact — someone who can serve as your shepherd and help identify other key decision-makers. This allows the entrepreneur to make their case to a wider range of stakeholders, as well as have additional points of contact in case of staff turnover.
Don’t be afraid to ask about budget and to clarify your revenue model. Even if people like your solution, it’s moot if they aren’t able to find the funds for it.
Especially in this era of financial hardship for many provider organizations, it’s imperative to articulate a financial ROI framework that helps buyers make the internal case for why the purchase of your solution results in a positive financial impact.
The evaluation process
As with the pitch process, the evaluation process can run the gamut from informal discussion to formalized diligence.
Don’t be afraid to ask for visibility into the evaluation checklist. Hopefully there is one, and if there isn’t, lean into the opportunity to build one together. Be prepared with case studies and references from other customers to support the evaluation process.
The process may seem long and arduous, but remember that the upfront qualification work is intended to de-risk the downstream implementation process and identify potential blockers early, so that if a purchasing decision is ultimately made, the organization will be able to anticipate how to design a smooth and successful implementation.
Piloting and implementation
A health system might request a pilot program to get started. Your mind might race to the dozens (or hundreds) of blog posts you’ve read about startups experiencing “death by pilots.” But a well-designed and well-resourced pilot can be a win-win.
Specific parameters of these pilot programs vary widely, but the key is to ensure that there are clearly defined success criteria and a clear commitment to move forward if the pilot is successful. Oftentimes, a successful pilot demonstration is needed to justify the allocation of budget for a longer-term contract.
Regardless of the contours of how you get started, implementation can be difficult. Not only is your product scaling for perhaps the first time, but it can also be idiosyncratic, depending on the specific health system and the stakeholders who will be interacting with your product.
IT integration is where many digital health companies get hung up. It’s worth doing the exercise of defining an initial implementation scope that requires minimal integration, while still delivering a certain level of value, and phasing into a full-blown integration to ramp into your product’s full ROI.
Do your research on the specific type of integration that you need to ask for. There may be multiple ways to integrate with a given EHR system, so do your homework. And don’t forget the other systems you might need to integrate with — practice management systems, call center systems, CRM, credentialing, etc.
Digital health entrepreneurs can be proactive by honestly assessing their capabilities, determining who exactly is responsible for which pieces of the implementation and maintaining regular contact with the health system running the pilot.
The main takeaways for building a successful digital health pitch? Understanding the people you’re pitching, the needs they have which your solution might address, the current status of their collaborations and how you might differentiate, and, most importantly, always keeping structures and bureaucratic and policy hierarchies in the back of your mind.
Pitching requires persistence and a deep understanding of health systems’ needs — but that’s also the level of thought that can separate the wheat from the chaff and put you on a path to implementation for your digital health solutions.