A window of opportunity currently exists for healthcare investors and executives to lead and dominate the newest healthcare IT niche: interoperability and data exchange. However, as Abraham Lincoln once said, “Things may come to those who wait, but only the things left by those who hustle.”
As a professional healthcare executive recruiter, my experience in completing more than 225 healthcare executive search assignments for high-growth companies provides a somewhat differentiated viewpoint on many relevant issues. Hopefully, this viewpoint will benefit your company’s internal discussions as you develop your strategies to embrace the new healthcare interoperability and data exchange opportunity.
This window of opportunity has been created by a perfect storm. Consumer knowledge and interest is increasing, payers and providers are willing to engage in discussion, technology adoption has been increasing and the $2B spending bill will stimulate participation from all sides. To be successful, healthcare IT investors and executives have a multitude of complex strategic considerations in pursuing this newest window of opportunity.
The healthcare leaders who move to action and capitalize around this niche will be those who approach the business with a very outward, customer focus: The technology is not the business. The technology enables the business. However, even with an outward focus many questions exist for investors and executives alike. One significant question will be, “What is the right type of management team to lead this business?” The answer is “It Depends”. It depends how you answer the questions below.
First however, frame your thoughts on the technology towards an intuitive and user-friendly architecture. Many investors and executives want to focus too heavily on the technology. Before you fall into this common trap, remember the many examples of great technologies that never saw the light of day.
Alternatively, consider Facebook, arguably one of the hottest technology platforms today, with millions of new members each month. Mark Zuckerberg’s plan continues to be to turn Facebook into the planet’s standardized communication platform. He sees the site as interactive, indispensable and very intuitive, like your old telephone. Users do not select Facebook based on the technology. However, new users go to Facebook because it intuitively meets personal and professional needs, such as sharing family photos, catching up with old friends, distributing information, searching for a job, hiring company staff, etc.
How does this apply to Healthcare? The answer is simple. Boil the technology and the consumer needs down to serviceable and intuitive offerings. Do this and you will differentiate your business and lay a foundation for rapid-growth. Following are critical strategic considerations:
1. Are you building a technology or service business? I’ll cheat and give you this answer, you’re building a technology-enabled services business.
2. Who are your customers? Who pays?
3. You can’t be all things from the starting gate and you need to match the consumer’s adoption rate. How does your company organize priorities and customer offerings?
4. Consider that today there are only a few interoperability-focused businesses achieving any recognizable level of success nationally: Medicity and Axolotl are two. Why are they more successful than their competitors?
1. Do consumers know whether their physician uses EMR? Do they have internet access to their individual information?
2. Do consumers know whether the hospital they are most likely to use has an EMR and whether it integrates with their physician? Do they care? What does a consumer do about it if they do care?
3. Who will have access and ownership of a consumer’s health data and what happens when a privacy leak occurs? Consumers will not listen to the “Your data is 100% safe” discussion. Government has had too many leaks and remember, the Titanic was unsinkable.
4. Do consumers have a Personal Health Record (PHR)? Do they want to maintain a PHR? Would they prefer it be self-managed or physician managed? Consider online banking. Maybe the PHR arrives post interoperability?
1. Privacy: Can providers assure patients their healthcare data is secure and private? Providers will be exposed if a consumer’s information is leaked at any point in the service cycle.
2. Competition: Does interoperability make it easier for patients to leave a practice / hospital for a competitor?
3. Adoption Rate: Providers should recognize that adoption rate for standards identification, evaluation and implementation is coming, so why do they purchase now versus waiting until there is more clarity to the plan?
4. Incentive alignment: Most providers will be expected to cover a significant piece of the technology implementation and operational costs. However, Pharmacy and Insurers will reap tremendous benefits. Who bears the burden and at what percentage? Can you get multiple beneficiaries to the table to discuss developmental and operational investments and ongoing expenses?
1. Chicken or the Egg: Do you offer your solution to payers with large members and high PMPM (Per Member Per Month) costs or do you offer a meaningful and income-producing solution to the provider?
2. Trust & Privacy: John Q. Public does not trust the Payer as the custodian of personal information. Payers have access to a patient’s claims data but will they now have direct access to the results of all a patient’s care and outcomes?
3. How do you educate and offer meaningful discussion towards electronic records and HIE to large employers when many large employers are only learning about or still asking for Disease Management services?
Throughout the past two weeks, as the legislation was being finalized, I spoke with more than fifty investors, executives and healthcare intermediaries on the subject of healthcare interoperability and data exchange. No one currently has all of the answers, even though many for-profit, government and non-profit players operate in this market. However, one thing is certain. Those fast-moving businesses most committed to considering these critical questions and assumptions will ultimately achieve the greatest level of success.
Paul Frankenberg is President, CEO, and Co-Founder in Kraft Search Associates, a retained Healthcare Executive Search Firm specializing in the recruitment of high-value Executive Leadership throughout the Healthcare Industry. Paul has completed more than 225 Senior Executive and Corporate search assignments during his 13-year career and is known for search process thoroughness, commitment to project success, focus on client business plan achievement and candidate retention rates that are among the highest in the industry. Modern Healthcare magazine has ranked Kraft Search Associates one of the nation’s Top 25 Healthcare Executive Search Firms. Paul is a frequent writer, guest speaker and panelist on leadership, executive development,