Can startups work with HHS?
How the world’s largest government agency is trying to work with the world’s smallest and most innovative companies.
On February 5th, 2018 in Washington DC approximately 100 top startups, government officials, and industry leaders convened for the United States Department of Health and Human Services’ first-ever “Startup Day.” As the Chief Technology Officer of HHS Bruce Greenstein stated in his opening address, the goal of Startup Day is to “flatten the information field” and enable companies (specifically startups) to see HHS as a collaborator, customer, and partner in their goal to make a positive health impact.
Why is it that companies need interpreters with them to speak the language of government?
— Bruce Greenstein, CTO HHS
Greenstein shared stories of how most of the people scheduling meetings with his office were either government lobbyists or insiders. The solutions coming to the table to serve HHS were not the most innovative; instead they were the most networked, connected, or politically experienced. This was the catalyst for creating Startup Day.
He felt that if they could open HHS to startups they achieve multiple positive outcomes:
- HHS gains access to the world’s most innovative technologies
- When early-stage companies navigate HHS bureaucracy without a government specialist, then any company can take advantage of government collaboration opportunities
He also outlined some of his office’s key priorities:
- Open Data and Innovation — enabling the cultural and technical infrastructure that supports innovative solutions
- Partnerships — connecting with public and private partners to solve the challenges of today and tomorrow
- IDEA Lab — HHS’s center for encouraging and enabling innovation at HHS
As he dug deeper into his priorities, Greenstein echoed a sentiment he shared at the StartUp Health Festival in January, “our data use agreements need to be organized around sharing data.” He told stories about organizations who champion data transparency and interoperability but were reluctant to share their own data, “we have to change that mindset… you can’t be about open data and not share it.” He hopes these efforts to foster innovation will break down some of the industry’s most stalwart barriers.
Along with the CTO, the audience also heard on a wide variety of topics including stories of startup inspiration to tips and tricks for how to get your product covered by CMS from Dr. Susan Miller (Medical Officer, Coverage Analysis Group, Centers for Medicare and Medicaid Services, HHS), Bakul Patel (Associate Director for Digital Health at the Food and Drug Administration, HHS), John Bardis (Assistant Secretary for Administration, HHS), and Michelle Street (Deputy Director, Office of Small and Disadvantaged Business Utilization, HHS).
Following the speaking sessions, we also heard from entrepreneurs in a “shark tank” style pitch-off. We captured the highlights from the day below.
HHS Leadership Highlights
“We are aligning our regulations for how software works.”
— Bakul Patel, FDA
The FDA is creating programs to support digital health entrepreneurs, but their programs are not yet fully developed. He anticipates the minimally viable program will launch by the end of 2018.
HHS is the most consequential department in the world.
— John Bardis, HHS
The seasoned executive turned government employee explained CDC’s role in addressing the recent ebola outbreak, “if ebola leaves Africa, we have a global pandemic.” The importance of the US’ role, specifically the department of HHS is enormous, but he argued the cost was too high and there was too much waste.
We have “4.6% of the world’s population, but spend 45% of the world’s healthcare GDP.” He believes that Medicare and private sector spending should bend closer together.
He explained that he was still new at the job and in the deep learning process, but explained that every entrepreneur needs to know these three pillars to understand HHS:
- Understand the statutory rules that restrict HHS
- Understand the regulations that guide HHS
- Understand the appropriation that funds HHS
Bardis then shifted his focus to the entrepreneurs in the room. In a day filled with regulatory details, the audience enjoyed Bardis’ brief reprieve into his leadership insights.
How many times have you thought about quitting? What makes entrepreneurs successful is their toughness.
— John Bardis, HHS
Bardis, also a leader in the US wrestling community, discussed some of the concepts he learned through the sport, “train in the worst possible conditions.” He argued that that if you don’t prepare for the worst, you won’t be ready for when the worst arrives. Great leaders fill in the gaps exposed by that level of preparation.
He expressed to entrepreneurs that they need to understand the answers to these two fundamental questions:
- What is your quantifiable value proposition?
- What is your addressable market?
The best leaders in his opinion reserve the right to make adjustments based on new information, “information that makes you smarter.” He also explained the importance of culture and being a positive example for your team, “do the best things for others first… leaders are demystifiers and fear stealers, they take away people’s fear.”
“We are not going to sacrifice quality.”
— Michelle Street, OSDBU
Street and her office of eight helps small businesses engage with the government with the goal of providing procurement-ready organizations to their customers of internal subject matter experts and stakeholders.
Often, she finds that startups arrive unprepared for how to work with the government. Specifically, she offered some advice for how to craft capability statements that would appeal to OSDBU’s internal customers:
- Your capability statement must fill the gap of the customer’s requirement
- You need to identify your differentiator(s). What makes you different from your competitors? Who are your competitors and why are you better?
- Identify how you’ve solved problems for other customers or partners. The government is more likely to work with organizations with a proven ability to deliver
- Do not send the same capability statement for each requisition
If you’re a small business and interested in learning more about how to secure a government contract, Street offered up her department (sbmail@hhs.gov) and work (michelle.street@hhs.gov) emails.
“When we look for reasonable and necessary, we look for a significant improvement of net positive health outcomes and if it is important to the patient.”
— Dr. Susan Miller, CMS
In one of the more tactical speaking sessions, Dr. Miller (who oversees what does and does not get covered by CMS) outlined some of the crucial steps to get covered by CMS:
- It must have a benefit category (start by looking at section 1861 in the Social Security Act)
- Look at what CMS does not cover (ie. hearing aids)
- Your solution must be reasonable and necessary in diagnosing or treating an illness (which is not the same as the FDA’s “safe and effective”)
She went further to describe how they make their coverage determinations and some of the questions they ask such as “is the evidence compelling enough to conclude that the application of the technology improves the life of the beneficiary?”
This line of questioning and review is admittedly not a quick process and can take a long time, which is why she recommends engaging in a parallel review program with the FDA. Thus far, she says only one organization has taken advantage of this process and when they did, they saved seven months of review. One of the tips is to ask for CMS to be at your FDA review.
If your technology is still in an early stage with limited evidence to substantiate your claims, it is possible to engage CMS to have them support your evidence development. CMS can help you identify your evidence gaps and then it is your responsibility to identify a protocol that fills in those gaps. If CMS approves your protocol, Medicare can pay for your technology while you collect the evidence.
Similarly, CMS can pay for an item if it has an Investigational Device Exception through the FDA.
She urged “please come to us sooner rather than later… just call me.”
She closed by sharing several examples of common mistakes by entrepreneurs:
- They don’t measure the right outcomes, “we’re looking for important outcome measures to the patient. We are not necessarily focused on the cost.”
- Study the Medicare patient group, “we don’t do 20 year olds.”
Startup Highlights
What’s next?
Startup Day will make approximately 12 stops around the country over the course of the next two years, starting with Boston, Nashville, and Charlotte.
If you are interested in attending HHS Startup Day in Boston on March 30th, please email pulse@masschallenge.org so you receive an invitation once it becomes available.
