Healthcare Pragmatist — 5 Lessons on Technology Adoption

My venture fund colleagues laughed when I first described myself as “aggressively pragmatic” and it got me thinking about why it matters to me. It may not be as sexy as “visionary” or “futurist” but it represents the identification of real value that drives adoption — making the hard work of building a company from scratch worth it. I decided to start this series of thought pieces after realizing that I had a distinct perspective on healthcare that could be useful for those seeking funding or commercial success within the healthcare system.

It may not be as sexy as “visionary” or “futurist” but it [pragmatism] represents the identification of real value that drives adoption — making the hard work of building a company from scratch worth it.

My entire 23 year career in healthcare has been spent at the intersection of care providers and technology. And although my experience spans consulting, pharma, medtech, digital health and venture investing, my pragmatism is rooted in my early years of consulting — from being in the hospital day in and day out. Pragmatism is really just understanding why people use a product and why they do not.

There are real forces at play and it only seems like magic and fairy dust when you don’t understand them.

As simple as that is, I’m surprised by how often it’s missing from the thinking of entrepreneurs and investors alike. There are real forces at play and it only seems like magic and fairy dust when you don’t understand them. This is more often, but not exclusively, true for entrepreneurs and investors new to healthcare as they haven’t had the benefit of experiencing the often opaque forces within our complex healthcare ecosystem. Since I greatly value the skills and experiences of those outside of healthcare, I wanted to share my hard-earned healthcare lessons so that we collectively have a better chance of transforming the industry that is most important to all our lives.

School Buses and Bunnies

Imagine a school bus. The doors open and dozens of first graders stream out — running and screaming with their backpacks, lunch boxes and little kid energy. The voice over asks “Are these your consultants?”

That was me. I became a management consultant for hospitals straight out of college. That school bus commercial ran in the 90’s and made my dad laugh every time because he was incredulous that I was giving any management advice given my total lack of experience.

This is how my healthcare education began. I was staffed inside a hospital, 4 days a week, every week for 5 years. My “office” was a converted hospital rooms. On my second assignment, they put us all in the former nursery — with bunny wallpaper still on the walls. Beyond the apt and amusing visual, actually being IN the hospital enabled me to learn quickly what it meant to run a hospital.

The hospital is a busy, challenging place with hundreds of people making thousands of decisions about the health of people who depend on them. That practical hospital reality shaped my world view. After 5 years working across 32 hospitals, I came away with an appreciation of what it really takes to change clinical practice. I’ve distilled that experience into my top 5 lessons.

Top 5 Lessons…from the hospital nursery

1. Subtle Doesn’t Sell

I should put a TM on this one. It probably takes just one day of being in a hospital to realize how much is happening and how many decisions are being made with imperfect information and real consequences. The idea that anyone operating within a clinical environment has time to focus on subtle differences between one product and another is absurd.

Think about it this way: If you have to explain the benefit, just like if you have to explain a joke, you’ve already lost your audience.

2. Cookbook Medicine

This snaps me back to presenting to a roomful of surgeons at 6am. I get the cold sweats just thinking about it. I heard “Don’t tell me how to practice medicine” countless times over my 5 years and it stuck with me. First, they had a point — I was 20-something with no medical degree. Second, it forced me to focus on where my analysis meaningfully changed their decision making. Third, it reminds me that clinicians are on the line for delivering care and must live with the consequences of their judgement calls.

They [physicians] will not accept a “black box”. They will not accept “trust us, it’s better.” And frankly, we patients don’t want them to.

This is particularly relevant in the era of clinical algorithms, predictive analytics and AI, not to mention Google search results and DTC genetic tests. Innovations need to earn the trust of these clinicians. They will not accept a “black box”. They will not accept “trust us, it’s better.” And frankly, we patients don’t want them to. How do we present data, information or process must help them achieve their goals of making their patients better.

3. Power of the Pen

This is simply - know who is making the decision. This sounds obvious but the opaqueness of healthcare’s market forces cloud and complicate the picture. In my consulting days, the customer was more obvious. The physician held this power. The “pen” represented the pen used to write his or her prescription.

I’ve heard every version of “it saves money for the healthcare system” and I find it meaningless.

The healthcare ecosystem has evolved in recent years — physicians are no longer the sole decision-maker — but the principle still applies. You need to know who the true decision-maker are (budget owner, physician, hospital executives, value analysis committees, etc) and what they care about. I’ve heard every version of “it saves money for the healthcare system” and I find it meaningless. The decider must save money and care about saving money for any of that to matter.

4. Breaks and Lunches

Breaks and lunches were the bane of every consultant working on a staffing model. Why do the modeling woes of consultants matter? Because when models says there is cost savings, but the model doesn’t reflect the reality of how you actually staff people, it’s vapor. Reality is that people are not machines and models have to account for breaks and lunches. You also can’t staff 10% of a person — or perfectly predict patient volumes. Healthcare is dynamic and patients get sick, more sick and better.

Reality is that people are not machines and models have to account for breaks and lunches. You also can’t staff 10% of a person

Let’s say this clearly: Real savings only occur when organizations can consistently staff differently. Reducing costs is a step function, not the linear progression that our models want them to be. Simplifying workflows or improving communication can be good, but not cost saving until you hit that step.

5. Bottom of the Iceberg

Everyone talks about the cost of a new product or service but that is not the big cost of new technology. The big cost is the change management required to implement a new product or service — not the cost of the product itself. My best analogy for this has been the iceberg. The product price is the tip of the iceberg. The change management is everything below the water line.

The big cost is the change management required to implement a new product or service — not the cost of the product itself.

To implement a change, leaders and managers have to educate, train, motivate and monitor all the people who need to make that change happen. This requires a huge lift and consistent maintenance — reeducation, retraining, remotivating — and the cycle continues. The more people who need to be involved, the the work multiplies exponentially. This is the real cost — and it mustn’t be overlooked by the companies because that cost often dwarfs the cost of the product.

What’s Next

I benefit greatly for access to a preeminent healthcare delivery platform and the experts who run it. My goal is to leveraging both my pragmatist roots and on-the-ground insights from clinical and operational leaders to help put definition to the value of the next wave of innovations in healthcare.

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Amy Belt Raimundo is a Managing Director with Kaiser Permanente Ventures and focuses on the clinical adoption of technology that meaningfully improves the quality, accessibility and affordability of healthcare. She has prior investing experience with Covidien Ventures and Advanced Technology Ventures. Her operating experience includes Evidation Health, Guidant and Bristol-Myers Squib in addition to her management consulting work with APM/CSC Healthcare. She graduated from Yale with BA in economics and Berkeley with an MBA. She is a Kaufman Venture Fellow and the founder of MedtechWomen.