Why healthcare entrepreneurs should focus on meaningful metrics
As part of the Kauffman-sponsored Energizing Health Collaboration Series, we've turned over eMed to Guest Editor Zen Chu, the chief architect for the Boston leg of the collaboration conference and an entrepreneur in residence at the Massachusetts Institute of Technology. Through his work at H@cking Medicine, Zen has collaborated with a number of healthcare entrepreneurs. Here are insights from one of them.
When patients, doctors, hospital executives, and payers all care about a different metric, finding a measurable return on investment (ROI) can be difficult for healthcare entrepreneurs. For the team at Smart Scheduling, a platform for optimizing appointment scheduling, the first step toward success was finding alignment between these stakeholders, said co-founder and CEO Chris Moses. "We try to identify who cares about operational efficiency and better appointment access and more revenues," he said. "It's such a complex, complicated system.""
Part of the process involved determining real, meaningful ROI metrics, Moses said. "A lot of entrepreneurs come up with vanity metrics that may look good," he said, "but no one cares about them." For instance, Moses said, the number of engaged users on a platform is more meaningful than the number of page views. For Smart Scheduling, he said, important metrics include the accuracy of the system's predictions, how many appointments are booked, and how many patients are seen.
Here are other entrepreneurial insights from Moses:
Use open API to your advantage -- There are some 200,000 provider practices in the U.S. on various electronic health systems that aren't interoperable, Moses said. "Even for a hospital system or provider practices using the same software," he said, "they can't even easily transfer data among practices with the same software." This presents a unique challenge for healthcare entrepreneurs like Moses who want to develop a tool to work across platforms. The Smart Scheduling team found help in athenahealth, he said, which offers a cloud-based an aggregated open API.
Show you can execute on little cash -- It's getting tougher for healthcare startups to secure funding, Moses said, but for good reason. Because of cloud-based services, he said, companies don't need a big team and significant capital to build a great product or service. For investors, Moses said, ideas are a dime a dozen. Instead, funders want to see that a team understands the problem it's working to solve, has built a prototype, and has won awards. "Once you've shown that you can execute on very little money," Moses said, "then it's time to scale and grow."
Let your team learn on the job -- With companies like Facebook and Google snapping up young developers and retaining experienced ones, Moses said, recruiting a technical team member is tough. Even more difficult to find is a data scientist with a background in healthcare analytics, he added. Startups might have to instead provide the resources for a developer to learn on the job, Moses said. "The people you find aren't necessarily experts," he said. "You have to be willing to hire someone who learns on the job."
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