The market for healthcare information technology continues to show enormous growth potential while the industry is transforming itself. Commercialization of Healthcare IT products can be a daunting task for the untrained. A start-up has a much better chance of success with a well defined business strategy, specially if you are looking for capital in today's constrained venture funding market. Important things to consider in your business strategy -
- Healthcare providers and payers will consider new technology systems if it supports their evidence-based care models with cost, value and safety imperatives
- Changing standards and increase regulatory scrutiny requires you to be laser focused on compliance requirements.
- Healthcare market are looking for Solutions model that enhance your product with various value added services. This requires a good distribution and pricing models associated with your product strategy
- Understanding and consider new markets, including focus on launching first outside developed markets
Healthcare IT solutions firms need to first understand their customer and what are the market trends and needs, before creating a product, marketing, sales and distribution strategy. Overall business strategy will require clear and honest assessments of your readiness and setting up milestones across all business functions. These strategies and milestones together with associated funding request makes up for a sound financial and business plan.
Let's talk in-depth about some of the customer interaction touch points that should be part of every strategy for a Healthcare IT Solution start-up:
In Healthcare, understanding the Payer v/s Benefiter v/s User interactions is critical to your business strategy and to your ability to develop a compelling marketing plan.
Marketing is a science and the art of creating, communicating and delivering solution offerings that have value for customers and partners. Marketing helps you choose or define your target markets through market research and analysis as well as understanding your customer needs, communicate with market at large your brand, advertise to the world and generate leads. Some things to focus on -
- Market Research - Why should good Market Research matter? Without good Market Research, you cannot identify realistic customer needs, understand what drives customer loyalty, co-relate to what customers expect from product innovation, assess competition and define customer segmentation for your sales and distribution models. Leverage search engines and numerous free and paid web applications to know more about your customers and competitors. Check out on several best practices to test your innovation in product functionality or distribution models with good market research tools.
- Digital Marketing Strategy Build a solid digital marketing strategy and get the best return on your marketing investment. There are several best practices and tools out there that can drive exponential growth compared to traditional marketing methods. Content marketing is one such powerful tool that can make lead generation, sharing information and corporate communication cost effective and easy to implement, while enabling you to track the metrics for success. You can use content marketing to build new client and partner connections, create a networking effect to drive revenue, manage Search Engine Optimization (SEO) and generate qualified leads
- A Brand Strategy Developing your brand strategy requires investment in time, creative thinking and use of good market research that correlates to your product and sales strategy. Both qualitative and quantitative research can help you develop a good brand strategy that can create customer loyalty and easy acceptance
Using all of the above mentioned action steps, you get a powerful workflow to first State your Hypothesis, then Test the Hypothesis, followed by testing your Product or Solution with a prospect. This iterative workflow can help you Verify your Hypothesis and your Product or Solution before you go all out to commercialize your business.
Distribution and Pricing
Healthcare organizations today are adaptable to innovative business models for products and solutions that can provide value and efficacy. Healthcare IT is leveraging SaaS and subscription models, are open to leverage consulting and technology services and open source products. This change is sourcing models is bringing change in Healthcare IT vendor's business model from Product only play to Solutions model.
It is critical that your business understands its competitor(s) to provide a compelling solutions model with a competitive distribution / sales strategy.
Interoperability Focus in your Go to Market Strategy
Healthcare IT users are very focused on Data and value the data considerably. This would mean your solution can be of higher value if it can create, manage and distribute useable data. Understanding your market includes understanding the enterprise technology architecture of Healthcare organization, as it provides you with clarity on how to design, market and implement your solution. Products that are isolated and do not interface well to other products or solutions are no longer in the shortlist of customers procurement strategy. For a start-up, a well designed strategy, either as a product, service or both that can be developed over time is very important before commercializing.
Almost all Healthcare IT products today are likely to be used in conjunction with other existing technology products. Your marketing and sales message, your distribution strategy, your solution mix (integration and implementation services) are all dependent on a good interoperable product strategy. The simplest way to achieve scalable interoperability is to consider building an Integration Hub that can be part of or an extension of your product. See slides 22 to 24 for more details in the presentation.
Summarizing and highlighting actionable steps, a start-up can benefit from: -
- Defining your market and your customers very clearly
- Invest in Marketing and Sales Think Opportunity Cost
- Differentiate your product, your business model or brand to compete with free products or well entranced competitors
- Create a short term (1 year) and long term business plan with market analysis, positioning, launch and demand creation as the key objectives
- A Continue with research and analysis, it brings you brand and you closer to your customers and helps you define and address the customer needs better
- Define multiple success criteria, track / measure them and modify your business strategy to improve on the metrics
EHR review site Software Advice recently published their 2014 Meaningful Use EHR Market Share Report(SlideShare version is also available). They reported that in contrast to the buzz about this impending market consolidation, they found a trend toward fragmentation; in fact, the number of vendors in the health space with MU attestations actually grew 25% in the past year alone. The report was nice enough that I reached out to Melissa McCormack from Software Advice to see what further insights we could glean from the report. Melissa indicated that while there weren't any big upsets in market leader ranking, the real surprise comes in the proliferation of new vendors. We both wondered aloud why are they entering a market when there seems to be an established order, with the constant speculation of looming consolidation? The data demonstrates that MU has been successful at driving lots of market entrants and lots of attestations. But once those MU dollars are out of the equation, where will that leave vendors? And will providers stick with their MU-certified solutions? Here are some other questions I posed to Melissa, along with her responses:
What key lessons should an independent small physician practice take from the EHR Market Share Report?
If Meaningful Use attestations could be considered as votes for a particular product or vendor, then we are seeing the same vendors being voted into the top 10 for two years running. However, this is by no means proof that these top systems are the best systems. It only demonstrates that they are consistently the most used for the purpose of attestation.
But the MU program has an (admittedly fluid) expiration date. If providers want to keep using these systems long-term, they are going to want solutions that do more than just check a box on the MU criteria list, especially given the price tags on most of these systems. My advice to providers is to take a step back, and carefully consider which system makes the most sense for their unique needs and pain points in the long term. Established brands might seem like the safest bet, but its possible a less-recognized EHR product is a better fit.
On the other hand, if you do opt for a smaller brand, you all want to consider their viability. If they disappear in a few years, or even if they are acquired by a larger company, that could create some big headaches for your practice.
What key lessons should a developer of a new or existing (but not high market share) EHR product take from the report? How can innovators who want to enter the health IT or EHR market use the report to help them figure out whether to enter a market or not?
Thanks to the HITECH Act and the MU incentive programs, new products over the last few years have been focused mainly on meeting ONC-ATCB certification criteria. But once the stimulus money dries up, there may be the opportunity for innovative products that address unmet clinical needs to steal the spotlight.
As it stands, the market remains very fragmented, so new entrants need to figure out how they can differentiate themselves from the slew of existing vendors and products. The fact that the market continues to support an increasing number of vendors and that the market leaders are only maintaining, rather than gaining, share suggests that many providers have needs not being addressed by the existing crop of software. Vendors should figure out what those are, even if they are outside the scope of MU certification criteria, and consider what they can offer that the market leaders don't.
One frustration I hear voiced frequently among the practitioners I talk to is the lack of specialty-specific features in generic EHR systems. I see definite opportunity around solutions designed specifically for one specialty or a group of related specialties.
What key lessons should a developer of an existing, highly ranked, EHR product company take from the report?
To me, the fact that the top 10 vendors are not actively gaining share is significant. They are at risk of stagnation, so it's important for them not to get complacent. And while the ambulatory attestation picture didn't change much, the hospital market did see some shifts in 2013. Epic, the long-time leader, remains at the forefront, but lost share in 2013. Epic losing share in the hospital market indicates that no EHR is immune to competition from other, innovative products. To the established, dominant vendors, Iad suggest something similar to what I suggest for new entrants: figure out what people need outside the context of Meaningful Use, consider expanding features, consider specializing.
There are several significant changes occurring in the Healthcare industry, but very few have a direct impact to your earning potential like the transition from ICD-9 to ICD-10. While there have been many conversations focusing on the need for this upcoming ICD-10 transition, few have got into analyzing the risk and positive impacts to the business of healthcare.
If you have not started, or are in the process of making the ICD-10 transition, you need to know how to prepare your organization for this big change and assess the impacts in real business numbers.
Hello Health teamed up with Netspective to talk about ICD-10 and the Revenue Connection. Fred Pennic, a leader in ICD-10 transition, Healthcare IT consultant and a prolific writer on various topics about Healthcare IT, led this webinar.
Their shared objective was to provide advice on how to make the transition from ICD-9 to ICD-10, understand the revenue impacts from this change, and learn how this transition will help you manage business risk. This webinar reviewed important considerations for ICD-10 readiness to help your staff remain focused and avoid any revenue hiccups.
Netspective covered a lot of ground and provided numerous tips and tricks to plan or improve your strategy for this ICD -10 transition. The recommended approach is to focus on three things People, Process and Technology. We understand that change management is a big challenge in this transition process, and discuss about how hard it is to rise above the daily grind; how to get the organization rallied for this change, how to build a measurable ICD -10 transition plan, and how to deploy this change across your organizations ecosystem.
Please see the Webinar on ICD 10 transition that took place on Wednesday, April 17th here.
If you have any specific questions you would like us to answer, send them to Fred or Gunjan and we all be happy to respond.