Healthcare tech meets healthcare reality

Healthcare Alert

Entrepreneurs, investors, executives illuminate the challenge on DLA Piper panel

As entrepreneurs rush into the healthcare sector, even the most innovative thinkers are encountering a unique set of challenges – and solving them will require every bit as much ingenuity as building groundbreaking new technologies.

In addition to creating, funding and launching disruptive products and services, healthcare entrepreneurs must seek innovative ways to ease new technology into the existing healthcare workflow without disrupting care or patient experiences. To understand and innovate within the system, entrepreneurs are seeking partnerships with much larger organizations. Investors, too, must find the right balance between Silicon Valley ingenuity and deep healthcare knowledge.

These were among the complexities addressed at a recent panel discussion titled "How is Technology Transforming the Way We Deliver Care?" presented by DLA Piper in San Francisco during the 2016 JPMorgan Healthcare Conference. The panelists represented the most vital forces in healthcare innovation: entrepreneurs, investors and providers. And while the conversation revealed diverse and nuanced viewpoints, there was agreement that creating, selling and implementing new technologies for the medical world demands careful, elegant collaboration between the clicks of the new world and the bricks of the old.

The panelists:

  • Tom Rodgers, SVP and Managing Director of McKesson Ventures
  • Tom Moriarty, Executive Vice President, Chief Health Strategy Officer and General Counsel of CVS Health
  • Sanjay Shah, Director of Strategic Innovation for Dignity Health
  • Adam Jackson, Cofounder and CEO of Doctor on Demand
Josh Kaye, Chair of DLA Piper's US Healthcare Sector, kicked off and moderated the discussion.

Josh Kaye:

For the past few years, the catchphrases for healthcare have been “improving care” and “reducing cost.” Tom, are you seeing, from a CVS perspective, a greater focus on technology being used to reduce costs or improve care, or is it truly a blend?

Tom Moriarty:

It is both. If you look across the board, we have roughly six million folks come through our pharmacies every day. What’s critical in that, whether it’s a physician workflow, a pharmacist workflow or even, frankly, a patient workflow, is to make sure you’re relevant at the point where care is needed or where care wants to be accessed, and how to utilize technology to make sure you’re relevant at that point in time.


Tom, how about from McKesson Ventures’ perspective? Where is the greatest innovation coming from in terms of reducing cost and improving care?

Tom Rodgers:

What’s really new to this landscape and could be the game changer is the technology that allows doctors and clinicians to care for patients the 360 days they’re not in the doctor’s office, which has always been a nice ambition, but is now starting to become a required core competency.

For the most part, I think the more practical near-term solutions are going to be simple things that collect small data from the caregivers who are interacting with patients, either on the phone or in person, with simple apps that ask, “How are they doing? Are they taking their medication? Are they eating? Are they sleeping? Are they moving around? Has there been a change in their mental status?” And taking that data and somehow connecting it to providers’ workflows or to third-party services they contract with to monitor and triage.


Adam, Doctor on Demand is directly impacting where and how we’re delivering care. It appears to be getting strong traction among providers and payers. Can you elaborate, perhaps, or explain how a telemedicine platform truly improves care and reduces costs?

Adam Jackson:

We have our network of several hundred board-certified physicians across the country. We partner with great health systems. We do the low-acuity stuff. We keep you out of urgent care for a sinus infection. We keep you out of the emergency room for pink eye. You’re improving access and reducing cost greatly there.

We reduce re-admission rates because we’re keeping people at home. For bundled payment solutions, let’s do these post-op visits at home over video.


Sanjay, how do you evaluate the viability of disruptive technologies like telemedicine and the solutions they present for a system like Dignity Health?

Sanjay Shah:

It’s probably more like a venture evaluation of the technology and company. It doesn’t need to be necessarily the best idea out there, but rather that the management team is going to be able to execute this concept and they’re going to be flexible to work with us.

I think workflow is the most misunderstood item coming into any relationship with a provider. When a team or a startup understands or is quickly able to learn what it’s like to work in our environment, they succeed exponentially faster.


So you’re looking less at new ventures on a stand-alone basis and more in terms of how they fit into your system?


Yes. Though we’re happy to have partners help us rethink what we think our system is. You always have your strategic vision but you also say, “We will allow ourselves to think differently as things evolve.” Partners can help us do that.


Tom, I’ve got to imagine CVS is similarly situated in terms of being able to evaluate what, within your system, is working and what’s in need of solutions. How does that shape CVS Health’s thinking in terms of evaluating a potential technology to invest in, acquire or partner with?

Tom Moriarty:

We have examples where we’ve done homegrown product development because that’s been the best solution. We’ve had other situations, though, where, literally, it’s a relatively small company of maybe $50 million to $20 million a year in revenue, but when you place that capability on top of the CVS engine, it becomes a multi-hundred-million-dollar opportunity just because of the scale we can bring to it.

Workflow is hugely important. We have 22,000 pharmacists just across our footprint. When you come in to talk about a solution, you really have to be cognizant of that workflow because it may be the best solution ever, but if there’s not a way to work it into the workflow, we can’t work with it. So scalability and interoperability become hugely important.


From McKesson Venture’s perspective, you have a great view of the ways these new technologies and startups interact with much larger organizations. What are you seeing?

Tom Rodgers:

Stakeholders inside health systems and health plans are trying to digest a shocking amount of change in how they will get paid and regulation about what they must do while also evaluating technologies in their spare time – after they plan and implement for the shift to ICD-10 and Meaningful Use 1, 2, 3. There’s no shortage of really important problems that need to get solved. But if startups aren’t lining up against a top priority problem, it’s going to be a slow, painful walk – probably to nowhere. Many compelling and ambitious companies will unfortunately get stuck in pilot purgatory.


I want to touch on point of care and how that concept is evolving, particularly as it relates to the interplay between brick-and-mortar and technology. Do we get to a point where technology does away with brick-and-mortar facilities? If not, what is the interplay between them?


I think we’re in a click-and-brick system today. The brick facilities remain relevant as a point of care. However, what has changed is that they also need to have some form of click – an app or interface. I don’t know when we’ll get to all click. At some point you’re always going to want to say, “This person needs to see a physician.”

So it’s this question of what’s the appropriate mix of brick interface with the click tools? It’s who do we partner with to add to our click interface?


Adam, how do you reconcile telemedicine with the concept of urgent care or ambulatory care? Are they competitive to one another or collaborative?


It’s all collaborative from our perspective. We’re a video-based medical practice. There’s only so much we can do. We’re certainly not disintermediating the primary care relationship. Some people may want to rely on us for that, but we don’t want them to. So, we need good partners in the brick-and-mortar setting to whom we can refer our customers for that yearly checkup, to do the lab tests and do all of the many, many things we can’t do over video.

We exist to help ease that pressure on the system and to help almost triage and direct people.


Consumers have been quick to adopt a variety of mobile technologies that enhance many aspects of our daily lives.

Healthcare, however, seems different. There are a lot of other market forces at play, including hospitals, payers and physicians.

What’s your view of how startup technology companies can partner with other healthcare players to influence consumer acceptance of their technology?


Coming at this from a pure consumer perspective, healthcare is so different. Something can make sense logically, then you go to implement it, and it just dies. For us, if you solved a really hard pain point and implemented it the simplest way possible, that’s where you get traction.

I’ll actually use CVS’s mobile app as an example. It’s usually the top-rated mobile app in the app store. I’m a CVS customer. A lot of it has to do with how they make the pharmacy experience better. Going to the pharmacy and being in queue and all that can really suck or it can be really good if you leverage the workflow that they have created for the consumer. That’s a rare consumer win in my mind. At Doctor on Demand we do the same by keeping you out of an urgent-care waiting room.

There are all these other things that are available to consumers; try to use some of them. One in particular is like the digital version of the DMV. It’s a nightmare to get through.


Sanjay, as you’re rolling out product, how do you measure consumer acceptance in terms of adoption of one technology versus another?


I think every hospital group and every healthcare provider is looking at the value of patient experience. Everything that you spend into that, if you deliver well, has a great multiplier on it. It’s hugely valuable. It’s still being developed as an understanding of what we do as a service industry, and understanding that anything we do is fair game.

Your healthcare experience is like your banking experience. If you had an unfavorable interface with an ATM, you’re upset with your bank. If you had a tough time parking at one of our facilities, or you had a bad experience with our technology, you’re upset with us. It’s not just that clinical interface anymore. That’s how we have to think about it.

Tom Rodgers:

I think we’re in a great period of experimentation. The key is finding partners who will actually force change through and steer people toward it. Startups need to avoid partners who just give them shelf space or a hunting license but who do not truly incent usage.

You want people who are going to force the change to really give you the opportunity to prove that you’re good at this future core competency that they will need.

Tom Moriarty:

I agree with all this. I think if you take a few steps back, healthcare is complicated and scary for consumers. So, the less complicated and friendlier that you can make it, the more successful you’re going to be. We look at customer satisfaction rates across the board, whether it’s on the app, at the pharmacist counter, on the phone or other things along those lines.

You’ve all seen it even in just the hospital experience, where, if you’re in the waiting room and there’s actually a nurse assigned to the patient, she’s coming out to tell you what’s going on in each step of the process. You feel much more involved, much more a part of it and much more comfortable with the experience.

All these elements of human and emotional behavior are really starting to get wrapped into the total healthcare experience. Companies that are very focused on that and concentrate on it are going to have a better member and customer experience as a result.