4 Things Digital Health Innovators Need to Know about Compliance

4 Things Digital Health Innovators Need to Know about Compliance

Deb Somerville

Deborah Somerville is a seasoned compliance expert with deep experience in healthcare and digital health environments. She’s held leadership positions at Everlywell, Genomic Health (now part of Exact Sciences), and Genentech, among others. Here, she shares four important lessons about the emerging area of compliance as it relates to digital health companies.

1. Gray areas are the norm.

Laboratory-developed tests (LDTs) have “regulatory discretion” with the FDA, which means that the FDA tends to pass off regulation of these tests to the Center for Medicare and Medicaid Services (CMS). That leaves lots of question marks for digital health.

Digital health founders sometimes think that bringing in a compliance officer will get them a quick answer to the question of “Can we do this?” But there are not a lot of legal precedents or enforcement activity in our space. Market access for digital health is a murky soup—a lot depends on who you are marketing to. A compliance expert can help you clarify what is possible; sometimes you need to take a matrix approach to sort out exactly what applies to your product.

2. Compliance matters after an FDA clearance.

The agencies are saying “Tell us what you’re doing, and keep really good records, because we are all figuring this out.” For example, it’s important to set up a system to track communications. You don’t want to rely only on a verbal agreement. Transcribe all phone calls so you have a permanent record, send them back to the FDA, and say “Did this capture our conversation?”

It’s a requirement to track adverse events, including when the authorization is an emergency use authorization (EUA). The FDA is also interested in usability data, which is information beyond what is required for authorization. It helps with your relationship with the FDA to keep a database. For example, how do people feel about at-home tests? Do they sit on the kitchen counter for several days before they get mailed? What do the instructions say, and does feedback indicate they are easily followed?

Something else about working with regulators: If you make a mistake, and can show that there was a process and internal controls in place for decision making, and after the fact realized you didn’t use super-great judgment in reaching your decision—chances are the regulators won’t be extremely harsh. This was generally the case in life sciences overall, and now we are seeing this in digital health, too. And, it’s important to be proactive when you do discover such a “miss.” Self-disclosure is key.

3. Seize opportunities to influence emerging requirements.

Privacy, for instance, is one area where this is possible: The use of AI is expanding, and the ethical use of data derived by AI is a significant area. Will there be more regulation in this area? Changing regulations? It’s a great time for digital health innovators to get in and mold that regulation, for example, by lobbying, or by joining with other companies to respond with a white paper.

4. Expect a healthy tension between compliance and marketing.

For example, when you’re going through the FDA authorization process, once the FDA is familiar with a product, they will say, based on the product’s intended use, “Ok, this product will be called XYZ.” And it might be a very long name, which for a marketing person might be challenging to use in various media. But in this instance there is no room for negotiation—that is just how the FDA works.

In other instances, as a compliance professional, to find the best path forward I first have to think like a business person. Social media is a great example: How can we say what needs to be said in that media where we may have only a tiny bit of space? The way I think it through is, “What is the risk that I’m protecting the company from? How likely is that risk to be exploited? Can I quantify it—i.e., worst case, what would be the cost to the company? How much wiggle room—if any—do we have to take on a bit more risk?” The decision will be made by consensus of the executives, and rightly so, but the recommendation comes from the compliance person. As a team, we must be aligned to achieve our objectives, so education is a factor in that equation, too.

At MDisrupt we believe that the most impactful health products should make it to market quickly. We help make this happen by connecting digital health innovators to the healthcare industry experts and scientists they need to responsibly accelerate product development, commercialization, adoption, and scale.

Our expert consultants span the healthcare continuum and can assist with all stages of health product development: This includes regulatory, clinical studies and evidence generation, payor strategies, commercialization, and channel strategies. If you are building a health product, talk to us.

How can digital health innovators successfully sell to health systems?

How can digital health innovators successfully sell to health systems?

Ron Rerko

Meet Ron Rerko, head of clinical solutions at Soteria Precision Medicine Foundation and executive director of genomics at Family Care Path.

podcast available

With over 20 years of experience in cancer research—and 13 years at the Cleveland Clinic as director of genomics in the Genomic Medicine Institute—Ron has developed and implemented programs in medical genetics, genomic medicine, pharmacogenomics, and telehealth, as well as extensive business development efforts.

Digital health startups don’t always take the optimal approach when it comes to engaging health systems. Ron shares his advice for best practices with the MDisrupt community.

Healthcare today

MDisrupt: Can you describe the state of the healthcare system?

Ron Rerko: Health systems of today mostly practice sick care, not well care. Within this system, costs are rising faster than annual incomes and this is not sustainable. The cost of insurance premiums is outpacing the ability to pay. Family costs have increased by 180% since 2000. And 45% of people in the US say they would have difficulty paying an unexpected $500 medical bill. We have a tenuous, fragile system that desperately needs help and innovation. And, unfortunately, the cost of care does not always equate with good care. The healthcare ecosystem, which is like a cottage industry of a lot of different parts, is trying to figure out what the future holds given immense financial constraints, worsened by the COVID-19 pandemic, and multiple disruptors moving into the market.

How to pitch to health systems

MDisrupt: How should digital health entrepreneurs pitch their products to health system executives?

Ron Rerko: Pitch a product that opens up new revenue sources and/or saves money, and that provides positive outcomes for their patients. Hospital systems are dealing with millions of dollars of losses, especially due to the pandemic, and are up against fundamental performance measure changes with implementation of insurance reimbursement in a value-based care model.

The first thing you have to do is understand your business champion—an executive, physician, nurse, or researcher—and know what’s important to them and how you can help solve their problems. Leave the sales mentality at home. Be their partner and understand their pain points and show how you’re going to help them instead of just selling to them.

Avoid these rookie mistakes

MDisrupt: What are mistakes digital health companies make in selling to health systems?

Ron Rerko: Let me focus on things you should not do and then we’ll figure out how to craft the best value prop. The thing you should not do is go into systems cold. You’ve got to understand the system and the culture. You need to understand the type of individuals you are talking to and the challenges they are dealing with.

They have jobs that they’re trying to do, stresses that they have to deal with. So you need to connect with them as a person. It is best to have a “Sherpa” or someone along with you to navigate the system, because if you try to go in cold it usually doesn’t work.

And one thing to remember is, you cannot make a strategic mistake. Once you go into a system and make a blunder, that usually gets around. Hospitals have very long term memories about companies and people. So if you make a mistake or two in a system, you probably won’t even be able to come back for a while. You want to educate yourself and make sure that you’re approaching the opportunity the best way possible.
Also hospitals are ecosystems, not single entity units. You’ve got to figure out the best way to enter the system and what’s the value prop for that specific entity.

The future of genomics in healthcare

MDisrupt: What will it take for genomics to be standard practice within the healthcare ecosystem?

Ron Rerko: The standard practice of genomics is not going to be an “if”—it’s a “when.” It’s already in practice in a lot of places. Cleveland Clinic, for example, has a very advanced genomic medicine institute. Genomics is used in cancer treatment, pharmacogenomics, hereditary cancer identification, cardiovascular care, and non-invasive prenatal testing.

The problem is that it’s very complicated and a rapidly moving field. A lot of this information has really come out only in the last decade or so. Physicians who were in medical school even just 10 years ago may not have had a lot of this information. The generation of new information and the integration of this into clinical care are moving at a rapid rate.

We’re finding new and informative things every day and using sequencing to look at your DNA, to determine what drugs you metabolize, what foods may be good for you, and what diseases you are at risk for. Physicians are expected to see more patients, incorporate more info into care and at a faster rate. They don’t have a lot of time to incorporate this complex information into their clinical workflow—for example, how to understand the reports and make sure it’s the best thing for their patients. Physicians are just struggling to keep up with the demands of their normal practices, let alone start to integrate these advanced products.

Soteria Precision Medicine Foundation is utilizing genomic medicine to help people dealing with cancer and acting as an advocate for the patient and supporting them with their oncologist. It is a slow process because all the pieces need to integrate into a clinical workflow. It is happening, but will be difficult continuously integrating advancements over the next couple of years.

Why listening is essential

MDisrupt: What advice would you give digital health innovators as they are developing products and pitching to health systems?

Ron Rerko: There have been times during a meeting where I’ve talked for two minutes and thought, “This is going to work much better if I listen and learn about their problems.” I’ve had to pivot and understand more about what they are going through, what they need help with, and then understand how my offering could or could not benefit them. We end up developing a rapport and a connection because we’ve listened to each other.

One of the things I would tell a founder of a company is, don’t bring your ego into the room. Just leave it at the door and say, “I’m here to help and I’m trying to work with you.” And another piece of advice is not being afraid to fail. If something didn’t work, I’ll step back and say, “Why didn’t it work and how can I adjust in the future?” I’m even appreciative when a potential customer will tell me why it’s not working and what they saw, because that allows me to learn more and make my pitches better. It’s being able to accept those criticisms. That’s part of the process.

At MDisrupt we believe the most impactful health products should make it to market quickly. We connect digital health innovators to the healthcare industry experts and scientists they need to responsibly accelerate product development, commercialization, adoption, and scale.

Our expert consultants span the healthcare continuum and can assist with all stages of health product development: This includes regulatory, clinical studies and evidence generation, payor strategies, commercialization, and channel strategies. If you are building a health product, MDisrupt can help. Talk to us.

How Health Economists Add Value to Digital Health

How Health Economists Add Value to Digital Health

Ragan Hart

Ragan Hart, MS (public health genetics), PhD (health economics), is a co-founder of MDisrupt and its director of operations. Previously, she served as entrepreneur-in-residence at F-Prime Capital. Ragan recently celebrated her one-year anniversary with MDisrupt, and sat down for an interview to talk about the career path that brought her from science to startup.

Bringing innovation to the clinic

MDisrupt: Why did you choose to study health economics?

Ragan Hart: I was an exercise science major doing lab work in the genetics of diabetes, and I wanted to better understand genomics tools and sequencing. That led to an interdisciplinary graduate program in public health genetics. I was very interested in biostatistics and how to get these technologies to the clinic.

With colleagues who were physicians, research scientists, genetic counselors and others in an academic medical center focused on genetic testing, I kept hearing, “Payers don’t want to pay for this.” And so I asked, “What type of evidence do the payers need? Are we having conversations with payers?” And the response was, “No, we haven’t been engaging payers.”

That was pivotal. I said, I need to train in applied health economics to understand payer decision making. Economics and business are two things I wish had been introduced to sooner.

MDisrupt: What did you envision for yourself in terms of a career?  

Ragan Hart: I definitely knew I wanted to work in industry. I didn’t know the term commercialization at that point, but I was absolutely trying to find my way into commercialization. I knew I had an understanding of startups in the genomics diagnostics space. So I started following the market of early stage venture capital into a set of these companies. I really started to understand the different levers at play for health tech adoption.

MDisrupt: Why did you decide to join MDisrupt?  

Ragan Hart: Because I absolutely understood the mission that MDisrupt was founded to serve—getting the most impactful health products to market faster and more responsibly—and I wanted to be part of that. I wanted to have a role in connecting scientists and health experts to digital health founders. I pride myself on being able to appreciate new ideas; I value a lot of lessons learned from the tech sector and I want to be part of figuring out how we can bring this into health care.

How health economists add value 

MDisrupt: How do you see health economists as helpful to digital health companies?

Ragan Hart: Health economists can help digital health companies by identifying:

  • Who are the stakeholders?
  • What are their economic incentives?
  • How do we build a product that can meet those incentives?
  • What evidence do we need to generate?
  • How do we assess how well the product performs in a clinical setting?
  • What’s the added value? For example, is this improving quality of life? Are cost savings being generated?

From a value proposition perspective, the digital health companies may have a really awesome product. But it’s also critical to their success to be able to articulate why their product should displace standard of care. Applied health economists can support economic evaluation for cost effectiveness studies—evaluating the new health technology against whatever is currently being used and comparing cost effectiveness.

Often, costs are going to be increased by investing in new health technology. But we’re getting this gain in the quality outcome or the health outcomes. The next step of data that needs to be generated is, can the purchaser who’s evaluating this technology afford it?

And so applied health economists can generate budget impact data, honing in on the financial consequences for adopting the new health technology. These are things that a health system needs to know, and in an ideal world, maybe the health system would do that kind of analysis. But they don’t necessarily put resources into doing it, so it really has to be done by the digital health company themselves. However, in the healthcare industry’s transition to value-based care, we may start to see more health systems identifying gaps from a cost-benefit perspective.

Integrity as the North Star

MDisrupt: Can you describe a challenge you’ve faced that’s been formative to the way you work now? 

Ragan Hart: In the academic space, something came up where a senior individual was operating without scientific integrity. The challenge was a dilemma for whether or not to say, yes, we’re willing to accept your lack of scientific integrity. There would have been limited consequences for everyone involved. I was really fortunate that my advisor said, look, here are the two options. And this one—to accept the lack of scientific integrity—is not an option. And that forever changed my ability to be able to navigate situations from that perspective. 

MDisrupt: Can you say more about that? 

Ragan Hart: It allowed me to anchor myself in thinking through the competing incentives, and, going back to my economic roots, that everything is about tradeoffs. It was a valuable lesson in what’s the North Star, and, when are we allowing ourselves to veer away from that? At what cost?

Health startups need scientists

MDisrupt: What advice would you give other scientists who might be thinking about working with a health startup?

Ragan Hart: Do it! Startups building health products need individuals who have critical thinking skills and subject matter expertise. They also need to generate data and evidence that their products work and are safe, effective and clinically useful.

Oftentimes, scientists are conflicted and wonder, Well, am I still going to be in an environment that maintains the academic rigor, intellectual curiosity, and stimulation of the academic environment? The answer is yes, tenfold in a startup environment. Because you’re also getting to cultivate new skills on top of contributing domain expertise you already have. It’s incredibly enriching.

Fresh ways to work

MDisrupt: What have you discovered in your role at MDisrupt that’s been fresh and surprising for you? 

Ragan Hart: I’ve been exposed to the value of marketing. And building trust with colleagues and working in a team. Previous environments have been quite siloed and building that bridge and rapport hasn’t been valued as much. It’s so valuable, because we’re trying to build and execute on the same mission. And I’ve learned that it’s OK to depend on others. Necessary, in fact.

MDisrupt: Can you say more about that? 

Ragan Hart: Building off of that trust piece, there are too many critical things that need to be completed to meet the goal, and not one of us can complete them on our own.

MDisrupt: What would you say to scientists who might be interested in joining MDisrupt?

Ragan Hart: It’s an easy way to work with digital health innovators. It’s about being able to apply your scientific skills in a new environment. And the energy and pace are invigorating! You are able to contribute to getting your science placed in the hands of patients or providers or health systems or whoever the intended user is, faster and more responsibly with data. Scientists don’t often have that opportunity.

At MDisrupt we believe that the most impactful health products should make it to market quickly. We help make this happen by connecting digital health innovators to the healthcare industry experts and scientists they need to responsibly accelerate product development, commercialization, adoption, and scale.

Our expert consultants span the healthcare continuum and can assist with all stages of health product development. This includes regulatory, clinical studies and evidence generation, payor strategies, commercialization, and channel strategies. If you are building a health product, talk to us.