MDisrupt—building the gig economy for health industry experts

MDisrupt—building the gig economy for health industry experts

MDisrupt Podcast

MDisrupt—building the gig economy for health industry experts

Ruby Gadelrab, CEO and Co-founder of MDisrupt, the first-of-its-kind medical diligence company, discusses how they are helping health-tech startups demonstrate viability and bring health products to market faster and more responsibly. The company is also launching an on-demand health industry expert platform to connect a wide range of highly specialized medical and scientific professionals with emerging health tech companies that will most benefit from their expertise.

If you are a health industry expert join us!

Going global: Taking your health product to international markets

Going global: Taking your health product to international markets

US medical device and molecular diagnostics (MDx) developers are often laser-focused on establishing and growing their businesses stateside, with little to no attention paid to some important international healthcare markets. For example, the medical device market was expected to reach $150 billion in 2017 in the US alone—certainly a sizable market. However, when looking outside of the US, the global medical device market was set to reach close to $400 billion. The key to successful international growth is understanding which markets are truly accessible to you and mapping out a go-to-market strategy for each region.

Over the last 15 years, I have helped several startups expand their businesses to more than 30 markets globally. It has been a hugely rewarding (but mostly humbling!) experience. In joining the MDisrupt team, I now feel I can help so many more companies cross borders with their technology in a strategic, risk-mitigated way. I can help you ask the right questions and make the right risk calls as you contemplate international expansion.

Diversify your portfolio

Why should you consider expanding your business internationally? More than simply expanding your total addressable market, it’s a risk mitigation strategy! While most US companies consider international expansion to be fraught with risk and complexity, they fail to realize just how volatile the US market is and just how quickly their best-laid plans can fail. One swift action by the FDA or one unfavorable coverage determination by a top US payers can compromise your game plan before you’ve even gone to market. Going international with your product is like diversifying your investment portfolio: you can mitigate the risk of unexpected downturns in any one market.

As a topical example, COVID-19 has not impacted all countries uniformly. In fact, while case numbers were steadily rising across Europe and the US, my partners in Singapore were already recovering thanks to early containment measures. As a result, Singapore, Australia and some other international markets fared much better in the face of this global pandemic and were able to resume normal business activities before the close of Q2’2020. If your business model relies on revenue from US hospitals alone—hospitals now completely overrun with COVID-19  cases—the pandemic may pose an irrecoverable threat to your company.

Look for easily accessible international markets first

When should you consider doing this? The short answer is as soon as you have the opportunity to do so without compromising your product and market developments in your priority market. For startups, this is always a difficult decision due to resource constraints. For instance, Brazil is a seemingly attractive opportunity, boasting Latin America’s largest hospital market, but you should be aware of its prohibitive import tariffs and product registration requirements.  Brazil may not present a near term opportunity given that  you will have to invest substantially in product regionalization, translations of collateral, and regulatory approvals. Always invest in your priority market development first, and at the earliest opportunity, identify an international market that is relatively accessible. A good choice is one which requires little product regionalization (perhaps the dominant language is  English) and one that doesn’t pose significant regulatory or product registration hurdles. One such example in Latin America is Colombia, the region’s third-largest economy and one that has business-friendly economic policies. You may be shocked to learn that some international markets are easier to sell into than your own!


Options for international expansion

There are three general approaches to international business expansion:

  • Direct to market: As the manufacturer, you will set up a local entity and sell your product directly to clients. This means you are responsible for all client support, client contracting, local marketing and hiring locally, etc.
  • Distributors: An in-territory company is contracted to represent your company under exclusive or non-exclusive distribution terms. Most distributor agreements are time-bound and subject to sales performance targets negotiated between the parties. The distributor manages all client relationships and generally assumes responsibility for marketing and client support. In this scenario you will need to support the distributor company with training and marketing materials and generally the distributor will expect a margin of 25-35%, depending on whether the product is an instrument, a consumable, or a medical device.
  • Tech-transfer (licensing): Under a licensing agreement, you will transfer intellectual property rights to a third party to manufacture, further develop and/or sell your medical device or molecular diagnostic. These agreements contain terms related to revenue expectations and a proposed royalty structure, as well as territory and renewal terms.

The go-to-market approach that is right for your company depends very much on the following factors:

  1. The stage of your product in the technology adoption life cycle. If your technology is so innovative that you find yourself in the “early market” phase, you don’t need a distributor, you need market developers. Market developers are key opinion leaders in your field who are critical to the early adoption and validation of your product (or concept). They are highly published and influential in their respective fields. When you’re in the early market phase, there is nothing more critical than building relationships with these key opinion leaders. They will help you build evidence and credibility behind your product and will help engage the “early majority” to cross the chasm (see Fig. 1). At this stage, your biggest competitive threat is the status quo, and a typical distributor will not spend time developing your market for you when they can sell something else more easily.On the other hand, if you have a product for which there are known or established predicates in-market, then you may find yourself in the “mainstream” market. In this case, it would be perfectly appropriate to seek a local representative for your company as they can help you set competitive pricing and competitive positioning for your product. At this stage, your biggest competitive threats are the incumbents who have been in-market for some time before you and who you will have to displace. Here, distributors are a good fit because there is an established market for your product which they presumably understand and know better than you.

Fig. 1

Going global: Taking your health product to international markets 1
  1. Local supply chain practices: In some countries, like Japan, you have to sell your products through an in-country distributor. In Japan, hospitals are contracted with local distributors for all of their medical and health tech supplies. The customary “kereitsu” structure remains prominent, and you must be familiar with this structure and partner with the right distributor to access your target clients. In other countries, import permits for medical devices are only granted to local companies, so you may have to work with a local distributor in these cases. Alternatively you may opt to have a third party like EMERGO file your device registrations, and designate them as the permit holders if you don’t want to be beholden to a commercial distributor.
  2. How well you know your market and your user: many companies in the “early market” stage make assumptions about what the market needs. Are you confident you understand the market problem your product is solving and furthermore, are you confident that the market will pay your asking price to fix it? (See our blog on the 8 common mistakes healthtech companies make when building their health products) You may find it beneficial to take a direct-to-market approach initially, to allow direct communication with your user base. These types of market insights may not be relayed to you if you are working through a distributor. You could find yourself with a distributor who is under-performing and you won’t understand why.
  3. Privacy laws: a growing number of countries now restrict the export of genetic samples and of genetic data. In fact, the enactment of GDPR by the European Commission in 2018 has set in motion tighter privacy laws around the world. If you are a molecular diagnostics developer, this may cause you to have to consider either buying or partnering with a local lab to both process test samples and interpret test results. It may mean localizing your database, too. If the market opportunity isn’t sizable enough to consider setting up your own operations, then an out-licensing model may provide a viable path to market.

Date before you marry: finding the right distributor for your company

Should you determine that the distributor/channel model is the best path to market for your company, you should plan to invest some time doing your due diligence on prospective partners. Getting this step wrong can cost you greatly and can cause irreparable harm to your client relationships. Here are some things to consider:

  • Network: Inquire about current sales channels: who are the distributor’s current customers? How well does their client list overlap with your target list? How well connected are they with relevant key opinion leaders in their region? Inquire about their current product roster and sales performance to gauge their level of penetration in the market and their ability to close and manage large accounts.
  • Reputation: your product may be best-in-class and best-in-market, but if you’ve tethered yourself to a partner who has soured relationships with potential clients in the past, you are wasting your time and may not even know it. You should ask for a client reference list and ask institutional partners in that region for any feedback about the distributor.
  • Resident expertise: what skill set is needed to engage the top clients and train them on your product? Does the distributor have those resources in-house? For instance, if you are selling a pharmacogenomic test, you will want to look for distributors who have resident pharmacists or pharmacologists on staff.
  • Communication: There are a few rules of engagement when dealing with international clients and partners: Learn to pronounce their names properly and ask them for help if you’re unsure. This may sound basic, but it’s not. It’s incredibly important for showing respect, and it’s also very helpful to learn how to pronounce foreign names, because then you can track conversations more effectively. Make an effort, as they do with you. Second, if you don’t speak the local language(which is often the case), make sure that your point of contact is fully fluent in your language. Those 11 pm phone calls will be much easier.
  • Accreditations: Select a partner who will be a good steward of your company’s brand. Ask them about their company’s values and ask them what other companies they are representing. You should also ask for proof of any relevant accreditations (ISO, CLIA/CAP, NATA, as the case may be).
  • Salesmanship: ask them to pitch you your own product, slide deck and all. You want to see a) whether they have done their homework and b) how much they understand your product’s value proposition.
  • Street-price: In some countries (Hong Kong, Japan), the distributor model is layered, the result of which is an inflated street price. Make sure you agree on a street /retail price range.
  • Trial period: There is mutual benefit to both the distributor and the manufacturer to evaluate the business relationship with a short pilot or a trial period. The distributor can begin marketing your product and understanding what resources will be needed to successfully sell it. Throughout this period, you will be able to gauge the distributor’s effectiveness. In my experience, you can catch several red flags through this process!

Going global with your health tech product can be transformative for your business and can help you absorb inevitable market fluctuations. A carefully crafted strategy which considers the status of your technology’s adoption life cycle and a risk-benefit analysis of the path to market (direct, channel, or out-license) is of critical importance to the success of your international expansion.

Morgan Donaldson, MDisrupt

Morgan Donaldson, VP of Business Development, MDisrupt

Morgan Donaldson is a business development executive with more than 15 years of experience bringing genomics technologies and molecular diagnostics to global markets (EMEA, LATAM, APAC, North America). She has developed international sales channels, managed business development teams, led product developments, led contract negotiations with Fortune 500s and participated in due diligence assessments. She has led the international growth strategy for several genomics startups in the Bay Area and in Canada.

Whether you are an international company and looking to bring your health product to the US, or a US company considering global markets, MDisrupt can help you ask the right questions, prioritize target markets and de-risk the process for you.

Talk to us—we can help.

MDisrupt One Year On—A Year of Transformation

MDisrupt One Year On—A Year of Transformation

The only constant in life is change. And nowhere is that more true than in your first year as a start-up.

As many of you know, MDisrupt was founded a year ago because we believed the healthtech world was lacking “medical diligence”. We believed this was the missing link in the market and the reason why so many healthtech startups were stumbling on the path to successfully commercializing their health products.

We originally created MDisrupt to identify healthtech companies who were at risk of becoming the next Theranos, or uBiome. Our hypothesis was that if investors undertook more rigorous medical diligence, they would be able to more easily identify and evade potential investments in companies that were not clinically or commercially viable, or who were not taking the appropriate regulatory path.

Like any start-up in its first year, we had ups and downs, learned a ton and we soon identified our true direction – to play an even more constructive role in the healthcare / healthtech industry than we had originally planned. Luckily we were small and nimble enough to be able to react quickly to the market dynamics and, while some of the changes were tough, they forced MDisrupt into a stronger, better place. I want to share with you the ways we have changed and the lessons we learned along the way. 

Changing Focus – Healthtech Investors Were Not The Primary Customers For Medical Diligence

It turned out that healthtech investors were not our primary customers. There is not really a ‘budget’ for medical diligence in an investment transaction. Tech funds source health subject matter experts from within their network to conduct diligence, whereas, bio and life sciences investors already have health domain expertise on staff.

We soon found that it was the bigger and more established health companies that had utility for our medical diligence services to provide an objective external third party view and address their needs in a range of fundamental areas such as: 

  • Benchmarking: 
    • “How do our clinical standards as a laboratory compare to other clinical labs?”
  • Mergers and Acquisitions: 
    • “We are considering an acquisition and want to understand the new market of the company we are acquiring.”
  • Market Sizing: 
    • “We are launching a new product in a new market and want an objective view of the market size and opportunity.”

Our True Market: Healthtech Truth Seekers Wanting Much More Than Medical Diligence Services

While we had limited traction with investors, one of the most inspiring parts of the last 12 months was meeting the healthtech founders who were determined to build their companies responsibly and cared deeply about building impactful, scalable and data-driven health products. But they did not just want our medical diligence assessments, they wanted access to us and other health industry experts to help them build their health products well in the first place. They were aware of how other healthtech companies had stumbled in their early days and did not want to make the same mistakes. 

These companies wanted our help to solve problems such as: 

  • Should my test be an LDT or an IVD?  Is it a health or wellness product?
  • What is the appropriate regulatory path I should take in the US?
  • How do I find a part-time Chief Medical Officer?
  • How do I access the self-insured employer channel?
  • What is the right strategy for engaging healthcare providers and payors?
  • Help me define a marketing strategy for reaching medical audiences.

Even the investors we engaged with in our early days, started to connect us to healthtech companies in their portfolios. Very soon we were overwhelmed with these types of requests and had to start tapping into our network of colleagues to help us on these projects. We quickly realized that our real market was helping the healthtech founding teams themselves.

Uncovering The Unmet Need: “The Gig Economy For Health Industry Experts”

As we began to reach out to our networks for help on these projects, and with all the press coverage we received when we launched, we were inundated with support from experienced health industry professionals and colleagues. The same key themes emerged: 

  • It is about time someone helped improve standards of health products. 
  • How can I help and get involved? 
  • Can I work for MDisrupt?
  • I want to work with healthtech companies and help them get to market quickly and safely.
  • How can I find the healthtech companies who could use my skills and expertise?

We heard from our client healthtech companies that they were struggling to access the experts they needed and here we were with hundreds of emails from passionate, experienced experts ready and willing to help. That was the moment we realized that the real problem we needed to solve was how we could provide easy access to experienced, vetted health industry experts. We knew then what we needed to build into the MDisrupt platform – a health expert two-sided marketplace. 

And so we did.  To date we have 58 consultant subject matter experts spanning the healthcare continuum, averaging 10 years’ experience in their discipline. Our expert consultants include:

  • MDs
  • Scientists
  • Market Access Experts 
  • Regulatory Experts
  • Commercial and Channel Strategists 
  • Lab Test Designers 
  • Clinical Trial Designers 
  • Health Economists

Many of these industry experts are still practicing and so are able to provide the most current perspective within their disciplines. They are able to assist healthtech companies in a variety of capacities including: 

  • Experts-in-Residence 
  • Part-Time Chief Medical or Chief Scientific Officer 
  • KOLs 
  • Medical or Scientific Advisory Boards 
  • Consulting Projects 
  • Expert Opinions

Engaging these health industry experts as consultants has enabled us to solidify our mission of helping to bring the most impactful health products to market faster and more responsibly by uniting the healthtech and healthcare industries – benefiting from the best of both worlds.

The Covid-19 Pandemic: An Unexpected Driver In Uniting The Healthcare And Healthtech Worlds 

As we entered 2020 the onset of the coronavirus outbreak changed the world for us all. Never has healthcare, healthtech and science been more in the spotlight than over the past 6 months. Very soon we started to see healthtech companies make significant shifts in their business models to help address the global pandemic. Some examples of these include:

  • Lab testing companies that wanted to shift into developing Covid-19 Testing 
  • Telemedicine companies that had to scale significantly 
  • Instrument companies that had developed products for adjacent industries wanting to move quickly into clinical lab testing 
  • Behavioral apps who pivoted to address mindfulness and stress-management issues arising from lifestyle shifts due to prolonged shelter in place mandates
  • Regulatory and clinical activities for “Back to Work” scenarios – how employers, colleges and schools can bring people back safely

Once again, we have been inundated with requests for health industry experts to help healthtech companies make these pivots and transitions. Increasingly, healthtech companies are seeing the value of having scientific and medical experts as core parts of their teams to help them navigate the new opportunities that the pandemic has brought to the industry.

As Start-Ups Evolve, So Do Their Teams 

Earlier in my career, while working for a start-up, a wise CEO told me that the people that found a company are not always the same people that grow the company, or scale it or take it public.  Teams evolve and different people and skills are needed for different stages of progression. 

MDisrupt was founded by myself and my close friend and colleague Jill Hagenkord, who I nicknamed the “Godmother of Precision Medicine”. We founded MDisrupt with the mission of helping bring the most impactful health products to market faster and more responsibly by uniting the healthtech and healthcare worlds. Today is the one-year anniversary of MDisrupt and, while that mission has not changed, it is bittersweet for me to announce Jill’s departure from MDisrupt. Jill was offered an incredible opportunity that she could not refuse and she is off to pursue her next amazing adventure. I don’t want to steal her thunder by announcing where she is going until she does, so stay tuned for her announcement. I am so incredibly grateful for the blood, sweat and tears Jill poured into MDisrupt working alongside me over the past year and how she helped turn a glimmer of an idea into a business that can truly make an impact for so many companies. Myself, and the MDisrupt community she helped to build, thank her for her dedication, passion and brilliance and we will be cheering her on as she embarks on her next journey.

We have also been lucky enough over the past few months to add some new and incredibly talented people to our team:

Ragan Hart, MS, PhD – Director of Operations and Business Development 
Ragan is an applied health economist, who evaluates clinical genomics and digital health technologies.  Learn more about Ragan Hart

 Dr Pamela Mehta – VP of Medical Affairs 
Dr. Pamela Mehta is a board certified, practicing orthopedic surgeon and the founder of Resilience Orthopedics. Read more about Dr Mehta 

Please join me in welcoming them to the MDisrupt Community!

A New Year, A New Look

As a health product marketer by blood, I believe it is important that a brand is not only representative of your company’s personality but also a critical communication vehicle for your target audiences. We serve both health innovators and our health industry experts equally. Our goal has been to create a brand that resonates with both sectors, keeping the modern feel that the healthtech industry is accustomed to, but enriching this with content written by our experts to address the real issues entrepreneurs may face as they take on the challenges of responsibly building scalable health products.  

 We also wanted to make it easier to showcase some of our experts’ skills and create simpler ways for health companies to find them. So we gave ourselves a rebrand – take a look at our new website, we welcome your feedback. I want to thank Paul Bohanna, our creative and technical director who has worked tirelessly over the past few months to reimagine our brand and build our website. 

A Company Is Only As Good As Its Network of Supporters – Thank You

As with any start-up, the first year is a year of learning, pivoting and identifying new opportunities. But one thing has been clear – we have been blessed with incredible support: from the clients that believed in us and trusted us to work closely with them on their projects, to the network of health industry experts that joined our platform and have been passionate about not only helping the healthtech companies but also helping us directly, advising us, writing amazing blogs for our website and evangelizing our message.

Finally, I want to acknowledge a few partners who have supported us and provided wisdom and guidance from our very first day.  

One year on, I am humbled and grateful for all the support and from the bottom of my heart I thank you all. 

Ruby Gadelrab
CEO

Ascending the Covid-19 Incline—Reform, Reaction and The Long Way Back

Ascending the Covid-19 Incline—Reform, Reaction and The Long Way Back

Confronting the unimaginable: Covid-19, a surmountable challenge

Each day as I get up and go to work, I have to prepare myself mentally in a way that I have never experienced in my 12 years as a UK Doctor. My colleagues and I witness daily, the gravity and devastation that this despicable thief of life has caused—and it is heart-breaking.

Many of us have been personally affected, directly or indirectly by Covid-19 or have lost someone we love and it is nothing short of brutal. There is no doubt in my mind that we will one day all be living in a post-pandemic world that will no longer resemble much of our pre-pandemic one either economically or socially, but I do hold the firm belief that we will once again, reclaim our independent lives, albeit in some alternate form, at the end of this war.

Adapting to the New Normal

Many healthcare professionals share the same concerns and uncertainty as the rest of the public, but in the thick of it as we are now, our primary resolve is to fire-fight our way to global safety.  

Some healthcare professionals also share the cynicism that many members of the public express about the way our various governments have handled certain aspects of this Covid-19 war. It is undeniable that many positive strategic steps have been taken, such as the rapid deployment and reinstatement of retired healthcare workers, the Herculean effort of everyone involved in the development of the UK Nightingale ITU hospitals – massive temporary hospitals put together in a matter of days to help increase capacity where regular hospitals struggle to admit any more patients – and the active campaign to protect the NHS and global health systems aimed at ‘flattening the curve’ through staying at home, to save lives, have all been pivotal and impressive. However, crucial delays in implementing a hard lockdown, PPE shortages for frontline staff, inadequate levels of testing and the procurement of antibody kits which fail to meet trialled standards have all been hot topics of debate amongst health professionals and our society at large. In response to this, I believe we will see some very significant reforms to our post-pandemic healthcare systems, striking changes within our economy and alterations in our social behaviours that are likely to be long-standing.

Lockdown V Liberty 

My colleagues and patients regularly ask my views on our current state of lockdown. The essential  move to severely curb movement amongst the population has been a globally challenging phenomenon, taking its toll financially, physically and emotionally on every individual. It is, however, the only measure that has been shown to reduce the spread of this highly contagious virus as it clearly deprives Covid-19 of the opportunity to pass from person to person. Hard lockdown has been, and still is, a fundamental step in our fight at the coal face of this pandemic but I am not convinced it can continue in its current form until a vaccine or treatment is established. The impact on the physical and mental health of the population and the socio-economic consequences of a long-term hard lockdown would likely be extensive and far-reaching. The evidence requires detailed evaluation in an effort to find a safe and workable balance in the months ahead.

This does not mean lockdown should be lifted at this phase, while death rates continue on an incline, without careful consideration as to how this should happen. If we are too impatient and take action prematurely, this would put us firmly back to square one, if not worse, as saturation points start to be reached within our hospitals. There is an infectivity index (R0), which measures how infective the virus is among people- our aim is to see this become R0 <1, which is what containment and staying at home should achieve and has been successfully reached in many countries. Anything above R0 >1 will result in an exponential growth in case numbers and this would be catastrophic. 

So, what happens after lockdown is slowly lifted? My view is that Covid-19 will continue to exist among us but we will likely step down the ladder from a pandemic state —> epidemic —> virulence levels. We will still be at risk but the probability of contracting this virus will be much lower as the number of cases declines through isolation and social distancing and we would need to exercise sensible limitations to our movements until such a time that the vaccine and treatments emerge.

If the lockdown release is too abrupt, we risk a secondary surge in cases similar to that seen in China last week in its northern borders with Russia – this was thought to be due to an influx of  overseas Covid-19 positive people into China, after which the border was quickly closed and further quarantining was mandated.

I agree with those who express the view that this pandemic will have a permanent effect on general social behaviours.  Personally, I believe there is likely to (or at least should)  be a graded exposure back to mobilising the public to essential activities first, then close family mixing and finally, over time, a more full social interaction.

It is hard to imagine that our social landscapes will ever see the dense aggregation of people that we have previously enjoyed and indeed I suspect that concerts, cinemas and even restaurants that can’t maintain safe social distancing may well need to wait for their lockdowns to be lifted until such a time that vaccines and treatments are more established. This all remains uncertain for now and the coming weeks will be telling as government strategists look at ways to safely rehabilitate us back to our functional lives. 

Collateral Damage—the Forgotten Victims of Covid-19

There is a growing concern amongst healthcare professionals that there is a risk of declining health in non-Covid-19 patients who suffer from other chronic conditions which have been eclipsed by this  pandemic. The fear is that there will be significant consequences if these patients cannot access their healthcare providers or are fearful of attending hospitals over prolonged periods of time. Patients shielding (where extremely vulnerable individuals are advised to minimise all interactions with others and stay home while having access to priority food supplies and other vital services), limited access to health services resulting from Covid-19 surges, cancelled procedures and treatments, delayed presentation and non-surveillance of chronic health conditions will all contribute to the mass grave of the Covid-19 era. 

As primary healthcare providers, we are still able to see many patients (albeit mainly virtually) but access to all our patients needs to improve to prevent an increase in non-Covid-19 mortality over time. Primary care has been forced to digitise at an unprecedented speed with the rapid scale-up and introduction of telemedicine through the use of video consulting, electronic prescribing and other digital applications that enable a more flexible remote working capability. What we can see is an enabled primary care provider that can continue to offer access and services virtually so as to minimise the risk to both healthcare professionals and patients during the pandemic The NHS and private sectors have also harmonised in an unprecedented way with private hospitals and clinics committing their facilities, staff and equipment for the use of NHS patients  Together, they have shown some impressive resolve and flexibility, which will hopefully outlive this viral war and improve national healthcare well after it no longer faces such a colossal challenge. 

Reviving the Economy—the healthcare implications

Our economy will need some serious attention in the coming weeks, not least because at a critical point, and once infectivity is R0<1, the non-Covid 19-related morbidity and mortality caused by a long-term and deep financial depression in our country may potentially outweigh the risk of Covid-19 related tragedies at that junction.

This is a veiled outcome for us all to imagine from where we are all at now but there has been considerable modelling based on Wuhan data and other research to identify the most appropriate way back to some socio-economic ‘life’. One study in the Lancet by Prem, Lui et al. highlights a number of approaches that are being trialled to achieve a return to graded social mixing and with the aim of enabling some socio-economic recovery. They acknowledge their modelling needs further research and analysis but their projections suggest that premature and sudden lifting of interventions could lead to an earlier secondary peak, which could be flattened by relaxing the interventions more gradually

So, to avoid the risk of provoking a second wave of the virus spreading, and a subsequent early second peak, we may need to be prepared to accept a relatively slow approach to lifting the lockdown.

The Marathon, not the Sprint—Uniting for the Win

No one knows how Covid-19 behaves in the long term – we just do not have that insight but an immense amount of research is being undertaken globally and each day we are more informed, more empowered and ever closer to overcoming this pandemic. For now, however, it remains an elusive and unpredictable nemesis. 

I know patience is being tested and it feels like nothing will be the same again but we should try to accept that we are in this for the medium term at least and that we may well emerge with a few positive reflections and adjusted ways of living that, while may not be the same, will still enable us to have our capacitated lives back.

In the meantime, I should say that every single health professional, researcher, and key worker I have encountered has been beyond dedicated and committed to helping us all out of this with the least possible number of casualties and, whatever our political or personal views, for now we are fully united in our fight to shepherd our nations up the incline, to the summit and down the other side safely.

Thank you To All Our Healthcare Colleagues on The Front Line

Please know that I, and many of my colleagues are deeply affected by what we are seeing each day at work, horrified at how unrelenting and unkind this criminal virus is and humbled by seeing other colleagues fearlessly approach the most risky of situations without a second thought to their own safety in order to help someone else. I am optimistic and hopeful that if every person does their bit, people stay at home and give us the time we need,  we will be able to emerge from this and hopefully have some answers. 

I want to express deep gratitude to everyone who is fighting the good fight and sympathy for anyone who has been affected directly or indirectly, or who has lost someone they love to the horror of this disease. Every single person who is staying at home for us, is a warrior in this war.

Dr Rasha Gadelrab

Dr. Rasha Gadelrab

MDisrupt Guest Blogger: Dr. Rasha Gadelrab, MRCGP MBBS BSc (Hons), NHS GP & Chief Medical Relations Officer

Dr. Rasha Gadelrab is a portfolio NHS GP, Quality Improvement Manager and a clinical Covid-19 contingency lead in a North London Practice. She is also the Chief Medical Relations Officer of www.myhealthspecialist.com. Since completing her medical training, she has dedicated her career portfolio to clinical medicine, medical education, digital innovation and healthcare quality improvement activities in order to improve patient care.

If you are a health tech founder looking for guidance on building or growing a healthcare savvy product team, talk to us—we can help.

Put the Health Back in Healthtech: A Product Manager’s Perspective

Put the Health Back in Healthtech: A Product Manager’s Perspective

Build a healthcare-savvy team; build successful healthtech products

Good healthtech products are really hard to build. Every year healthtech attracts great technologists who have had personal experiences with the broken healthcare system. And yet, along with myriad silent disappearances, there are publicly reported flops in healthtech from scrappy start-ups and tech giants alike. What are some of the common pitfalls? And what can your company do to safeguard against them?

Map the players – patients, providers and payors – and understand their motivations

61% of digital health companies that start B2C end up pivoting to B2B and selling to insurance companies, employers, hospitals, or other healthcare providers. Some of this strategy change is natural growth – healthtech companies pilot by selling directly to consumers, and then gain traction and bigger partnerships. But many healthtech companies shift to B2B selling after gaining a hard-earned understanding of the healthcare ecosystem from some time in the field.

We’re all familiar with the patient-provider-payor dance in healthcare. Your company is (likely) trying to improve the health outcomes of the patient, whilst also delighting the provider, who bills your payor. Unlike in many commercial technology businesses, where customer usage and retention tells you a good story about the value of your product, the feedback loop in healthtech is more opaque given this complex tri-partite structure.

One way to minimize the swirl created by this fuzzy feedback is to map your patient, provider and payor stakeholder groups. If you like graphical tools, this might be useful. With each group, identify:

  • What success looks like. Simple phrases about each stakeholder, “Make it easy for the provider to pay for our screening test” can turn into company initiatives, which in turn can be used to guide product roadmaps.
  • How stakeholder incentives are aligned with this vision of success
  • How stakeholder incentives are not aligned
  • 3 most-likely failure modes

This exercise (hopefully) doesn’t pivot your direction, but instead helps clarify where you have dark or blind spots. Re-do the stakeholder exercise quarterly or twice a year to ensure alignment between your roadmap and the healthcare ecosystem.

Understand governance, risk management & compliance (or know when to ask for help)

Healthcare is a regulated industry. Depending on your company’s specialization, if you run a lab, you’ll be working with CLIA requirements; if you’re building medical devices, you’ll be working with the FDA, etc. These efforts require specialized dedicated resources. Additionally, almost all healthtech companies will be working with HIPAA protected data. Healthcare data is a hot topic today, including everything from massive data breaches to data-landgrabbing.

Product teams have to account for data compliance in your product strategy, design and implementation cycles. Basics & resources on HIPAA that product teams should know about include:

  • Various public cloud solutions now have HIPAA compliant offerings, including  Amazon Web Services, TrueVault, Aptible & ClearDATA
  • Remember HIPAA is more than technology – the regulations include incident response, risk assessment, operations management, policies & procedures and security & compliance. Training is required for anyone handling Protected Health Information (PHI). Compliance cloud platforms can help you manage this & the associated auditing: Reciprocity Labs, Aptible & ClearDATA
  • Your product managers (as well as your engineers) should be familiar with these HIPAA dev resources published by HHS

Establishing and maintaining trust in your healthtech product offering is core to your success. Give your teams the time and resources to manage the regulated aspects of the product in the right way, and save the headlines for your victories, not compliance violations

Pay extra attention to the seams

So you’ve built a beta release. Now for testing! Health problems are deeply human, and therefore the software solution workflow is embedded in a complex, multi-layered context: the real world. This is the zone in which healthtech products most often fail. Successful healthtech products are 1) integrated into the user’s workflow – and sometimes two or more stakeholders are users, and 2) interoperable with existing software or hardware solutions.

  • Test early. Get your software into the users hands for feedback as soon as you can. Reid Hoffman famously said “If you’re not embarrassed by your first release, you’ve waited too long to ship.” In healthtech it is important to contextualize these early releases carefully – e.g. make it explicit to friendly users or pseudo-users that this release is for feedback only; ask if you can demo live and shadow them in their workflow to see how they use the product etc.
  • When doing customer research and gathering feedback, explicitly ask about the various usage contexts for different users. Pay close attention to what other software or hardware your solution needs to interoperate with to minimize friction. Try to understand what happens if workflow integration and interoperability doesn’t happen – it’ll help you prioritize, and more quickly understand your larger scale usage data later on
  • Articulate priorities around integration and interoperability to get a clearly prioritized roadmap, plus decision documentation. A useful tool for this is MSCW prioritization.

Real world usage context is a challenge for any software development effort. It is even more critical in the world of healthcare which includes high stakes decisions, quirky and complex workflows in a time-scarce environment. Elegant integration & interoperability will beat fancy features anytime.

There are lies, damned lies & statistics. Be rigorous.

There are often two types of evidence generated and used by healthtech companies – marketing data and clinical evidence. Marketing data is used to quantitatively describe the benefits of the product. These results must be real and attained through rigorous analysis, however they have not been achieved in a clinical trial setting. Clinical evidence is generated by running an experiment (the gold standard is a randomized controlled trial, but there are various other methods) which is designed to test the protocol’s impact on the intended outcome given a controlled context. Your product teams must understand the differences between these types of information, and communicate results clearly throughout the organization to avoid confusion around data claims.

Most healthtech products that are aspiring to be paid for by insurance companies will likely need to run a clinical evidence effort at some point. Get your team ready for this by familiarizing them with scientific writing. It’ll also keep them current on the medical research in your product area. Some resources:

  • Stanford uses this paper to teach to students the basics of academic reading
  • How to read a Clinical Trial provides an overview of how to interpret evaluate a clinical trial, and provides context on the statistical rigor involved in generating clinical evidence
  • Bradford Hill Criteria provides a great framework for unpacking the logical consistency of a clinical trial

These are good tactics for building a rigorous culture of scientific literacy in your product teams. Deepest expertise in this area, will come from team members with degrees focused in epidemiology, e.g. Masters of Public Health (MPH), or MS in Epidemiology and Clinical Research etc.

We all know healthcare is broken and we believe in the power of healthtech improve our lives. Understanding the complex healthcare ecosystem, accounting for governance requirements, thoughtfully developing for real-life user workflows and establishing a culture of scientific rigor will help you change healthcare for the better, ultimately both faster & stronger.

Elizabeth Brook Garrity

Elizabeth Brook Garrity

MDisrupt Guest Author

Elizabeth is a product manager with experience developing machine learning software-as-a-service. She developed her healthcare chops as a program manager at at UCSF, and at Dartmouth’s Masters of Public Health program. She started her career as a management consultant, after graduating from Harvard.

If you are a health tech founder looking for guidance on building or growing a healthcare savvy product team, talk to us—we can help.

Understanding Medical Necessity: Guidance for Healthtech Companies to Address Medical Insurance Coverage Limitations

Understanding Medical Necessity: Guidance for Healthtech Companies to Address Medical Insurance Coverage Limitations

Many healthtech companies want to access the self-insured employer market.  In my previous blog, How Healthtech Companies Can Successfully Access the Self-Insured Employer Market I highlighted the important factors that healthtech companies need to consider when accessing this channel.  Many companies focus on this channel as a way to commercialize and drive adoption before their product is reimbursed by a health insurance plan.

The goal of this blog is to help you understand some of the key definitions that are important to understand in this channel and the process by which decisions are made.

Let’s get familiar with the important definitions: 

  • Self-Insured Employers: While the risk falls on the insurance company in a fully insured plan, in a self-insured plan the employer or company assumes most of the risk. Businesses that have self-insured plans must pay for employee medical claims and associated fees from their own general assets. Larger employers tend to be self-insured. The percentage of medium and smaller companies that self-insure is growing significantly.
  • Insurance Company: A company that offers health plans to customers. These can also be known as medical insurance companies or health insurance carriers.
  • Health Plan: A health insurance policy with defined benefits coverage. An employer can offer several health plans, from one or several health insurance companies.
  • Benefits Coverage: Defines both the dollar amounts of coverage (i.e., contributions, deductibles and copays) and the medical services covered.
  • Medical Necessity: A determination as to whether and when a medical service should be covered (paid for) by the insurance company.
  • Clinical Policy: A written document containing the clinical rationale for medical necessity determinations for a particular medical treatment or diagnostic.

Now that we understand the terms, let’s get back to the central conundrum that new healthtech companies face: 

“Why should I pay for this if it isn’t covered by the insurance company?”

In other words, If an employer’s medical insurance company doesn’t cover a diagnostic or therapeutic service, why should the employer consider buying it separately?

The answer is found in the corridor between “medical necessity” and what can be argued is genuinely “medically necessary.”  In order to prove that your product/service is medically necessary, you first need to understand the medical insurance company’s medical necessity policies for your technology.

Medical Necessity: Health Plan Clinical Policies

As defined above, medical necessity is the process for determining benefits coverage and/or provider payment for services, tests or procedures that are medically appropriate and cost-effective. 

Some policies may be developed internally, some externally. Most medical insurance companies maintain a clinical policy unit of internal and external clinical advisors that apply their own process of medical diligence which includes: 

  • Regularly monitoring new treatment, technologies and indications

  • Reviewing new treatments submitted for coverage

  • Searching the National Library of Medicine’s PubMed database of peer-reviewed medical literature

  • Assessing regulatory statutes of new technologies (e.g., FDA)

  • Reviewing evidence-based clinical practice guidelines, such as the Agency for Healthcare Research and Quality’s (AHRQ) National Guideline Clearinghouse database

  • Reviewing recommendations of national medical societies and their guidelines.

  • Considering the indications accepted by the USP DI (United States Pharmacopeia-Drug Information) and ASHP (American Society of Health-System Pharmacists) for drug treatments

  • Assessing the opinions of relevant experts where necessary.

As described in my previous blog, most employers have insurance companies, or some other plan administrator, process medical claims. These insurance companies and administrators abide by a set of clinical policies around medical necessity established by the clinical policy unit(s). These policies apply these criteria for assessing a service, test or procedure:

  • Is it in accordance with generally accepted standards of medical practice?

  • Is it clinically appropriate and effective?

  • Is it not primarily for convenience?

  • Is it not more costly than an equivalent alternative service?

  • Is it endorsed or recommended by national medical societies and associations?

  • The technology must have final approval from the appropriate governmental regulatory bodies, when required. FDA approval, where applicable, is necessary but not sufficient to meet coverage criteria.

  • Medical insurance companies are not obligated to follow Medicare policy for their commercial members. Medicare coverage policy is often considered, however, in formulating clinical policies for commercial plans.

Medical necessity determinations arise most commonly where the service requested is subject to pre-authorization procedures. Here are some of the most common categories for pre-authorization:

Frequently Required Pre-Authorizations

Understanding Medical Necessity: Guidance for Healthtech Companies to Address Medical Insurance Coverage Limitations 2

The challenge, then, is how a healthtech company justifies the cost of the new service in light of the medical insurance company’s clinical policy. In order to do that, a healthtech company needs to understand what the clinical policy language is for medical insurance companies,recognizing that they can often vary.  In some cases, levels or degrees of coverage (including frequency, duration, pre-authorization requirements) may vary based on group plan design. Examples include: number of allowed physical therapy visits, coverage for alternative treatments such as acupuncture, and length of stay for substance abuse rehab.

Each policy includes: 

  • Coverage rationale that includes the scope of the decisions rendered, as well as their context

  • Documentation requirements for treating providers

  • Definitions of terms used in the policy

  • Applicable codes including CPT (medical procedures) and ICD10 (medical diagnosis) codes 

  • Description of services, e.g. a more complete review of when and how the services addressed shall be treated

  • Clinical evidence including a discussion of major studies, guidelines and other research used to craft the decision. These are defined here in the blog The Formula for Widespread Adoption of health Products that Every Investor and Healthtech Entrepreneur Needs to Know.

  • US Food and Drug Administration status, including relevant approvals from the FDA

  • Centers For Medicare And Medicaid Services status, including relevant information about what Medicare and Medicaid typically cover in the area addressed

  • References e.g. a useful bibliography for healthtech companies

  • Policy history/revision information e.g. a review of previous iterations of the current policy

  • Instructions for use e.g. a description of how the medical insurance company administers the policy.

Depending on the type of service, some healthtech companies may directly pursue the insurance companies. In most cases, however, marketing healthtech services directly to the self-insured employer should include a rationale as to why the covering insurance company does not cover the product or service.

Clinical policies can also be leveraged to identify what sources are used to establish the relevant clinical policy. The sources include: individual academic studies, national medical society guidelines, federal agency criteria (such as the FDA), federal institute guidelines (such as the CDC and the NIH), specialty and subspecialty medical colleges and organizations, and a fair number of others. These materials may be useful to make the case for your product or service.

Examples of Medical Insurance Company Clinical Policies:

For purposes of illustration, the following is a small subset of some of the clinical policies published by United Healthcare in a single year period.

Understanding Medical Necessity: Guidance for Healthtech Companies to Address Medical Insurance Coverage Limitations 3

Key Points For HealthTech Founders

  • Healthtech companies need to understand how health insurance companies define medical necessity in order to make the case for the solution they are bringing to the self-insured employer.

  • Medical necessity defines what is covered by a health insurance plan in a general population. That definition is intended to protect the self-insured employer and its covered members from paying for medical services that are excessive, cost-inefficient, or not clinically warranted. 

  • The opportunities for healthtech companies looking to directly reach self-insured employers lie in making the case for the business value of the solutions offered. 

Medical Necessity: Finding the Leading Edge, Avoiding the Bleeding Edge

In my next blog post, we will examine how healthtech companies can make the case for medically necessity even when an employer’s health plan does not cover the service. 

This includes addressing the following questions: 

  • What are the major reasons that a new approach should be covered even when the medical insurance company doesn’t cover it?
  • What advantages does your approach have (i.e., selection of appropriate members, place of service, etc.) that are not currently in place that can help maximize the return of investment for the service?
  • Why should an employer proactively include this service and pay for it above and beyond what is covered by the medical insurance company?
  • Will the service bypass, reduce, pre-empt or help avoid other costs incurred by the employer’s health plan?
Understanding Medical Necessity: Guidance for Healthtech Companies to Address Medical Insurance Coverage Limitations 4

Ronald S. Leopold, MD, MBA, MPH, Physician Consultant

MDisrupt Guest Blogger Specializing in Employee Benefits, Medical Cost Solutions, New Medical Technology

As a credentialed and experienced professional, Dr. Leopold brings credibility and a breadth of knowledge as a consultant, client advocate, and marketplace spokesperson. He is an industry thought leader in employee benefits and health and productivity.

Specialties: Medical Costs, High Cost Claimants, New Medical Technologies, Employee Benefits, Heath and Productivity, Population Health Data Analytics, Global Workforce, Generations in the Workforce, Financial Wellness, Thought Leadership, Public Speaking.

Accessing the self-insured employer channel correctly takes special expertise. If this channel is key to your commercial strategy, talk to us—we can help.