8 Common Mistakes Healthtech Companies Make When Building Health Products

8 Common Mistakes Healthtech Companies Make When Building Health Products

Written by Ruby Gadelrab, CEO and Co-founder of MDisrupt

Most of us in the health industry want to get meaningful health products to market, and to the people who need them, as fast as possible.  Yet in the growing healthtech sector, despite over $50B invested since 2011, there have been relatively few successful exits.  

Over the past five years, since before we founded MDisrupt, we have worked with, advised, reviewed or consulted for over 100 healthtech companies.  We were surprised to find that the mistakes these companies are making are shockingly consistent. Even more striking is that many of these mistakes are completely avoidable.  Here are a selection of the most common things we have seen. 

1. Not Having the Right Product-market Fit 

Many of the health products we reviewed often just don’t solve a real problem in healthcare.  At best, some are nice to have, but for the most part many of the companies we talked to hadn’t actually understood the workflows and nuances of what their intended customers were trying to accomplish. Often it’s a case of trying to commercialize a technology by “backing into” a perceived problem. 

In many cases entrepreneurs start with a technology and then seek a market. In one case, an entrepreneur had built software for physicians of a particular type of medical specialty, but had never actually spoken to one of those physicians. She hadn’t engaged them at any point before building the product to check that it solved a real problem, or during the build to understand what features were important.  

Understanding your target audience—and especially where the user fits within the complex healthcare setting—is critically important when building health products. There are many nuances, stakeholders, workflows and dependencies that differ for each case and are critical to understand.  Involving healthcare experts from your target audience early and throughout product development is mission critical to building a clinically viable health product.

In short, no product-market fit = little or no scale. 

2. Building Products With Economics That Don’t Work

Having product-market fit is one key to building a clinically viable health product.  Equally important is commercial viability, in particular, ensuring that your product creates value for its user. Does it come at a price point where the ROI of adopting it is clear? How much does it save compared to other technologies or to the status quo? How much does it cost to implement? Do the combined costs of the product and the implementation provide a compelling financial argument? 

To answer these questions (which stakeholders WILL ask) it’s essential to do a Health Economic Study or Health Economics Outcomes Research (HEOR).  This needs to be conducted by an experienced health economist and definitely not by the internal commercial teams. 

One type of Health Economic study is  a Cost Effectiveness Analysis (CEA). The CDC has a great definition and example here. 

“Cost-effectiveness analysis is a way to examine both the costs and health outcomes of one or more interventions. It compares an intervention to another intervention (or the status quo) by estimating how much it costs to gain a unit of a health outcome, like a life year gained or a death prevented.”

There are several different types of health economic models. Different stakeholders prefer one over the other and they are not easily converted. For example, self-insured employers may prefer a Budget Impact Analysis.   For either channel, you will absolutely be required to show these analyses as part of a BD negotiation before they would even consider a pilot.  

Beyond the healthcare setting, another mistake entrepreneurs often make is overestimating what consumers are willing to pay for a health product.   While it’s good practice to conduct price elasticity studies to gauge the value consumers perceive in your product and where the right price point may be, it’s important not to over-index on these results.  Consumers behave very differently in research settings than in a real world setting when they have to pay for health products. 

Even if you have the BEST technology that solves a REAL problem, if the economics don’t work, then there is no viable business. 

3. Under-representing Medical Expertise in Their Teams 

Many healthtech companies we spoke to, had no healthcare experts on their leadership teams at all. Very few had hired medical professionals as employees, consultants or advisors, and those that had them rarely involved or listened to them. This feels counterintuitive if you are building a health product.  As a marketer, I (Ruby) have been hired by multiple companies to consult because the founders know and freely admit that they don’t know marketing and so they hire an expert. However, rarely have we seen them say the same thing about hiring medical people.  

In one case, I met a founder who was building a clinical genetic test and seeking advice on his first hires and advisors. When I suggested that the first hire should be a medical geneticist, or a chief medical officer,  he was horrified and asked “Why would I hire that skill set now – what would they do? What value would they bring?” These questions are answered by Dr. Daniela Crandall in her blog The Critical Role of Medical Affairs in a Healthtech Start-Up

4. Undervaluing Medical Experts in their Teams

After we founded MDisrupt, we were overwhelmed with support from the healthcare industry. Hundreds of people reached out to say how glad they were that we founded the company and how much Medical Diligence is needed. As we started talking to them, they all told us similar versions of the same stories of their experiences in healthtech companies: 

  • Many were hired by healthtech companies for “optics” purposes only

  • Very few had a significant role or say in product development

  • When they suggested that certain mission-critical studies should be done they were often ignored or put on performance improvement plans for overstepping

  • Numerous medical professionals told us they were asked to join sales calls and state their name and credentials only and not speak beyond that 

  • When marketing material was created, it was rarely passed to the medical teams to review for accuracy of clinical claims.  On the rare occasions that it was, commercial interests often trumped medical truth. 

Most of the healthcare experts we met were talented, passionate and eager to be part of the creative disruption of health care. Although they had had bad experiences, they still had faith that if healthcare professionals could be given a real seat at the table and a significant voice in building health products, they could help accelerate the path to market in a responsible way.   

There is no doubt that health care needs to be disrupted and to become a better experience for all of us. Healthcare experts and healthtech founders are equally frustrated and united in the mission to make this happen quickly, but it needs to be done responsibly.  Healthtech entrepreneurs can save themselves years of time and millions of dollars if they engage health experts early and often in a meaningful way.  

5. Failing to Understanding the Difference between Scientific and Medical Expertise

Many of the founders we talked to mistook “scientific” advisors for medical ones. Often when we asked where they were seeking medical guidance, we heard “Prof. X from high profile institution Y is one of our founders/advisors/board members.”  We would say, “That’s great, but does Professor X have any medical training? Has he or she ever commercialized a health product?” Usually the answer was no. 

It appears that many healthtech entrepreneurs don’t know the difference between scientific and medical expertise. It’s important to have the right type of expertise for the task. Jill broke this down in her blog where she defined the differences between scientific and medical expertise.  

Even scientific discoveries which are peer reviewed in high profile journals  and widely cited need to be successfully translated into products that can be used on patients. Great science doesn’t always translate into great health products‚ the discovery may fail on some other aspect of its clinical or commercial viability (see the point about product economics above, for example). There is a difference between scientific validation and clinical validation.   Most scientific publications are not designed to demonstrate the clinical validity of a medical test or health-related claim. (We will address this in a future blog.)

Sometimes healthtech founders are not even aware that there is a scientific or medical discipline well-matched to the task they are trying to accomplish. An example of this is where a health product is designed to incentivize behavior change. I have met numerous founders who gave the role of creating these products to their Head of Product, typically a person with a commercial background. It comes as big news to them that behavioral science is an actual scientific discipline and there are specific scientifically proven methodologies for incentivizing behavior change.  In her blog, Dr. Gina Merchant, who has a PhD in behavioral science, describes why engaging a behavioral scientist is so important when building health products. 

6. Not Conducting the Appropriate Studies or Generating the Right Type of Evidence 

When building a health product, the bar for evidence that it ACTUALLY WORKS and is SAFE to use on real humans is much higher than when building consumer products.  

The studies aren’t a “nice to have”—they are mission critical for  building clinically and commercially viable health products. The studies that need to be conducted are an essential part of the formula for successfully building a health product.  This formula isn’t magic or a secret sauce: It is well known by healthcare professionals and is a standard series of studies and activities that every company building a health product has to do.    

We outlined these essential steps here in our blog The Formula For Widespread Adoption of Health Products that Every Healthtech Investor and Entrepreneur Needs to Know. As we talked to healthtech companies over the past few months, we realized that this formula seemed to be unknown to them. Many hadn’t planned on doing these studies simply because they didn’t know they had to. 

8 Common Mistakes Healthtech Companies Make When Building Health Products 1

7. Being Vague about a Product’s Intended Use 

The first step in health product development is to define the intended use statement (also called the intent of use). This statement informs the regulatory risk category and determines the types of studies that will be needed. Failure to optimize the test for its intended use will result in an unacceptable number of false results. But done properly, the intended use statement will serve as the “North Star” for product development, medical and scientific affairs, marketing, and financial forecasting. 

Many variables can influence the performance of a test, such as population characteristics, the prevalence of the target condition of interest, the setting, and the type of test, among others. Thus, it is important to design the performance evaluation studies to match the intent of use.

The intended use of a test describes:  

  • The clinical purpose of the test: e.g. screening, diagnosis, prognosis, risk prediction, therapy or treatment selection for patients

  • The type of technology used: e.g. next generation sequencing, spectrophotometry, or electrophoresis

  • The target condition e.g. disease, disease stage, or any other condition of interest

  • The analyte being measured  e.g. DNA, HbA1c, LDL, Vitamin D

  • The type of specimens acceptable for testing e.g. whole blood, plasma, serum, tissue 

  • The location where the test is conducted e.g. clinical laboratory, point of care, home use

  • The type of results: e.g. quantitative, continuous, ordinal, or qualitative

  • The population for which the test is intended e.g. adults over age 50, adults with a diagnosis of major depressive disorder who have had an inadequate response to at least one psychotropic drug, high risk pregnant women

  • Skill level needed for interpretation of the test the need for a trained or skilled user of the test or test interpreter

In our experience, founders often don’t understand the concept of intended use. When we ask them who  the product is created for, they often answers “Everybody,” or a very wide subset of the population. Usually the reason founders are keen to maintain a broad intended use is for commercial purposes; they don’t want to limit their TAM and SAM projections, particularly when fundraising. However, the fastest path to market is usually the simplest, narrowest intended use. The intended use can be expanded over time as additional studies are completed to substantiate the claims.

8. Misunderstanding What is Required to Access a Particular Channel 

I (Ruby) have consulted for about 35 companies over the past two years.  Almost all of them ask me one or more of the following questions: 

  • How do I get a deal with a self-insured employer (SIE)? 

  • How do I get physicians to buy and use my product?

  • How do I get a deal with a health system?

  • How do I acquire consumers?

I will save consumer acquisition and health systems for future blogs, since they are entirely unique channels. Here’s what’s important to know about self-insured employers and physicians. 

Self-insured employers 

Often entrepreneurs choose to access this channel as they believe it’s a way to accelerate commercialization and revenue before the necessary studies are done to get into medical society guidelines and reimbursement.  This assumption is often not the case, SIEs also have a minimum bar of clinical evidence required. SIEs may consider small pilots that are usually funded by the healthtech company without seeing the studies. But ultimately, the final decision for adopting a health product widely in this channel will be made by a CMO (Chief Medical Officer). She will often ask for the same level of clinical evidence as required in a healthcare setting.  

In addition, the ROI analysis is also critical for this channel (see product economics section above). Again, if the economics don’t work, there is no opportunity for scale. Our physician consultant and expert Dr. Ron Leopold covers this in his blog How Healthtech Companies Can Successfully Access the Self-insured Employer Market.

Physician adoption 

When it comes to achieving widespread adoption in a healthcare setting by physicians, there are two additional critical steps (assuming all the other steps have been done correctly). These are 

  • Incorporation into medical society guidelines 

  • Reimbursement

Healthcare professionals and scientists are the most skeptical audiences. Glossy marketing material alone isn’t going to convince them of much; in fact it will barely get their attention.  

The biggest influencers of these professionals are their peers. For them, convincing content needs to be in the form of credible data and evidence. And the most effective communication medium is medical society meetings. 

For healthtech companies, a critically important part of entering this channel involves developing a KOL (Key Opinion Leader) program. KOLs will help to generate the data and evidence necessary to get into medical society guidelines, convince payers to reimburse for their products and will also create “medical influencers” who can educate their peers. How a KOL program works and its purpose will be addressed in a future blog. 

We have often heard from healthtech companies, “We don’t have time to do all these steps; these studies take years; we need to get there faster – what can we skip?” The reality is that when it comes to health products, there are no shortcuts. 

So how does a healthtech company in a rush to commercialize get there?  Well, the easiest way is to engage healthcare experts early, listen to them and follow the formula to avoid making costly missteps. The hard way is to try to skip a few steps and waste years of time and millions of dollars trying to recover.

How Can We Help?

The path to getting your health product widely adopted may be longer than for a consumer product, but it doesn’t have to be hard.  At MDisrupt, our goal is to help healthtech companies create clinically and commercially viable health products. We have built up a network of experts from across the healthcare continuum and they are all passionate and eager to help healthtech founders get the most impactful products to patients faster. If you need a healthcare expert, talk to us

The Critical Role of Medical Affairs in Healthtech Companies

The Critical Role of Medical Affairs in Healthtech Companies

“Great discoveries and improvements invariably involve the cooperation of many minds.”
Alexander Graham Bell

Medicine is shifting toward a more personalized, value-based experience. As this transformation continues, healthtech companies need to be able to communicate the value and clinical differentiation of their solutions more effectively. This will require incorporating healthcare experts, who are usually hired into medical affairs roles.

This, in turn, will require tight collaboration between the medical affairs group and other groups within the company, including commercial, R&D, market access, and product teams. Katie Anders, the head of medical affairs strategic solutions at Medscape, said, “Today, medical affairs must liaise with their R&D colleagues and fully grasp the science that supports their work. They need access to real-world data. They need the strategic thinking abilities and insights of their marketing counterparts, and the customer-facing skills of those in sales. And they must understand and operate under all of the rules and regulations governing industry interactions.” The healthtech companies that adopt this strategic model will ultimately create more clinically and commercially viable healthtech products and increase their chance of widespread adoption.

The importance of generating real-world data 

According to Bain & Company (see figure below), 88% of US physicians consider real-world evidence a top criterion in their prescribing practices. Within a healthtech company, medical affairs can play a key role in helping to generate the real-world evidence required for health products to be widely adopted in the marketplace.

The Critical Role of Medical Affairs in Healthtech Companies 2

Furthermore, medical affairs experts are poised to help educate not only physicians, but also payers, to identify relevant data and real-world applications for higher quality patient care.

An overview of the medIcal affairs role 

In health companies, medical affairs departments evolved to serve as an independent counterbalance to sales and marketing departments. In FDA-regulated companies, specific laws dictate the claims that sales/marketing can discuss versus the information and indications that medical affairs is allowed to discuss.

Medical affairs very specifically never carries a quota and their KPIs are not based on sales performance or projections. The healthcare industrial complex is conditioned to expect different things from a medical affairs professional than from a sales/marketing professional—it is almost impossible for a single individual or department to serve both roles effectively, since the natural tension is part of a successful balance.

The essential elements of the medical affairs role are to:

  • Be the voice of and advocate for the patient. For example, would you want your doctor to be acutely aware of the likelihood of a false positive result? If so, then medical affairs needs to be the voice for the company’s collateral to meet this need.

  • Represent the needs and concerns of healthcare professionals

  • Be trusted by our healthcare professional clients.

The cross-functional role of medical affairs

If medical affairs departments are deployed and embraced strategically within a healthtech company, they can play a critical role in various aspects of the organization, including:

  • Business development Accelerate business development efforts when assessing new technologies for acquisition

  • KOL programs Engage and develop KOL-led sites to generate appropriate, necessary data proof points required for successful go-to-market strategies. This data generation allows the healthtech company not only to showcase its capabilities to other physicians, but also to payers for reimbursement strategies

  • Medical content Provide support for marketing in reviewing content and advising on messaging that resonates with target medical audiences

  • Product development Be a core part of the product development process to help make products with the correct product-market fit that truly solve  problems in health care

  • Market access Foster an understanding of the reimbursement landscape and provide the scientific messaging and dossiers so that payers understand the added value and ROI of their technology.

  • Stakeholder education Educate physicians and other potential stakeholders in health care. Help educate the leadership and commercial teams on how to accurately and effectively communicate about the technology with their customers.

  • Spreading the word, scientifically Medical affairs team members can also be medical spokespeople at conferences and with the media, by writing articles for scientific and medical journals as well as speaking at medical society meetings.

The value that medical affairs can bring to a healthtech company

McKinsey & Company interviewed numerous medical affairs executives to create a 2020 vision for medical affairs. Collectively, they identified  four aspirations that would create the most value for their organizations as well as the industry as a whole:

  1. Enhance patient access to, and best use of, optimal medical treatment
  2. Embrace patient-centric healthcare
  3. Facilitate coordination and integration of different medical data and types of knowledge
  4. Acquire and develop talent

Along with broadening the spectrum of external stakeholders with which medical affairs interacts, healthtech companies that strive for increased internal interactions will further excel.  These examples show how medical affairs can provide significant value to healthtech companies:

  • To further enhance patient access: medical affairs can collaborate with market access efforts to demonstrate economic and medical value.

  • To embrace patient-centric healthcare: medical affairs can collaborate with marketing colleagues to create collateral that integrates patient advocacy groups.

The preferred way to engage with healthcare professionals is changing; the primary focus is now on improving health outcomes for a greater portion of the patient population. If medical affairs collaborates with internal forces to provide business intelligence, business development, marketing, market access, and sales with a more patient-centric perspective, medical affairs’  value within the organization will increase. Providing real-world data, and increasing access to it, creates an opportunity for medical affairs leaders to leverage data while continuing to establish and maintain trust with external stakeholders and the medical community.

Medical affairs professionals who want to lead the change must be involved in various projects across the organization and communicate not only to the medical community but also to colleagues within the organization. This collaboration will only become more critical as therapeutics increase in complexity and as big data is utilized to assess outcomes in a value-based system. 

Daniela Crandall MHS, PA-C

Daniela Crandall MHS, PA-C

MDisrupt Guest Blogger

As a clinician, I’ve cared for patients in outpatient, operating room, and inpatient settings. As a sales director in healthtech, I created strategic direction and handled tactical business plan administration and talent management. As a director of medical education, I was in charge of training strategies for both sales professionals and surgeons. Medical affairs experience included engaging KOLs, making C-suite level presentations, and engagement with healthcare systems, payers, and medical device executives.

Incorporating medical affairs into your company

If you are in the healthtech industry and want to assess the value of increasing medical affairs involvement with your organization, consider engaging with our consultants. We all want to provide the highest-quality care for patients; having  medical affairs experts work closely with your company can accelerate the widespread adoption of your health product. Talk to us—we can help.

How Healthtech Companies Can Successfully Access the Self-Insured Employer Market

How Healthtech Companies Can Successfully Access the Self-Insured Employer Market

So, you have a new health technology that you’ve packaged into a hot product offering. You’re excited about your product. As you think about going to market, you practice reciting all the great things about your offering. This product’s going to take the world by storm! Your largest potential market: self-insured employers.

You’re not alone. The self-insured employer (SIE) marketplace is enormous. And with each year, more medium-sized and smaller employers are joining the fray. According to the most recent EBRI (Employee Benefit Research Institute) findings research, 78.5% of employers with 500 or more employees offered a self-insured health plan. That’s translates into more than 56,000 plans covering more than 75 million participants, according to a recent Deloitte study prepared for the Department of Labor.

However, self-insured employers are barraged by “next best thing” solutions touting a new technology that will revolutionize the marketplace in a new or unique way. Some recent examples include:

  • A new diagnostic blood test to help fine tune the treatment for certain kinds of cancer

  • A new application of telecommunications technology to optimize patient/provider interaction

  • Targeted pharmacogenomic testing for psychiatric therapeutics

  • A new stem cell treatment for joint injuries

  • A condition-specific self-management app

  • A new imaging technology that can be offered onsite.

Key Strategies That Drive SIE’s Business Goals

So how can you break through the noise and get attention in this crowded market? First, you need to understand what  self-insured employers are trying to accomplish. The four key strategies that usually drive SIE business goals for benefits are:

  1. Medical cost reduction through plan design
  2. Medical cost reduction through marketplace innovation
  3. Improved member engagement in health and wellness
  4. Improved workplace engagement and performance 

Self-funded health insurance plans enable employers to better customize plan and coverage options, as well as to better target cost-saving strategies. Naturally, employers struggling with escalating medical costs are looking for the next big thing. SIEs, in particular are sensitive to medical costs since they are spending “their own” money. 

To do this, employers typically choose one of two options: an Administrative Service Only (ASO) plan from an insurance carrier, or a Third Party Administrator (TPA) plan. ASOs tend to be more turnkey, offering ease of administration and more limited plan options. TPAs tend to be more flexible and enable employers greater choice in plan design and offerings. The distinction is important, as the appetite and feasibility for new solutions increases with greater employer flexibility.

How to Convince SIE’s to Adopt Innovation 

Many SIEs are willing to consider leading edge solutions if they can be convinced that the return on investment is worth the risk and the hassle. 

Understanding not just what your new product offers but how it aligns with what a particular SIE wants to accomplish makes all the difference in the world. Understanding employer cost drivers and identifying specific ways that those costs might be avoided or reduced is key to making a smart, targeted pitch to your potential customers.

Many healthtech companies promise medical cost reduction through marketplace innovation. But they often underestimate the level of detailed understanding of medical spending that SIEs and their advisors have. Increasingly, employers can influence cost trends and clinical drivers to an impressive degree.  Some of the key factors many SIEs consider include

  • Cost per member

  • Utilization trends 

  • Acute and chronic conditions 

  • Gaps in care 

  • Risk scores pharmacy/medical ratios for their plans.

These metrics can be further analyzed by company location, member type (employee, spouse and dependent), and by plan.

It is vital to understand precisely what metrics your new health product will impact, and how it will change them in new ways.

What the Self-Insured Employer Needs to Know From You

Do commercial medical carriers pay for your service? If not, why not?

Most SIEs have an insurance carrier, or some other plan administrator, process their medical claims. These carriers and administrators abide by a set of clinical policies that relate to medical necessity. Some policies may be developed internally, some externally. Some common examples include: 

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

  • Is it clinically appropriate and effective?

  • Is it not primarily for convenience?

  • Is it less expensive than an equivalent alternative service?

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

  • Does your technology have final approval from the appropriate governmental regulatory bodies, when required? (FDA approval, where applicable, is necessary but not sufficient to meet coverage criteria.)

  • Is your service covered by Medicare? While carriers are not obligated to follow Medicare policy for their commercial members, it is often considered in formulating clinical policies for commercial plans.

How will your health product disrupt the status quo? 

When considering a new diagnostic, therapeutic or behavioral change solution as part of an employee benefits plan, there are some basic questions you should be prepared to answer for a SIE:

  • What does the new capability offer?

  • What is the upside of offering the new technology?

  • What are some of the potential downsides?

  • Do the benefits outweigh the costs?

  • Is it medical necessary? Is it advisable?

  • What population is it intended for?

  • How will it be implemented and what are the costs associated with implementation? (I.e. does it require a blood draw or physician order, and if so are those baked into the solution and costs?)

  • What are the ethical and legal ramifications of including this in the benefits program? 

  • What’s the ROI or the VOI (Value on Investment)? Can you prove it?

  • Are any other employers doing this? Why or why not?

The Practicalities: What a Smart Self-Insured Employer Looks For

In addition to understanding the details of what you offer and believing that it will accomplish what you say it will, employers need some assurances about your own credibility. Here are a few additional questions they might have for you? 

  • Can you do what you say you will do, and do it well?

  • Do you have a proven track record?

  • What will the service experience for the employees? For their families?

  • What will we see from you?

  • What kind of reporting do you offer back to us?

Anticipating this piece of the conversation is vital for new healthtech disruptors: The more you can answer these questions truthfully and with confidence, the better your position to get to the next step.

Wherever possible, providing a predicted ROI is advisable (a range is acceptable). Assume that your SIE has a sophisticated understanding of ROI and be as specific as possible. Dollars spent on your product and program should be demonstrable by key indicators. Thinking through the “what ifs” shows you understand their world. An even stronger case can be made if you’re willing to put dollars at risk. 

How Healthtech Companies Can Successfully Access the Self-Insured Employer Market 3

Before you knock on the door, have proof of concept. Pilots or case studies are critical to your credibility. Upstart enterprises will inevitably face a “chicken and egg” conundrum for this.  You need to solve for that. Funding your own study in some way may be something to think about.

Key Considerations

  • Every employer is different. Be prepared to pivot your pitch to meet what the SIE is really after.
  • An employer’s appetite for change and innovation will vary widely based on the views of decision makers, and the realities of benefits delivery for that company. Most times, “new and shiny” just isn’t enough.
  • Claims of medical cost reduction need to be credible and data driven. Understand the actual drivers of medical costs for SIEs and, if possible, touch on key cost “hot spots.”
  • Make sure you have carefully thought through the member (user) experience, as well as the employer experience.
  • Be prepared to explain why carriers don’t cover your diagnostic or therapeutic services as part of their core plan offering.

How Healthtech Companies Can Successfully Access the Self-Insured Employer Market 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.

If you are interested in exploring the Self Insured Employer channel for your healthtech product, MDisrupt has a network of experts that can help. Talk to us—we can help.

We wouldn’t make drugs without chemists. So why make digital health products without behavioral scientists?

We wouldn’t make drugs without chemists. So why make digital health products without behavioral scientists?

Humans are complicated, and changing our behavior is hard. 1, 2 Despite all the hype about artificial intelligence and personalization, most consumer-facing behavior change tools are incredibly unsophisticated, relying on basic self-tracking and superficially-tailored feedback to change behavior. Techniques known to be highly effective, such as such as disrupting habit streaks, and linking contextual cues to behavior, 3, 4 are noticeably absent in most digital health products. Maybe this is why most of these products don’t actually work.

Using science to sell apps—but not to build them

Most consumer-facing apps are not scientifically informed. 5, 6, 7 And even when they are based on evidence, implementation of the science into the product is often poor. 8, 9 This lack of science, however, does not prevent companies from using science to sell apps. On the contrary: A recent review found that over 40% of the most popular mental health apps invoked scientific language to support their effectiveness claims yet just one of these apps linked to published literature. 10

Many of the solutions being pitched or sold to us are behavior change solutions – buy this, wear that, ingest these insights about yourself, and you will be freed from pain, sleep better and lose weight! But peel back the marketing claims, and investors and consumers alike may bristle to find out that—to mention just a couple of examples— sleep-tracking apps can make insomnia worse, 11 and the published benefits of a daily blood pressure monitoring app (whose makers just raised $12 million 12) were based on just 2% of those sampled. 13

An alarming number of companies are publicizing results using inappropriate statistical techniques. For example, conducting what is known as a completers- only analysis involves selectively analyzing only those data from people who completed the trial/experiment, and ignoring the data from people who quit. This approach makes it way more likely you will conclude your product is amazing, because the people who make it to the finish line are inherently more motivated. We want to see your intent-to-treat results, which include the people who dropped out. It is also worth pointing out that the same statistical rules apply to both big and small data. Yet amid the promise of big data, many people have grown increasingly comfortable eschewing the fundamentals. 14, 15, 16 We need to remember that methods matter too: Applying the right statistical analysis can’t overcome bad execution or study design.

The mainstream media, investors, consumers, and industry players have been sold on the idea that behavior change is one appropriately timed nudge away and that we can educate our way toward healthier living. The expectation that exists in the space is wrong: You cannot simply click ‘like’ to change your behavior. 17

So how do you change behavior?

Behavioral science can help us design for behavior change, and build technologies that not only spark change but sustain it. 18

Behavioral science is the empirical study of human behavior across the lifespan. It encompasses fields such as psychology, cognitive science, public health and economics. Behavioral science emphasizes how context, and the social and physical environments, play profound roles in behavior, beliefs, and decision- making. People are different, context matters, and things change. 19 This table lists some behavioral interventions shown to effectively address common health problems.

 Links for references below correspond with number bubbles above.

Links for references below correspond with number bubbles above.

20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

Behavior change science can tell us what works and what doesn’t. 35 If digital health technology companies ignore behavior change science, they will fail to produce meaningful, long-lasting results. 36

Behavioral science + 21 st century technology

Behavioral science has undergone radical transformation in step with the technological revolution. No longer must we rely on humans to self-report what they are doing—now wearables and sensors can passively detect behavior throughout the day. And in instances where we must ask people questions, new technology-enabled methods can illuminate the behavioral context, such as what the person is doing while sedentary, having cravings, and feeling blue. 37

The data accrued from these newer methods are reinforcing long-held (but previously untestable) hypotheses about the non-linear nature of change. 38, 39 They also enable us to intervene at the right time. 40, 41 In other words, we can get closer to automating human support than ever before. These new data also provide strong evidence that conclusions drawn from group-level data are extremely imprecise for individuals. 42 Fortunately, we can now optimize interventions at the individual level and realize the power of behavioral phenotyping. 43

For example, let’s consider how people react differently to self-tracking. We know that some people reject it because of waning motivation – they get negative feedback and stop tracking themselves. Measuring individuals’ determination, resilience, and/or coping style can provide insight into who will benefit from consistent tracking and feedback. For those who respond poorly to consistent tracking, reframing failure as within one’s control can overcome the tendency to avoid. 44

Wellness apps: A behavior change opportunity

Historically, our focus has been on helping people once they get sick, focusing our investment dollars, product pipelines, and healthcare reimbursement strategies toward treating disease. On its face, this makes sense: There is a lot of sickness to treat. Six in 10 US adults have at least one chronic disease, and four in 10 have two or more. 45 By 2030, the number of adults with three or more is estimated to almost triple from 31 to 83 million. 46 Including lost productivity, the economic burden of chronic disease is estimated to be a staggering 20% of our gross domestic product or $3.7 trillion. 47

But, what if we helped people before they got sick? What if we could recoup some of that $3.7 trillion, and pump it back into our economy? Lifestyle behaviors drive most chronic disease incidence, morbidity, and mortality. 48 These behaviors include smoking, excessive alcohol consumption, insufficient physical activity, and poor sleep habits. 49 With the help of science, these behaviors can be changed. And while there exists a dizzying number of consumer-facing wellness apps that claim to change these behaviors, very few have published evidence to indicate that they do so in any meaningful way. 50

Shockingly, even highly valued healthcare startups do not publish peer-reviewed evidence on their apps’ effectiveness. 51 If we are to move the needle on health, this indifference toward evidence and limited use of science must come to an end. We simply cannot afford to fall victim to the illusory truth effect whereby we accept evidence to be true based on how often we hear it repeated.

Digital health won’t advance without behavioral science

Digital health companies should have behavioral scientists embedded in their product development teams from the very beginning. Companies should also include behavioral science in their medical affairs departments, for both evidence generation and strategic leadership. The most forward-thinking companies will have chief behavioral science officers. 52

Within product development, behavioral design should operate in concert with user- experience design. 53 Behavioral design involves translating science into products and services. In addition, behavioral science should be positioned to work alongside analytics and data science. Establishing behavioral-data science architecture is necessary for many reasons, including planning experiments and interpreting users’ engagement data. Digital health companies need to go beyond a focus on the number of monthly or daily active users and ask themselves, what effective engagement looks like. 54, 55

Four questions for evaluating a product’s behavioral claims

  • What evidence supports these claims?

  • How was this evidence generated?

  • How is behavioral science informing product/service design?

  • Who is responsible for pilot tests/experiments?

Remember: Behavior change is hard. Science helps.

gina merchant

Dr. Gina Merchant, PhD, MA

MDisrupt Guest Blogger

Dr. Gina Merchant is a behavioral scientist specializing in digital health. She is an expert in user/patient engagement, how our social networks influence our health, and behavior change design. Gina has a PhD in Public Health, and an MA in experimental psychology.

Disrupt has a network of behavioral scientists; If your company needs this type of expertise to help you build your health product, talk to us—we can help.

The Differences Between Medical and Scientific Expertise. What The Healthtech Industry Should Know.

The Differences Between Medical and Scientific Expertise. What The Healthtech Industry Should Know.

In my 10 years as a medical executive in health tech start-ups, I noticed that medical/science people do not necessarily appreciate the difference between the different types of engineers or designers. To be honest, when I came to Silicon Valley, I considered all people who do anything with computers to simply be “IT people.” Likewise, many people from the tech industry don’t necessarily know the difference between the different types of scientists or the different types of medical doctors—or even the difference between a medical doctor (MD) and a research scientist (PhD).

Good Science Doesn’t Instantly Translate into a Viable Health Product 

Tech investors are increasingly interested in the $4-trillion US healthcare industry. Many are new to this sector. Although they use lawyers to do their legal diligence, they often use their own associates to do their “medical diligence.” Understanding the difference between medical training and scientist training helps to explain why the passion of a scientist entrepreneur may not necessarily translate into a viable health product or why the associate who did your medical diligence missed all the red flags that blocked your investment from widespread market adoption. 

Scientific validity is not the same as clinical validity, yet most of the literature provides scientific validity. In addition, not all MDs are the same. Some specialties get more training in clinical trials, while others develop more expertise in digital imaging, informatics, or device/test development. A dermatologist MD may not be the best person to handle medical diligence for a home laboratory testing start-up.

Medical Review Isn’t the Same as Scientific Review 

The confusion about medical and scientific training can impact efficiency in health tech startups. Once, after working at a particular startup for a couple years, I got frustrated at the commercial team for not getting medical review before releasing new collateral, despite multiple requests. When we met to talk about it, they explained that they did have medical review because a PhD scientist had approved the collateral. I said, “It’s good to get a scientific review, but it’s not the same as a medical review.” One of my teammates asked, “What’s the difference?” When I explained it, many of them seemed genuinely surprised. The purpose of this blog is to shorten the learning cycle on that epiphany.

(In a future blog, I’ll try to explain the different kinds of engineers to the healthcare industry. And I’ll tell them not to call software engineers “IT people.” I will also explain the difference between scientific and clinical validity, and what is required to bridge the gap between interesting science and a viable medical product.)


 Table 1: The training and expertise of medical doctors versus research scientists. Table 1: The training and expertise of medical doctors versus research scientists.

Not All MDs Are the Same

The next table addresses the high-level differences between the different kinds of MDs. This classic joke sums up the stereotypes quite nicely:

“A medical student, an internist, a radiologist, a surgeon and a pathologist go duck hunting. They barely find their duck blind before the first duck flies over. The medical student is the first to raise his shotgun, but unable to tell if the duck is really a duck, he does not shoot. The internist aims his shotgun, but can not tell for sure what subspecies of duck it is and wants to order more tests. He does not shoot. He asks the radiologist to take a picture of the duck. The surgeon quickly raises his shotgun, aims, and without pause shoots. The duck falls to the ground. The surgeon turns to the pathologist. “Go figure out if that’s a duck or not.” Funny, right? Even other doctors don’t really know what pathologists do. Pretty sure my family doesn’t. Now I can refer them to this blog.

 Table 2: Different types of medical doctors Table 2: Different types of medical doctors

Not All Lab Directors Are Created Equal

Some health tech companies choose to operate their own clinical laboratories, if their product includes a clinical test. The decision to operate one’s own lab rather than outsource the testing to an established clinical testing laboratory has important pros and cons that will be unpacked in a future blog. But one of the requirements of a clinical laboratory is that it is overseen by appropriately credentialed (and in some states, licensed) clinical laboratory professionals. So it is relevant to this blog to know who those professionals might be. 

Most types of clinical testing must be overseen and interpreted by a MD. However, a few types of clinical tests can be overseen by credentialed PhDs who have done a post-doctoral clinical laboratory fellowship. These include germ-line genetic testing, microbiology, chemistry, and toxicology. For many tech people, the difference between MD pathologists (who are trained to run all types of clinical labs) and subspecialty-focused clinical PhDs is not obvious. Using the example of genetics, the following table outlines the difference between the MDs and the PhDs.

 Table 3: Different types of laboratory directors allowed by CLIA ‘88 regulations. Table 3: Different types of laboratory directors allowed by CLIA ‘88 regulations.

The bottom line: Know your experts and what each is best suited for. Tapping the precise expertise you need will get your health product faster into the hands of the people who need it.

The Differences Between Medical and Scientific Expertise. What The Healthtech Industry Should Know. 5

Jill Hagenkord, MD

MDisrupt Guest Author

Jill is a board-certified pathologist with subspecialty boards in molecular genetic pathology and a fellowship in pathology/oncology informatics. She brings expertise in health product strategy, coding, coverage, reimbursement, medical and regulatory affairs, health policy, clinical laboratory medicine, population health, provider education and patient engagement.

MDisrupt has a network of MDs and PhDs with a wide range of knowledge and skills. If you’re evaluating a product or company and would like healthcare expertise, talk to us—we can help.

Understanding the Differences between Medical Culture and Tech Culture

Understanding the Differences between Medical Culture and Tech Culture

In a recent Business Insider article, John Ioannidis, Racquel Bracken, and other health tech experts lamented that the Silicon Valley tech ethos of “move fast and break things” is not being counterbalanced by the healthcare principle of “do no harm. (Why everybody gets duped by hot health and science startups, June 2019). Ironically, tech’s desire to move fast is slowing its ability to achieve widespread market adoption and profitability for health-related products. The goal of this blog is to help both industries better understand the importance of their cultural differences in order to get high-impact products to consumers more quickly.

 The healthcare perspective is underrepresented in health tech. I spent the past decade serving as the Chief Medical Officer of several health tech startups. With each one, I was initially energized by the potential for responsible disruption. The engineering, design, and product talent—and the money—was unlike anything available to physicians in a traditional healthcare setting. It truly felt like an embarrassment of riches. With each company, I was the only medical professional on the executive team, and usually the only MD in the company. With each one, I knew that we could have been more successful more quickly if the company had had an earlier understanding of the expectations of the healthcare industry and sensitivity to healthcare culture. I observed this same phenomenon in many of the health tech startups evolving into and out of existence around me.

Tech Needs to Get Curious about Medical Culture

 When I left traditional practice to embed myself in Silicon Valley, I recognized quickly that my tech teammates spoke differently than I did. They solved problems differently than I did. They worked differently than I did. If I was going to effectively partner with them to disrupt health care, I needed to learn about tech culture. I read every Silicon Valley holy book I could find—The Lean Startup, The Hard Thing About Hard Things, Measure What Matters, The Four, In the Plex, Hatching Twitter, The Upstarts, The Everything Store, From Good to Great, etc. I learned about OKRs, MVPs, 20% time, flywheels, doom loops, BHAGs, pivots, dogfooding, flat org charts, and scrums. I read about the history of the tech industry and the stories of how the FAANGs became FAANGs. (In a future blog, we will unpack all these terms. For now, just realize that in order to respect a different culture, it’s important to learn about why that culture is the way it is.) Too often, my tech teammates did not reciprocate my willingness to understand their culture. This limited the company’s ability to design appropriate products, close deals, and compile realistic financial projections. It cost real time and real money.

 Granted, the tech industry has successfully disrupted almost every industry in the last 20 years. Tech entrepreneurs are somewhat justified in feeling like their way is the right way and everyone else should get out of the way. But the reality is that the healthcare industry is different. One of the key differences is that it is not a free market. Full stop. 

In addition, there are multiple, very powerful stakeholders in health care—insurers, regulators, physicians, professional societies, pharma, and patient advocacy groups. Consumers often don’t feel like they should have to pay for legitimate health products out of pocket, so simply delighting consumers and getting them to vote with their feet is not enough to achieve widespread adoption, let alone topple the incumbent system. Unlike other industries, a direct-to-consumer product can’t circumvent the incumbent stakeholders. That’s because consumers will inevitably take the results of their health products to their healthcare providers. If the healthcare provider says, “What is this? This is junk. You’ve been swindled,” it doesn’t make for a positive consumer experience. The flywheel cannot gain momentum. You simply have to understand the values and social mores of the healthcare stakeholders to win.

Being Awesome is Not Enough

 So, how do you do that? With data, credibility, and transparency. It is not sufficient to think your product is awesome and convince consumers of this. You have to prove that your product is awesome. And not just awesome, but medically beneficial and economically worthy enough to justify the high cost of implementation. Generating this proof needs to be part of your go-to-market strategy and financial strategy from inception. What’s more, there is a well-established formula for how to do this. That means there is no excuse for confusion or delay, if investors and founders do their homework.

An obvious way to ensure success is to balance your leadership team with the right tech and medical professionals. If you go too far in the medical direction, you are essentially a traditional device company. If you go too far in the tech direction, you will waste too much time and energy learning the basics of market access and product-market fit. In general, I recommend hiring most of your engineering, product, and design teams from tech and most of your commercial and medical affairs teams from health care. Medical affairs can help make sure your product solves a real problem in health care and design the proof studies. Experienced sales, business development, and marketing professionals not only have the right contacts, but they also know how to deliver the right messages through the right channels at the right time. A future blog will elaborate on how to do this.

Culture Clash

This table highlights some of the cultural differences I’ve observed between healthcare and tech. 

 More details on the Nuremberg Code referenced above. More details on the Nuremberg Code referenced above.

Finding the Right Balance

We need to find the right balance of healthcare and tech cultures to get impactful products to patients quickly and responsibly, and to successfully usher in the much needed disruption of the incumbent healthcare system. The longer we delay prioritizing this balance, the longer we all have to live with the current broken system, and the longer we have to watch billions of dollars wasted on health tech startups  that are doomed to fail because the founders do not understand healthcare culture—both are pretty unbearable!

Understanding the Differences between Medical Culture and Tech Culture 6

Jill Hagenkord, MD

MDisrupt Guest Author

Jill is a board-certified pathologist with subspecialty boards in molecular genetic pathology and a fellowship in pathology/oncology informatics. She brings expertise in health product strategy, coding, coverage, reimbursement, medical and regulatory affairs, health policy, clinical laboratory medicine, population health, provider education and patient engagement.

Every health tech company wants widespread adoption for its health product. There is a community of healthcare experts who would love to help you. Talk to us—we can help.