All posts by admin

Coffee Chats with Nina: Understanding the Entrepreneurial Mindset

By: Nina Mermelstein

Taking the Leap: Part One of an Ongoing Series

Since joining the Aequitas Partners team last December, I’ve immersed myself in the healthcare technology space through interactions with clients and absorbing all the information I find about industry trends and the large financial investment going into this sector. The industry’s growth has captured my curiosity and I now find myself looking for additional answers to a different set of questions. Who are the entrepreneurs who are driving innovation in this space? What motivates founders of health-tech startups to make the precarious journey from a promising idea to a full-fledged business? Who are their role models, what are their influences, and what have they learned from past failures?

Given our team’s focus on talent, I figured that the best way to get into the entrepreneurial mindset is to do what I do best – interview executives. Over the course of a year, I am meeting with digital health company founders and CEOs to get the inside scoop on what it takes to build a company from the ground up in this industry. These leaders differ in age, gender, and professional backgrounds. Their companies are focused on different facets of the health tech industry, spanning from disease management to care coordination.

My candid coffee chats have already brought to light a number of trends that I’m excited to share with our newsletter readers through a series of articles. For this first installment, I focus on the initial phase in various entrepreneurs’ journeys—the point in time when they realized that it was time to build their companies, and how their professional backgrounds have prepared them to take that leap.

Learning on the Job

Since the majority of people I’ve spoken with are first-time startup founders, I was extremely curious about how they’ve applied their previous work experiences in various fields such as Finance, Marketing, or Social Impact in their current roles. To my surprise, my question, “How has your professional background as an Investment Analyst prepared you to build your business?” for example, was often first met with a very candid chuckle. I soon learned that while many founders agree that their professional backgrounds provided them with a unique set of skills and knowledge that they apply in their day-to-day startup operations, they felt that there was nothing that could have adequately prepared them to build a company from scratch.

One founder elaborated that while her experience in the venture capital space offered her key case studies of the successes and failures of other healthcare startups, she still felt that there were a lot of things that she could only learn on the job. As a first-time CEO and founder, she has gained a new set of instrumental skills by focusing on growing and coaching her own team of experts.

In my conversations with entrepreneurs who have previously built other startups, I learned that they were able to draw upon previous experiences for some of the early questions that other first-time founders often encounter such as which HR systems to use, the best process for onboarding consultants, and how to engage with investors. A second-time entrepreneur noted that while he had some of the answers from his previous experience as a founder, his new leadership role with a different growth-stage business came with its own unique set of obstacles that required him to continue learning and evolving his leadership style.

Bringing in the Clinical Experts

The depth of previous healthcare industry knowledge each founder had before launching his or her business varied, which surfaced a unique set of challenges. While some had a tremendous amount of healthcare industry knowledge, as trained clinicians or having worked at health systems, payers, and pharmaceutical companies; others lacked that previous insider industry experience.

One founder, whose startup sells into large payers, had previously spent a significant number of years as a high-powered executive in the payer space. She highlighted how her payer experience was instrumental in understanding the ins and outs of her current customer base. She can now accurately pinpoint the decision-makers within the complex payer structure, improving the sales cycle for her company.

Another healthcare industry veteran stressed how his healthcare MBA, and work on the provider and pharmaceutical sectors, was vital to understanding the nuances of the healthcare market. He felt that in order to be successful in healthcare, you really need 10+ years experience in the space.

On the other end of the spectrum, many of the founders who had less healthcare industry familiarity decided to bring in clinical executives early on, either by working with a physician co-founder, hiring skilled chief clinical executives, or stacking their advisory boards with knowledgeable clinical experts.

Finding a Better Way

As a result of these conversations, I find myself amazed by the number of entrepreneurs who have quit their high-paid positions to take limited salaries while dedicating all of their time towards building their businesses. During a recent coffee chat, one founder said, “it takes a personality defect to be an entrepreneur because you have to be willing to give up everything.” I needed to get to the bottom of what could possibly inspire these skilled professionals, often with families and secure careers, to take on that level of risk.

When I asked the founders about what motivated them to first launch their healthcare start-up, they all responded with a version of the same line: “There has to be a better way.” Each of the founders recognized flaws in their respective sectors of the market and decided to tackle these issues themselves since nobody else was effectively solving the problem.

Various entrepreneurs expressed that their personal frustration and experiences with broken aspects of the healthcare system have become the ignition and continued fuel propelling their businesses forward. A clinician, and now startup CEO, expressed how his 20+ years of first-hand experience interacting with patients helped him really understand the pain points in the system and inspired him to build a business that would empower both the patient and clinician. Another founder described how his father’s negative medical experience prompted his foray into the healthcare space and his determination to build a solution that would improve the lives of many patients.

One founder described his inherent entrepreneurial nature, beginning with his childhood lawn mowing business and his radio sales startup in college. He has always gone through life asking “why?” and constantly looking for better ways of doing things. A younger founder explained that his innate entrepreneurial nature involves a bit of “punk rock” since he often finds himself breaking rules and questioning the status quo. He further summed it up by quoting the founder of the outdoor clothing company, Patagonia: “If you want to understand the entrepreneur, study the juvenile delinquent. The delinquent is saying with his actions, ‘This sucks. I’m going to do my own thing.’”

Conclusion

Throughout my coffee chats with a diverse group of founders, I learned that while direct industry experience may offer perspective and help prepare solutions for pain-points, the perceived chasm of a lack of industry experience is not so wide as to hinder budding entrepreneurs from making the leap into startup-life. Several of the founders I spoke with did just that – albeit with slight adjustments to their approach and leadership style, as well as a steadfast determination to bring in the right people as early in the process as possible, in order to offset their lack of industry expertise.

When it comes to why one might launch a startup in the first place, the motivation amongst all of these founders comes from an ambition to fix a problem he or she has personally encountered in the industry. All of the founders offer a brand new solution or better alternative to the current resolution. Each of our founders expressed this simple yet elegant ideal: to solve a problem they were amazed to find was not being properly addressed.

My coffee chats have highlighted that, while past choices will inform one’s path, they don’t define it. Determination, commitment, and the steadfast desire to realize a better solution are the core ingredients necessary in launching a business. I’m looking forward to sharing more as the year progresses!

An Interview With Dr. David Berman, Founder & CEO of Slingshot Health

Dr. David Berman is a career Gastroenterologist, with over 30 years in practice, and is also the Founder and CEO of Slingshot Health. Slingshot Health is a marketplace that connects patients and providers directly, allowing individuals to bid on a physician’s time, leading to convenience, decreased cost and increased price transparency. Slingshot already serves the Greater New York City region, and is rapidly growing nationally.

Tim: David, you’ve been a practicing physician for over 30 years – entrepreneurial in your own right – but you’ve plunged headfirst into a health tech startup, as the Founder of Slingshot Health. Why now, and why Slingshot?

David: Those are questions I’m still trying to answer, believe it or not. I think a lot is just destiny. Having always dedicated my life to making the world a better place, through what naturally constitutes taking care of people – human beings – one person at a time. And I am just now transitioning to hopefully helping millions at a time. So why Slingshot Health? Well, it took 30-some-odd years to learn how to practice medicine – to get me to being a real doctor – and then, I think that the same reason I went to Medical School – that quest for knowledge – has always led me to exploring different parts of the world, not just medicine, but economics, politics, religion, history – and you acquire a certain knowledge base over time, and you may be presented with that ‘aha’ moment, where you combine all that knowledge over decades of life experience, and that’s what happened. In the space of a second, an idea was born. Actually, I think I was shaking – saying ‘wow, this is it, this is it!’ So it was a combination of life experiences and just an operating system of always having your eyes wide open and trying to be the best person you can be.

Tim: Tell us a little more about Slingshot. What are you after and what’s the mission?

David: It’s a relatively very simple concept. The mission is to put people back in control of their Healthcare destinies. Whether that’s patients or providers – that’s the goal. After having spent 30+ years in Healthcare, I saw people on both sides with less control, less affordability, less accessibility and less transparency, and living that nightmare day-to-day. If you think it’s bad as a patient – which it is – try living it as a provider. Try running your own practice, seeing patients, and then having all of these other things forced upon you that are unrelated to the patient’s visit or their problems, in order to justify somebody else’s existence – somebody else’s fix for Healthcare. And we get all these newsflashes that “Healthcare is broken, but we have a fix for it!” All we really get is another acronym, another few trillion dollars in debt for my kids’ generation, less transparency, less affordability and less accessibility, because nobody comes at the problem – or the solution to the problem – from the way that makes sense: the provider.

Tim: So what does Slingshot do? How does Slingshot solve that problem? Tell us about the platform itself.

David: The concept is really very simple: You should have complete control of your Healthcare destiny. The same way I want to have complete control over my professional destiny as a provider, the same way my plumber charges me a hundred and fifty bucks an hour, and sees me when he wants to see me – the marketplace is fully in effect there. The only place that the marketplace is not fully in effect is in Healthcare. Instead of the current system where patients beg for what they need, we provide them with not only what they need, but what they want. At the same time, we present providers with the freedom to practice the way they thought they would going into medical school.

We’re an unfettered, dual-sided marketplace. We don’t charge anybody anything. We’re free for patients, we’re free for providers.

A patient comes to our homepage, they tell us what they want, when they want it, and how much they want to pay. We tell them the average price for that service. That bid goes out to all the providers that can provide that service for that patient, and they have the freedom of either ignoring it, accepting it, or counter-bidding. And because when a patient joins, they use their HSA/FSA account, credit card or debit card – it’s a cash payment – so from the provider’s perspective, they are saving over 50%. There’s no co-pay collection, there’s no balance billing, there’s no administrative costs, there’s no MACRA, no MIPS, no claw-backs – nothing. So they know what they’re going to be getting paid, because we tell them within 24-48 hours that they’ll receive that from us. They get the freedom from the administrative burdens of having to try to collect that dollar, and having to satisfy different requirements imposed by insurance companies and government, and having to check off different boxes during that patient visit. If you haven’t gone to the doctor recently, they spend half their time with their face in the computer screen, making sure those boxes are checked off. What a waste.

Tim: Any big wins that you can share with us so far?

David: I think the biggest win from my perspective is being able to grow a team centered around our culture of humility and love and kindness. And those are just immutable values. The fact that we’ve controlled that and maintained that and have people who are part of the team who share that operating system and the vision, is everything to me. It’s easy as you grow quickly, to kind of let go of that culture – and that happens I think very frequently. It’s very common to gain more business success, at the price of ethical and moral imperatives. You can build a lot of things, but if you don’t build it with the right people and the right operating system, it’s not worth it in the end. At the end of the day, I look at life in lots of ways. One of the ways is that I have an existence and I have a life, I am going to die eventually, I want to make sure that my life lives on beyond my body, that I am a positive value proposition that lives on beyond my body; that I can do good for people, do good for the world. So if I can do that, that would be a huge win. Being able to wake up in the morning and participate with the people I do during the day – whether it be in my medical practice or with the people at Slingshot, that’s a huge win. A huge win is going to the Slingshot offices in the morning, and being able to give everybody a high-five or a hug, realizing that they voluntarily come and join me on the island every day. That they do that with a smile on their face, and a sense of urgency and vision and mission – that’s really spectacular and special. When people go to the office and you can see that, it’s energizing and invigorating. That’s a win. The fact that I’ve attracted people who have helped me – including you – from the beginning, makes me believe that God works in mysterious ways.

Tim: How about on the Investor, Customer and User Adoption Front?

David: The fact that we have two billionaires in our $8M Seed round is pretty exciting. The fact that we have former Tiger Management execs, and the head of M&A at Goldman Sachs and his associates on board is personally a huge win. So, on the investor side, we were able to raise a lot of money at a very nice valuation, and attract people from all walks of life.

The other wins that we’ve had in the marketplace are with the providers. We were able to sign up 1,000 providers two summers ago, with little difficulty. We now have contracts with major Healthcare systems, including Hackensack Meridian Health.

On the user side – we’ve now booked our 6th month of 50% growth month-over-month, in terms of bids. We now offer 90 different specialties, and 1,000 different services on our website. At the patient level, today I had a Slingshot patient that walked in, a gentleman that was being treated for Hypertension. He said to me, because he had just started a new job, and had no insurance, ‘This is the most amazing thing! I was able to see a doctor – someone to take care of me – at a price I could afford. How can I help you?’ And we get that all the time – “How can I help you?” The fact that we’re putting people back in control is really very heartwarming.

Tim: What surprised you most in the first two years?

David: The amount of acceptance that we get across the platform. We have never heard that “this is not scalable.” We have never heard that “this is not going to work.” It’s always about execution. So, the surprise was – and I don’t want to say it’s really a surprise, because providers are patients too; I’ve been a patient, I know how terrible the system is, because I’ve been on both sides of the marketplace… the surprise was, I didn’t think we would be at this point in our team’s trajectory that we are today. We have 30+ full time people, and growing. I knew it was going to work, there had never been a doubt in my mind, from the first second, that this is going to work – but I guess the surprise is that so many different people from so many different walks of life agree with me. We’re able to get our message across in under 60 seconds, and people get it, no matter what they do.

Tim: The benefit of having a relatively simple story.

David: Yeah. Well, I’m a simple guy (laughs).

Tim: The simpler the better, especially in Healthcare.

David: That’s not a usual term for Healthcare – simple.

Tim: No, it’s not. So you’ve talked about this a number of times – your quasi-day job is your medical practice. You’ve successfully built a time-tested practice. How has this venture been different than that, for you?

David: There really is not that much of a difference – the only difference is the subject matter. Building something is building something; people that are successful at building things are going to keep on doing it, and they can just change what they’re building, as long as it is in their wheelhouse, or leverages their skillset. Building a medical practice is not easy, in fact it’s pretty hard. I was employee number one, 25 years ago, and now we have several dozen people. And what you do is you learn… there’s always learning, every day. There are several advantages in being a physician that comes into play when starting a business. The interesting thing in Healthcare is that we approach things very differently than MBAs and business people. We’re trained in a collegial way – we like people around us, we don’t think in an adversarial way. If we did, people would die. We are quick to admit what we don’t know. If we try to do something to the patient that we shouldn’t be doing, they could die. There’s nothing really life or death about business. Businesses do live or die, but nobody’s actually dying. We are trained to retroactively analyze everything. You examine a series of decisions that led to that outcome, trying to learn why. You can apply that to business too. And I think that’s very critical – people hesitate to find out what’s wrong with what they’re doing. It may not be wrong when they’re looking at it, but the trick is to find something early before it becomes a big problem. So there are lots of things you can apply from medical training to building a business.

Tim: What’s your grand vision for Slingshot?

David: The grand vision is to be the world’s marketplace. Next quarter – and I want to show you the new homepage – we’ll launch Slingshot Pet. Same coding, 98% compatibility, we just switched the provider from a physician to a veterinarian. And with 1.1 million cats and dogs in Manhattan, we could be a very successful company just with that alone. And you can change it to anything – it can be an accountant, a lawyer – hopefully we do that at the end of next year. So we are creating a prime membership that will encompass different marketplaces. The first one is human health. And we’ll combine that with Slingshot Pet, and hopefully we combine that with different marketplaces along the way.

Tim: So with all that in mind, what keeps you up at night?

David: Lots of things (laughs). There’s things that I always worry about. One is that as CEO, I have several responsibilities. One is about making sure we’re executing and allocating. The most important thing is to make sure the people on board the team are happy, fulfilled, have a sense of vision and mission, understand the culture and the operating system, and understand that I want them to be the best they can be. It’s a matter of making sure everything is in place, that there’s enough money in the bank, and that we’re executing on all these different fronts.

There’s a healthy fear of failure. And I mean more the big fail. I like to fail – it means I am pushing myself. But if you look at the org chart in our office, I’m at the bottom. And that keeps me up at night, because I know I have to answer to everybody, not just the people on the team, but the investors, the people we do contracts with, and everybody. But what’s interesting – I don’t feel pressure at all. It’s actually an honor to be where I am, it’s a blessing. The first thing I say in the morning is ‘Thank you.’ And the last thing I say is ‘Thank you.’ And it’s been that way for a long time. I just want to make myself the best person possible, to lead the best life possible, and make the world a better place. That’s what keeps me up at night – to make sure that I don’t fail myself, and in doing so, others.

Tim: So if you had a do-over on anything since you started the company, what would it be?

David: I look at every experience I have – good or bad – as a learning moment. So I don’t ever want a redo. What I do want is to make sure that I am cognizant of everything in the past, and that I am integrating it into myself, into my being. There’s a reason that thing may have happened, and the outcome may not have been what I wanted it to be. I have to understand why that happened. I think there’s a reason for everything that happens, so I have never in my life wanted a redo of anything. And there have been some moments where probably… (laughs)… where probably somebody else has wanted a redo… but I think things happen for a reason, and I am charged with trying to figure out why.

Tim: Anything you want to leave the people reading this with?

David: I think that no matter what you’re doing, it’s important to set your goals properly. Is it about getting wealthy, or is it about making you a better person, or is it about making the world a better place? I think if you put money or capital accumulation ahead of everything, that will create jaundiced lenses through which you will see your project or your company. If you’re key on monetizing something, that should be a natural result of very hard efforts solving a problem, that makes people’s live better. A lot of startups are formed around people having personal pain. They live through something that they don’t want to live through again or they don’t want other people to live through. And if that’s the reason you’re creating your company, and if you can make that operational and execute that, monetizing becomes easy. I think that’s important – I think it’s really important to put life in perspective. You have a very short amount of time on the planet. It may seem long to you… my advantage is that what I do during my day, I see things happen to people for unexplainable reasons. Because of chaos and entropy. I understand how precious every day is. Few people do, the way that I do, because I see what happens. And if you create the proper value proposition to each and every day, knowing it could be your last, and knowing what you want to leave behind, it’s a start. If you take each day and make it a tile in a mosaic, that mosaic out of tens of thousands of days of life can be spectacular. If you don’t have that many tiles and your mosaic is kind of small, it can still be amazing. Every mosaic can be special. And it depends what you want to paint with that mosaic, is it a dollar sign, or is it something that you want to last thousands of years, that somebody unearths and says ‘wow!’ And that’s what it’s about. That’s the way that I drive myself.

Tim: That’s a good note to end on, thanks David.

 

A Brief History of Employer Sponsored Healthcare

By: Steven Berman

Perhaps no other facet of our society touches our lives as acutely as Healthcare. Given the industry’s impact on everything from our personal lives to our national economy, one might expect that the average American would be indelibly linked to its financial underpinnings. Yet nothing could be further from the truth. Most Americans have no clue what their Healthcare actually costs, given that someone else –Insurance – is paying the tab.

So how did we end up here? How did America find its way into a system where consumers are so far removed from the costs of their care that most don’t even know the actual price of the last prescription drug they took? In an effort to shed light on the subject, we thought we’d pluck a page out of The History Channel’s playbook and briefly examine the history of health insurance in the United States. Hopefully doing so will help illuminate exactly why we are where we are today (while also providing some nifty historical tidbits).

So without further ado…

The forerunner to what would eventually become modern-day group health insurance didn’t come to fruition in the United States until the turn of the 20th century. Given the state of the industry prior to then, Healthcare’s delayed entrance on the national stage should really come as no surprise. Throughout the 19th century, Healthcare as an industry rarely provided effective outcomes to patients seeking respite from illness and disease. Medical care was substandard at best, and hospitals were mostly sick houses for the poor and those afflicted with contagious disease. Indeed, the goal of medical care at the time was – to quote an infamous saying – “to cure seldom, to help sometimes, and to comfort always.”

By the turn of the century, however, advances in medical care began to considerably improve patient outcomes. Innovations in the fields of bacteriology and anesthesiology made surgery less painful and much safer, and modern medicine helped transform hospitals into effective treatment centers. At the time, consumers were well aware of the costs of care, as those costs were so low that they were not considered onerous (oh how times have changed!). Of greater concern was the loss of income sustained during time away from work due to illness or injury. To address this growing anxiety, the first employer-sponsored group policies were initiated. These pre-paid group plans were not aimed at covering medical expenses, since those were not of primary concern to patients; rather their purpose was to replace lost wages incurred due to an inability to work. Patients covered their own medical expenses in a standard fee-for-service model.

An interesting footnote here: Physician associations actually discouraged companies from offering group care policies, which were viewed by physicians as infringing on their control of care (and doing so at a lower cost). During the early part of the century, opposition to employee-sponsored coverage dissuaded numerous companies from escalating their participation in medical care. One prominent example involves the famous retailer Sears, Roebuck. The company doctor was forced to resign after the county medical society refused him membership due to his supervision of a group policy. Not coincidentally, his successor persuaded the company to limit their pre-paid care packages. And word of this type of public pressure got around. A 1916 Public Health Service study found that only only one of 425 companies surveyed fully funded pre-paid group plans.

By the 1920s, however, things were starting to change. Public demand for group health insurance was on the upswing, thanks to the notion that healthcare could actually… ahem… care for one’s health. Hospitals even began offering medical services to individuals on a pre-paid basis, and more and more consumers emerged into the Healthcare marketplace. Yet despite the industry’s rapid growth, there was still plenty of progress to be made. A report issued by the Committee on the Costs of Medical Care at the end of the ‘Roaring 20s’ provides an illustrative snapshot on the state of Healthcare at the time. A few highlights:

  • • Per capita spending on healthcare averaged $25-$30 per year (about 4% of national income). However, 3.5% of families bore roughly 1/3 of that total.
  • • 1/3 of those receiving hospital care needed government largesse or philanthropy to pay their medical bills.
  • • Around 150 multispecialty medical groups were in existence, and many were offering innovative delivery mechanisms that coordinated patient care across certain metrics.
  • • Several employment-based medical expense protection arrangements were being developed and launched; some that offered benefits for as little as $6-$12 per year.

One of those employment-based arrangements that came to fruition during the decade led to the formation of the largest health insurance provider in the nation. In 1929, then vice president of Dallas, Texas-based Baylor University’s health system, Justin Ford Kimball, began noticing a hefty amount of unpaid medical bills, mostly belonging to Dallas educators. Kimball developed a plan in which an enrollee would pre-pay just $0.50 a month to cover the cost of a 3-week stay at a hospital. The coverage would be initiated after a 1-week hospital stay, and the fees incurred during that first week would cost $5.00 per day above the pre-paid coverage amount. Interest in Kimball’s innovative plan quickly skyrocketed, and the plan became known as a Blue Cross plan. The next year, Blue Shield plans were introduced to provide reimbursement for physician services. In 10 years time, enrollment in both plans grew from 1,300 covered souls to 3 million.

The growth of the medical industry and the sprouting of innovative insurance plans cheerfully coincided, giving rise to a budding new sector of the economy – that of health insurance. Health insurance addressed a key pain point in the market: the mass-consumerization of the industry, and the resulting interaction between consumers and the costs of care, which was beginning to take place on a large scale for the very first time. But the health insurance industry in its current form didn’t sprout up overnight. It would take an accident of history to help pave the way for the complex and overarching system that we know today…

In the wake of the devastating hyperinflation that gripped post-WWI Germany, the FDR administration issued wage and price controls in order to stem a similar tide that some feared might occur as the administration attempted to lift the country out of The Great Depression. What the FDR government didn’t foresee was the vitriolic reaction from unions and labor groups, who threatened to strike en masse. To avert a cataclysmic strike, FDR struck a deal with labor, exempting employer-paid health benefits from wage controls and income tax. The exemption afforded a 100% tax deduction to employers, while employee benefits were exempt from federal, state, and city taxation. In a war economy with labor shortages, the tax exemption became a means of circumventing the wage controls that were instilled to counteract hyperinflation. FDR’s decision generated enormous demand for employer-provided health insurance, and ultimately led to the decline of individual fee-for-service plans. This was the turning point which saw consumers first become detached from the cost of their Healthcare.

The 1943 exemption helped balloon coverage from less than 10% of the population in 1940 to nearly 70% by 1955. By 1958, an estimated 3/4 of the 123 million Americans with private health coverage were participants in employment-based programs. By 1960, 79 Blue Cross and 65 Blue Shield plans had been established, 250 to 300 independent and pre-paid group plans existed, and over 700 commercial insurance companies were selling individual or group coverage.

Thanks to an accident of history, our modern health insurance system was born. As a result, employers and insurance companies bore most of the costs of insurance throughout the second half of the 20th Century, hence the general public was almost entirely removed from the cost-element of Healthcare. But with the advent of pioneering pharmaceuticals and groundbreaking procedures, costs rose sharply, and premiums climbed higher as a result. The 1990s saw double-digit growth in premiums, which led many small businesses to either redesign their plans with higher cost-sharing by employees or cease offering health benefits altogether. The combination of rising costs and benefit reductions led to what is known as ‘the small employer-based health insurance death spiral.’ Essentially, the individual market expanded as small businesses could no longer afford to adopt robust group plans. And as demand increased, flaws in the individual market were soon exposed. Medical underwriting procedures began to be questioned, application denials – some leading to fatalities – made headlines, and a general lack of discontent with our Healthcare system inhabited our public zeitgeist. In short, costs were ballooning, and the level of care wasn’t meeting consumer expectations. Something had to change.

That is where the country stood prior to the Affordable Care Act, which was passed in part to standardize insurance plans and provide consumer protections, as well as to offer universal, affordable care. It’s interesting to note that the consumer frustration around Healthcare centered on the fact that consumers typically hadn’t been exposed to the cost-element of our Healthcare system – at least not until the small employer-based health insurance death spiral forced them into the individual market. Once consumers hit the private market, they were aghast at what they found: pills and procedures that broke the bank.

Regardless on where you stand politically on the ACA, most healthcare professionals acknowledge we are continuing to move more towards a value-based system, which will only further the “consumerization” of healthcare. Whichever way we’re headed, it’s vital that we instill some level of transparency in order to enable us as a society to make more informed healthcare decisions. I want to be clear I’m not proselytizing here, I am simply advocating for a more healthcare literate citizenry in regards to costs. It is my belief that because we as consumers had such little skin in the game, we’ve allowed our system to become bloated and overly complex, and as we head down the path to get it under control, education is a strong first step.

A Fireside Chat With Tim Gordon: Talent Questions Keeping Founders Up At Night Answered

I don’t have all the answers, and I certainly don’t have all the questions, so rather than taking a stab at what was on people’s minds this quarter, I asked many of the Founders and CEOs we work with what was stumping them. A number of questions popped up consistently, so we took a run at them here.

 

In startup hiring, how do I trade off between drive/raw talent and role-specific experience? (AKA Hiring Athletes)

I’ve always been a fan of hiring athletes (those with drive, motivation and talent) for any role. I’m convinced that you can successfully hire that prototype at all levels successfully, but it takes a specific culture and an open mind to make it work. That said, when it comes to startups – especially in Healthcare – experience with the way things have always been done isn’t necessarily the perspective companies want or need. No matter what, I’d advocate for job descriptions as guideposts, not checklists, because there’s tremendous value in hiring people who have a track record of just figuring out how to get things done. Often times, there’s just no way around it – some criteria to be a CTO or Chief Medical Officer are non-negotiable – but A players who know how to make things happen are invaluable in startup environments where structure is often an illusion.

All of that said, it’s worth noting that hiring for drive and motivation is table stakes, no matter what position you’re filling. I encourage folks not to get too hung up on checking off every bullet point from a job spec – especially when you may be able to fill gaps with other hires you already have planned.
 

What’s the difference between Sales & Business Development?

These two are actually quite different. The reason people conflate the two, I believe, is because somewhere along the way “sales” co-opted “business development.” Maybe ‘Business Development’ is a more elegant, less threatening title for a Salesperson. I’m not sure why sales turned into a dirty word – it’s literally the lifeblood of any product company. In reality, there’s absolutely nothing wrong with driving sales and growth, but we all know how important optics are when it comes to Sales, and so the Business Development moniker seems to have stuck to sales roles.

In practice, business development is something else entirely – call it a cousin to sales. Typically, companies should think about hiring a Sales Executive when they’re past the product-market fit stage, and they need someone who can build a pipeline, qualify leads, manage deals through the pipeline, conduct resources across an organization at various stages of the sales process to ensure the right people are involved, and generate revenue. Business development in my view is more about strategic partnerships; developing channels and driving sales through those channels. A strong BD person can build those partnerships today, as well as establish and foster relationships that drive exponentially increasing value in the channel afterward. There’s also a strategic approach to channel-building. It’s not about just going out and selling your product, but convincing your partners to sell for you as well. That type of channel-building generates revenue without a commitment from your Sales people.

There are even certain cases where business development execs don’t even generate revenue in a traditional sense today, but instead focus on building value-added relationships between organizations. The benefit here isn’t revenue (in the short term), it’s the fostering of credibility amongst the user base, the growth of user adoption, and the evolution of value drivers for those users. It’s this bigger-picture component that separates business development from sales (that’s not to say that sales isn’t a strategic enterprise, it’s simply that the strategic element of business development requires a slightly different approach). I’d argue there’s also a healthy dose of evangelism required in business development, as you’re often convincing folks that they both have a problem, and that you have the solution.

Lastly, it’s important to keep in mind that business development and sales can and should coexist. An organization can have both – effectively acting as peers – performing very different, yet complementary functions. We’ve completed searches where we actually titled the BD role ‘VP of Partnerships,’ just to make it abundantly clear that the position is not a traditional sales role and won’t be generating revenue, instead achieving other objectives such as user acquisition and creating value for users once they’re embedded in the platform.
 

How do I expand my funnel of potential candidates across multiple roles?

The key here is having a plan. Start by breaking down the roles you’re hiring for, the priority of those roles, and what success in each role looks like (for more on the importance of planning before hiring, reference this article from our Q1 2018 newsletter).

Once your plan is in place, harness the power of your network to get as many people working on your behalf as possible. That means ensuring that key stakeholders (leadership, investors, board members and other employees) understand your needs clearly, and that you’re holding them accountable when it comes to uncovering potential candidates. And speaking of accountability – success depends on it. Someone on your team has to own the process internally, and be responsible for managing it and reporting on progress

On a typical search, we identify close to 200 potential candidates, proactively. We get, on average, better than 60% engagement rates, which means there’s a good chance we’ll talk to 120 candidates, if not more. We interview a large portion of those, just to get down to a single hire. That doesn’t include all the networking conversations we have with folks we know. And that’s coming from an organization that spends pretty much all day working on this stuff. This obviously won’t be the only thing on your plate. If you’re relying on inbound resumes, the numbers are even more lopsided, as you’ll be sorting through lots of resumes for folks that didn’t even bother to read your spec. So your goal from the outset should be to make the process as efficient and hassle-free as possible. To that end, we always recommend clients utilize an applicant tracking system. None are prohibitively expensive, and the ROI is immediate.

Another way to simplify the process is to have your current team do the heavy lifting for you. I’m a huge fan of internal employee referral programs. Incentivizing employees to recruit on your behalf is the least expensive and most efficient approach to identifying strong talent. Obviously, you won’t be able to fill every single role this way, but if you manage to source a handful of Engineers from your Development team, that leaves you plenty of resources to invest in finding candidates for senior searches that are harder to fill and will likely require outside expertise. An added benefit is that your people already know your culture. That means they’re likely to refer folks who will be a strong fit. Just be careful when it comes to diversity – you don’t want your entire employee base to look and think the same. Cliques form and groupthink ensues. It can be ugly.

The most important takeaway here is that being proactive is key. Don’t sit back and fall into the trap of assuming that because you know how exciting your business is, everyone else can see that from the job description or your website. They can’t. It’s your responsibility to convey the strong foundation you’ve already established, and the boundless opportunity that lies ahead for your business and employees.

 

When’s the right time to hire XYZ?

Broadly speaking, the right time is always now. If you’ve got the budget and you’re in growth-mode, I’m an advocate of snapping up the best person you can possibly land, any time you can. If you’re not ready to pull the trigger, it’s still worth proactively building relationships with candidates you’re excited about early, so that when the time comes, a quick call gets the job done.

That said, the role you search for is going to be dependent on your current needs. If you’re getting ready to raise a Series B and you don’t have a CFO, it’s probably time to get one. If you have a product that’s already been validated with product/market fit, but no strong pipeline – and no one on your team is particularly sales-oriented – then it’s safe to say that you need a Sales exec. The key is not to wait until the pressure builds before you start your search, that’s when emotional decisions take place. Remember, the process alone can create value, as you build relationships along the way. You might not need that rock star CFO you meet with today, but when the time comes six months from now, you’ll be able to pick up the phone and say, “We’re ready for you.” Most importantly, Founders and CEOs need to know what they are great at, and what they stink at. Hire the people that gap-fill your weaknesses as soon as possible, and get out of their way. Don’t be the hub and spoke CEO.
 

How often should we be giving feedback to employees on performance?

Constantly.

I’m of the view that performance reviews are a necessary evil, because structure is important. It’s critical that people understand from the outset what success looks like in their role, and what their performance is being measured against (this is especially true if their compensation is tied to performance). As the one giving the review, having a scorecard helps me avoid recency bias, since we do our reviews every 6 months. I strongly believe that no one should walk into a performance review and be surprised by the feedback. That implies feedback should be delivered in real-time. This can be challenging for startups, given that startup-life moves quick; months disappear. As a result, there can be an illusion of strong communication, because you’re all so physically close to one another. Sometimes folks who work shoulder-to-shoulder think they’re communicating, when in fact they’re internalizing certain things.

For example, you might have been meaning to give Sally feedback about a few things you’d like her to do differently or improve on, but the right moment keeps getting away from you. Six months go by, and Sally walks into her performance review assuming she’s been doing a bang-up job. Then you deliver your feedback and it’s not as positive as she expected, perhaps signaling that as a result, she didn’t earn her full bonus. She had no clue that was coming, and now she’s shocked. People tend to be at their worst when they’re caught off-guard by bad news; as such, that kind of feedback can intensify an already bad situation, which could have been corrected long ago had the person been made aware of the problem in a constructive fashion. If the underlying thesis is that most people want to kick ass at what they do, consistent feedback is their oxygen.

The ‘togetherness’ of startups creates an additional, often-overlooked challenge for companies when it comes to delivering real-time feedback. CEOs typically want to deliver positive feedback publicly and negative feedback privately, which is difficult when you’re all in a single room together. One solution here is to frame your constructive feedback in such a way that you aim it at the entire group, as opposed to a single person. You can then take that person aside later on to assess whether they absorbed your key points. That way you avoid delivering a public lashing. This amounts to a balancing act, which requires a certain amount of tact, however it’s vital that CEOs and Managers feel comfortable delivering negative feedback. If the aforementioned approach feels too thinly veiled, just grab the person before the day is over and have a chat.

My goal is always to make sure that anyone who is a part of our team has a good sense for where they stand at any given point in time. There are no absolutes, and short of something unethical, there’s virtually nothing that could lead to someone being shown the door out of the blue. Our job is to invest in smart people, know they’ll make mistakes, celebrate that, and learn from it.

An Interview With Dan Weinstein, CEO of Oshi Health

Dan Weinstein is the CEO of Oshi Health, a digital therapeutic platform for the self-management of Inflammatory Bowel Disease, based in New York City. Dan is a serial entrepreneur, and was the Co-Founder and COO of Cohero Health, another digital therapeutic platform for respiratory disease, prior to joining Oshi.

Tim: Dan, tell us a little bit about Oshi Health, and what drew you to the business?

Dan: Oshi Health is a digital health startup based in New York. We’ve launched a mobile app called ‘Oshi,’ which is a chronic disease management platform for people with inflammatory bowel disease (IBD, which includes Crohn’s disease and ulcerative colitis). We launched the app in June and it’s available for free in the Apple and Android app stores.

Oshi helps people better manage IBD through 3 core pieces of functionality: Track, Learn and Ask.

On the Track side, we help patients keep track of their treatments and lifestyle factors which could impact their disease. We also help them track their symptoms.

On the Learn side, we have original content that’s personalized to patients. We provide information on how to manage the disease itself – and how to have a healthy, balanced life with a very debilitating disease.

On the Ask side, people can submit their questions directly within the app, and we have a team of gastroenterologists and IBD experts who answer them in a moderated forum within the app.

Two things to know about Oshi: Right now, we offer the first all-in-one mobile solution to help patients find better control and live better with IBD. But our mission goes much beyond that. IBD is really unique – we don’t know what causes it, and we don’t know what causes flare-ups. Patients will experience remissions – where the disease goes dormant and they feel fine, and then they’ll suddenly have a flare, and we don’t know what causes that. And even if we did, it’s a very personalized disease, so what causes a flare for one person might not cause a flare for another person. And what works to help one person control their disease might not work for other patients. So our grand vision for Oshi is to be the platform that helps build the knowledge of what are the most effective treatments — including lifestyle choices — for different types of people with IBD.

Right now there are about 11 million IBD patients around the world, and each one of them is running a little experiment on themselves – they are doing a clinical trial, in a sense, with an N of 1. They are trying a mix of medication, making lifestyle changes like sleep, diet, exercise and maybe they’re trying some non-traditional medicine. They’re desperate to find a way to control their IBD, so they’re trying a recipe of different things to achieve remission, and some of them are having success. Some of them are figuring out what works for them to achieve remission.

But, right now, they are the only ones who benefit from what they’ve learned. Oshi is enabling there to be 1 clinical study with an N of 11 million. Our platform collects the real-world evidence of ‘what are patients doing, and what are they finding success with to control their IBD?’ And then we can leverage that in the future to make recommendations for personalized treatment. So we should ultimately provide a newly diagnosed patient with the most likely recipe of things that will help them control their specific version of IBD, and then we will be the tool to facilitate their treatment, as well as track and manage it.

Tim: So with that in mind, what has the partnership or origination from Boston Consulting Group’s Digital Ventures team provided in the way of a head start for you guys?

Dan: We were launched in collaboration with a group within Boston Consulting Group called Digital Ventures. They’re a really interesting group that basically creates startups. They helped create our strategy, business model, and early product. So the very first thing they offered was acceleration. After a few months with BCGDV, Oshi was where a normal startup would have been after a year or two. We also had some very smart people helping us develop our plan and business model. We sometimes veer from the original plan – it’s healthy to do that – but it’s always helpful to go back and see, “Are we doing something that was originally envisioned, or are we doing something different? And is there a reasonable cause for us to be doing something different?”

Also, as an early-stage startup, one of the most difficult challenges is getting credibility and getting people to pay attention to you. It totally changes that dynamic when we’re able to mention that BCGDV was involved in our creation. We actually worked out of their really nice space in Hudson Yards for the first few months, so when we’re building our team and interviewing people, it was nice to be able to show off an amazing office space rather than my kitchen!

Tim: That was not the worst setup that I’ve ever seen. It was a pretty good situation in the beginning. Can you share an example of a patient use case with the platform that you guys have seen so far, from a success perspective?

Dan: Imagine you’re diagnosed with Celiac disease: It’s one of the worst days of your life, but it’s also one of the best days of your life because you finally know what’s wrong with you, and somebody can tell you exactly what to do to get rid of the symptoms you’ve been dealing with, but didn’t know how to fix.

The day you’re diagnosed with IBD is just a bad day, because there’s not a great story yet of what are we going to do about it. IBD medications are not ideal; they have really bad side effects, they don’t always work, and it’s hard to predict if they’re going to work for you. So it’s just a bad day.

What Oshi offers patients is some guidance on that dark day. One of the pain points is that patients don’t know where to go for credible, reliable information that pertains to them. Because with IBD, there’s not a lot known – and there’s a lot of misinformation out there. So on the Learn side of Oshi, we have content that helps educate patients – Oshi content is verified by IBD experts, it’s written by experts, it’s all credible information, and it’s personalized. We know if a patient has ulcerative colitis or Crohn’s, as well as if they are experiencing a flare or not experiencing a flare. We know which Oshi articles they’ve preferred in the past. Based on that information, we serve them a personalized news feed that gives them the most relevant information. That’s something that doesn’t really exist anywhere else, and that’s something that patients have really responded to, because they finally have a place to go for something that can really help them.

The Tracking features of Oshi help patients figure out what works best for them. So let’s say that a patient reads that avoiding gluten has helped other patients and maybe it can help them. We offer them a tool to track their progress on that specific regimen that they want to try, and we show them if it’s working for them. It also creates a report that they can share with their physician to make the office visit more productive. No more struggling to remember what happened 6 months ago, or dealing with “recall bias.” Instead, their treatments and symptoms are all mapped out on a nice report that they can share with their doctor to really individualize their treatment.

We already have 20,000 downloads in the first four months of launch, and it just shows you how much patients have been wanting a tool like this.

In the future, the use case will also include aiding with the challenge of IBD diagnosis. It can take years before a patient is properly diagnosed. Imagine a world where you have a tummy issue, you download Oshi and you use the app for a few weeks, and it helps you track your symptoms, helping you identify or screen for what disease you might have. The app could say, “Hey, this might be indigestion, or it might be IBD, or this might be Irritable Bowel Syndrome, which is a totally different disease, and they’re all managed differently.” So it gives you and your healthcare provider a little bit more insight into what the diagnosis might be.

Then, once you go to a doctor and you are diagnosed with IBD, today, there’s a standard of therapy that is tried, and it’s a lot of trial and error: Let’s see how you respond to this drug, and if it works, great, and if it doesn’t, okay let’s try the next drug. In the future, Oshi will have learned about patients like you, and we’ll know which drugs you’re most likely to have success with. And so it will get rid of that trial and error, and we can prescribe you something that is more likely to help you. Then Oshi becomes your tool to help manage that treatment regimen, and then you become a new data point in our global research platform, and we learn about how you respond to that treatment, and we feed our algorithm with more one more data point to make it even more accurate.

Tim: That’s great, that’s awesome to hear. What lessons have you learned from your last entrepreneurial go-around that you want to apply to your time here at Oshi?

Dan: The first thing involves hiring – which is very applicable for this conversation. This is now my 4th startup, and one of the things I’m doing differently at Oshi, based on what I’ve learned, revolves around hiring. I’m now older, I’m a family man, I have two small kids at home. So I can’t just work all day like I used to. I have to go home and be the Chief Diaper Officer. Recognizing that, I’ve hired a Chief of Staff, who can help me do some of the things that as a CEO I need to do: strategy, research, planning, and just someone who can help take the load off. That’s one hire that I made based on past lessons and that I’m thankful for. Another is a Finance and Operations Manager. Somebody who can be our office manager, but also close our books and help model different commercial opportunities. That’s something I’ve learned at my previous company – there’s so much work to be done around that stuff. It was I think the 2nd hire we made, and it’s just been tremendously helpful.

Tim, you’ve helped me think through some other staffing strategy. Especially with the Head of Partnerships role, which I think was a very clever hire. It was clear to me the work to be done, but it wasn’t clear to me how to manage it. Some early brainstorming sessions that I did with the Aequitas team really helped clarify the plan.

Tim: Thanks for the plug! Digital Therapeutics are pretty hot right now. What are you guys doing to bridge the mental gap on the consumer side, where traditionally some people view that the only way to get better is to take a pill?

Dan: I’m going to challenge this question a little bit. In the disease states that I know best – respiratory and IBD – patients really want to get better, and are very comfortable trying things other than traditional medication. Especially with IBD. IBD patients are desperate to get better, and they are trying anything they can to do it. But from both experiences – especially with IBD – the thing we hear the most is that patients want to feel in control of their disease. And a platform like Oshi helps them do that. Just giving them the tools to track what they’re doing helps them feel in control. So I argue that for users – for patients – if you apply good user-centric design and you listen to patients when building your platform, and you incorporate that feedback, patients will love what you’re offering. That’s been my experience at Cohero and at Oshi.

For me the challenge with digital health is not the patients, it’s the enterprise customers. Whether that’s an at-risk health system, or a payer who has a financial interest in better managing their patient populations with chronic disease – they’re the hardest to convince because you need to have the clinical evidence showing that your platform actually does improve outcomes. The only way to address that is to be a real, science-based therapeutic company, and that’s what we’re doing at Oshi. We have a Chief Medical Officer. Our platform is being used in a clinical study out of the University of Edinburgh. We’re also preparing to do a randomized control study, which shows that patients using Oshi have better outcomes, and hopefully reduced costs, and we’re going to publish that in a peer-reviewed journal. Then, we’re going to go after those tougher enterprise customers, with the data packet that you need – that’s the only way to convince them.

Tim: And I think you started to touch on it a little bit earlier, with respect to culture – what aspects of your culture are you looking to hold onto as you grow?

Dan: Startups are fun! It’s a very naturally motivating place to be. We are a small team where people can make a tangible impact on the creation of a company, and our entire mission is to improve the lives of people who really have it tough. So it’s a pretty easy place to get people motivated and excited to be, especially at the early stage where you’re creating.

So to answer your question, the aspects that I try to hold onto as we grow – the very first one is fun. I want people to enjoy coming to work, being with the people that we have here, and doing what we do. I want them to feel that there’s a purpose for what we’re doing, that we as a company have a meaningful objective, and that they have a place to make an impact on that objective. As CEO, I think if I do the hiring part of my job well, it makes the rest of my job easy. So I spend lots of time on hiring, and interviewing maybe more people than other people would. I like to ask people to do homework and do some real work, to see how we work together before making any final decisions.

Then, once the team is hired, I like to recognize people for the impact that they’re making. We actually have an employee of the month! When people do something big for Oshi, we recognize them publicly and put their picture on the wall.

Also, to help keep people inspired, I find it helpful to have them hear from the people we are focused on helping. We had a workshop last week where we sat all day learning from patients about the challenges of having IBD. Oshi shut down – everybody, all hands were there, with laptops closed. I wanted everybody there to hear from patients directly. And that got people really excited and motivated about what we’re doing at Oshi. And then we had a couple beers afterwards, which always helps.

Tim: Beyond that, what keeps you up at night?

Dan: I love being an entrepreneur – to me there’s nothing more exciting or fun, or that has the same potential for making an impact in a positive way. But the definition of entrepreneurship is that you’re operating in unknown territory with a limited amount of resources. I have a chart of our cash burn, and it ends at some point if we don’t get customers or if we don’t raise more money. So that keeps me up at night, just knowing that all these people’s jobs and our mission of creating something meaningful for lots of people… if we don’t play it right, we can miss out.

And I find that it gets harder and harder to sleep as you get closer and closer to success. It’s all just a big dream at that early stage of a startup – you’re just building something, and nobody expects you to really make it, since most startups fail. But as it gets more and more real, and you start having more and more success, and you get closer and closer to achieving your goal, for me that’s when it gets harder and harder to sleep, because that’s when there’s more to lose. The thing about entrepreneurship is, you never get to turn off. Even when you are not working, there’s always this voice in your head saying, “Is this the one hour when if you turned off the TV and sent one email, it will be the difference between being successful and not being successful?”

Tim: What else, if anything, do you want people to know about, in terms of how you guys should be thought of, jobs that you want to hire for, people you want to hear from, partners that you’re looking for…?

Dan: One thing we didn’t talk a ton about is, the real unique thing that we’re doing is collecting real-world evidence on a disease that is very personalized in nature. So kind of like Flatiron Health – they have a product that is useful – but their real value to the world is that they are collecting data about lots of different patients with cancer – which, like IBD, it’s becoming a very personalized thing, where you treat each individual’s cancer, not just cancer the disease. It’s a model that’s pretty new.

At Oshi, we’re collecting data that is directly reported from patients, to build the data set of real-world outcomes to learn how to personalize treatments. That means we partner with a couple different types of people. First are people who care about better managing IBD, so that’s pharmaceutical companies, that’s healthcare providers, that’s actually also OTC companies and nutrition companies. We also have a research mission, so we partner with companies who provide genetic sequencing, companies who do microbiome sequencing, and health insurers, and pharma companies, on the R&D side, because we have a unique data set that’s never existed before.

The current thinking with IBD is that it’s this complex relationship between a person’s genetic history, their lifestyle, what their diet is, their microbiome, maybe a certain event in their lives that impacted them. The best way to manage it is likely a combination of the food that you’re eating, the medication you’re on, the way you live your life, if you’re getting enough sleep, if you’re controlling your stress, etc. So it’s a particularly complex disease that needs information beyond what you get from a randomized controlled study of a pharmaceutical product.

Nobody’s going to do a large randomized controlled study for measuring how stress impacts patients because it costs millions of dollars to do that. And no one company benefits, so who can justify funding it? So there’s just a big gap in the research of understanding the lifestyle component.

We’re collecting that data set, based on real-world patient data, and also tying it to effectiveness of traditional medications. It’s a new paradigm that we believe will lead to a much better understanding of how to treat people with IBD, so that they experience a far better quality of life!

 

Big Problems, Even Bigger Opportunity: What Has to be Done About Post-Acute Care

By: Tim Gordon, Founder & Managing Partner

Perhaps no sector of healthcare is more rife with challenges and opportunities than long-term, post-acute care. The common denominator that one finds when examining the post-acute care landscape is inefficiency. Everywhere you look, things are being done like it’s the 1990s. Phone-tag with patients, faxes to suppliers, manual data entry… how much time and money, and how many positive outcomes for patients are drowning in this archaic system?

Substandard treatment and inadequate monitoring lead to operational delays, which results in huge numbers of adverse and temporary-harm events for patients – the majority of them preventable – according to a March 2014 Office of Inspector General report. The reality is, too many hospitals and emergency rooms treat discharged patients like they are out of the system; an approach that contributes to a revolving door of patient readmissions every single year, which is both damaging to patient health and costly for acute-care hospitals, which remain by far the most expensive site of care, at an average of $2,882 per day.

It’s time for a change.

To manage chronic care effectively, we need to start focusing on preventative strategies, utilizing technology to intervene at precise moments, and increasing patient and caregiver engagement. Fortunately, there is a ray of hope: Just as bright, talented entrepreneurs have disrupted a range of industries by exploiting gaps and plugging holes – so too is the post-acute care industry being transformed. As with all things healthcare, it just takes a little more time. But change is coming.
 

Inefficiencies in the Market

The success or failure of the post-acute care model hinges on the communication and coordination of the healthcare providers involved in the patient-transfer process. Unfortunately, the current system for patient-transfer leaves a lot to be desired. A January 2018 survey of 162 hospitals by HIMSS Media uncovered numerous gaps between hospitals and post-acute providers that result in operational and clinical inefficiencies. For example, only a quarter of hospitals are partnering with post-acute providers to track patient care, and more than half have no established processes to manage post-acute providers, or are uncertain if they do. For those with processes, just 7% make use of automated discharge or referral management software. According to the survey, 25% of hospitals still communicate manually (phone calls, faxes and paper documents). This is mind-boggling.

A manual approach to patient monitoring is both inefficient and expensive. Cloud-based communications portals, telemedicine services, automated discharge or referral management software, and partnerships with preferred post-acute providers will free up nurses’ time and enable them to focus on core activities, as well as provide a consistent flow of touch-points that engenders a deeper sense of comfort in patients. This creates a smoother, more efficient transition from acute to post-acute care. Additionally, patient outcomes are improved, which leads to lower costs in the long run. So integrating technology into the operational workflow of providers is a win-win across the board.

The good news is that some integration is already taking place. Acute and post-acute care providers are finding that technology which synchronizes patient data with care plans gives case managers roughly 50% of their day back, which leads to more time spent with patients and their families, and more bespoke care packages tailored to each patient’s specific needs. Additionally, more and more hospitals are taking the time to determine which of their post-acute care providers are leveraging technology to track and improve patient outcomes. By reviewing readmissions, hospitals and referring physicians are working with post-acute care facilities to figure out what works, what doesn’t, and what can and should be handled differently. Those are the types of conversations that need to be had if our post-acute care model is to evolve beyond its current limitations.

Another positive forward-looking indicator is the willingness of older generations to adopt modern technologies into their lifestyles. Boomers have proven especially adept at doing so, which implies there will be less friction when integrating technology into the next generation’s long-term care continuum. Of course, we still have a lot to accomplish on this front for the current generation of patients – the majority of whom are over 75 and suffer from multiple chronic conditions. Advanced technologies such as biometric remote monitoring and risk-assessment analytics can help predict which patients are at a higher risk of readmission, and which need greater post-discharge oversight. But these advanced tools – which rely on wearable or digital technology – are rendered useless if the patients themselves are incapable of incorporating them into their daily routines. It’s no use having an app that can predict a patient with a chronic hip condition’s risk of falling if that patient has a barrier to utilizing the app in the first place. The solution is to educate patients about new technologies with the same dedication and zeal that goes into educating them about drugs and medical procedures.
 

The Change-Makers

Fortunately, there are a host of companies and startups looking to address these gaps in the post-acute market. To attack the inefficiencies currently embedded in DME, Parachute Health built a platform that allows suppliers to receive clean documentation, as opposed to illegible and often inconsistent faxes, which can delay discharges and create unnecessary data entry tasks leading to operational backlogs. Parachute’s digital platform accelerates the discharge procedure by providing patient management tools, delivery status updates, and MD signature capture all in one easy-to-use interface. And their electronic messaging service means providers don’t have to worry about back-and-forth phone interactions. The end result? Recovering patients get the DME they need, when they need it – before they end up back in the hospital. Hey, it’s the 21st century – it’s time healthcare moved away from faxes and phones and joined the digital revolution. Thankfully companies like Parachute are making that happen.

Another company doing amazing things in this space is Friend Health. We interviewed Founder and CEO Coley Parry in the Q2 installment of our newsletter. Friend Health collaborates with healthcare partners to bring in-home care to some of the most at-risk patient populations via multi-disciplinary care teams and proprietary technology. Their system saves costs by treating patients in their lowest acuity setting – at home, where the vast majority of chronically ill patients prefer to be treated. And because they tailor their care plans to the individual patient, Friend can deliver better patient outcomes all while utilizing a more efficient deployment of resources; exactly the kind of disruptive innovation that the post-acute care space so desperately needs.

And no commentary on post-acute care innovation would be complete without mentioning the impact of telemedicine. Companies like TripleCare and Call9 offer preventative treatment right at patients’ bedsides, affording them quick and easy access to leading physicians and healthcare professionals. Needless to say, patient outcomes improve substantially, as TripleCare and Call9 physicians have treated thousands of conditions on-site, the former avoiding hospital admissions for over 80% of their patient populations, and the latter decreasing hospital visits by over 50% for SNF patients.
 

Challenges and Opportunities

While it’s true that the post-acute care industry faces numerous challenges, it’s also true that beneath every challenge lies an opportunity. Take regulatory uncertainty, for example, which is a core concern of industry participants. What will CMS reimburse for when it comes to Medicare and Medicaid, and how will those reimbursements inform investor decision-making?

If we step back a moment, regulatory uncertainty exists in any industry undergoing innovation. Why should healthcare be any different? Yes, it’s unnerving not knowing how the federal government will react, but the likelihood is that once the benefits to both patients and the country’s bottom line are accounted for, disruptive technologies will continue to be welcomed with open arms (of course, I’m no expert on government policy, so don’t hold me to that one).

Along that same line of thinking, here are some eye-opening stats that you may or may not already be aware of:

  • • 10,000 Baby Boomers reach age 65 every day, and that will continue for the next 19 years
  • • 49 times as many people reach age 85 now than did a century ago
  • • Medicare costs are forecast to increase to $1.087 billion in 2024, reflecting a compound annual growth rate of 6.1%
  • • Spending on Medicare beneficiaries in their last year of life accounts for roughly 25% of total Medicare spending on beneficiaries age 65 or older

Clearly the rise in elderly patient populations and life expectancy will contribute to increased healthcare challenges and put incredible strains on our overall health system, most especially in post-acute care. But let’s not forget all of the positive tailwinds our industry has at its back: the advent of disruptive technology, a tech-enabled patient population primed to take full advantage of that innovation, and ambitious healthcare entrepreneurs working tirelessly to connect the dots. With that foundation laid, we should be comforted in the knowledge that the future for post-acute care will be more efficient, less costly, and produce a greater degree of positive outcomes. It has to.

Cracking the Code: How Growth-Stage Companies Can Build Strong Cultural Foundations

By: Steven Berman & Nina Mermelstein

We’ve all heard the phrase ‘company culture’ a million times. We know what it means; or at least we think we know. But when something is repeated so often it can be tough to cut through the clutter, escape the platitudes, and unpack exactly what needs to get done and the roadmap for how to get there.

Here at Aequitas, we often partner with founders during their initial growth-stage, and at no point in a company’s lifecycle is the establishment of a strong cultural foundation more important. The values and principles that growth-stage startups adopt will inform their worldview and decision-making for years to come. And given how few employees there are, each new hire plays a vital role in shaping the culture of growth-stage companies; the #4 employee has a much greater impact on the long-term sustainability of company culture than the #40 employee does.

Because culture is so integral to the success of growth-stage companies, we thought we’d delve into what founders can do to create and nurture strong cultural foundations. Below is a three-step process for establishing a lasting cultural blueprint.
 

Define Your Culture

Part of the reason there’s so much confusion around what makes a strong company culture is that people are focused on the ‘what,’ as opposed to the ‘who.’ Company retreats, ping pong tables and team happy hours don’t define your culture – your people do. Events and office perks are mere facilitators. So it’s worth asking yourself: what exactly are you facilitating? What types of discussions and interactions are your teammates having? That is your company culture. Culture is people.

Some founders want a gritty, no-nonsense team that’s all about rolling up their sleeves and tackling problems day-in and day-out. Others prefer a more creative dynamic team, where teammates are encouraged to think high-level and question every directive before its implementation. The culture you want to build will unearth itself in the people you hire. They are the ones who will embody your company’s perspective and worldview. Ping pong is just a way for them to let off steam.

Along those same lines, there are some who view culture as a measure of output: if the team is producing at a high-level, that implies the culture must be strong. Others, however, believe that culture is not directly linked to on-the-job performance; rather it is about the values and principles that the company espouses. This type of culture doesn’t directly inform an employee’s everyday performance. Instead, it manifests itself through a zeitgeist – or collective spirit – which transforms into a million-and-one decisions that are made at both a macro and micro-level going forward. If the first type of culture implies focusing on output, such as counting the number of trees you plant, then the second type means landscaping a forest and creating space for the trees to grow.

There is no right or wrong approach to crystalizing a strong culture – the key is to be honest with yourself about who you are as a leader and the type of work environment you’re trying to build, in order to encapsulate your company’s mission. Just remember that talk is cheap, and you must embody the culture you want to create – for nothing is more discouraging to teammates than a ‘do as I say, not as I do’ leadership style.
 

Identify and Attract the Right Team

When it comes to team-building, founders often focus on finding the best and brightest – and with good reason. But there are plenty of ‘best and brightest’ candidates out there. The real question is, which one will be the best fit for your company?

Anyone can read a resume. The trick to finding the right cultural fit is reading the person instead (i.e. understanding your candidates’ goals and what truly motivates them). That means reading between the lines via ‘active listening.’ Active listening implies paying attention to how candidates speak in addition to what they say. Do they speak in lists or are their thoughts more fluid? Do they tend towards the extreme with superlatives or are they comfortable with gray matter? When it’s their turn to ask you questions, pay attention to the types of questions they come up with – are they about product or process? Are they thoughtful? Were they listening, or were their questions canned?

Your goal as an interviewer should be to seek out authenticity above all else; to untangle the real from the artificial. Remember, those first few hires will inform your culture more than any others you make down the road, so it’s important to spend the time now to get it right (for more on the value of formulating a plan before taking action, see our 1Q18 article, ‘Getting Your Ducks in a Row: The Importance of Planning Before Hiring’).
 

Establish a Solid Foundation

A recent Harvard Business School study illustrates the importance of establishing a strong culture early. The study, which analyzed over 100 early-stage startups, found that employee happiness actually drops more dramatically at faster growing startups. Startups with 20-200% annual revenue growth over their first six years reported a much steeper decline in their employees’ overall happiness levels than startups with 0-20% annual revenue growth. The reason is that the faster growing startups were so focused on rapid growth that they neglected to establish a strong cultural infrastructure. So when the company faced challenges later in its life (typically years 3-4), the problems were exacerbated by the absence of a strong cultural foundation.

In effect, the fast-growing startups sacrificed the important for the urgent; they focused on the ‘what’ and the ‘how’ of their business, at the expense of the ‘who.’ This approach has its consequences, as the absence of a strong cultural foundation often leads to voluntary attrition by employees. The same study uncovered that founders who rate the importance of culture lower than 10 on a scale of 1-10 are 70% more likely to have high employee turnover rates than those who rank culture a 10 out of 10. Employee turnover is challenging for any business, but especially so for a growth-stage startup, which lacks the infrastructure needed to overcome the loss of a core executive. Think of investment in culture as an insurance premium against unplanned employee attrition.

When founders begin the sales and marketing phase, they often speak of early adopters. A different approach is utilized when engaging this demographic, since they are the ones willing to take a gamble on your untested product or service. Well, the same should be true for employees – the only difference is that instead of selling them on your product, you’re selling them on your vision. These folks are the early adopters of your company culture, so it’s necessary to treat them with the same patience, care and gratitude that you would an early adopter of your product or service. And just like early-adopting customers, the first employees you bring on will become advocates for your brand, spreading the gospel to future candidates, and by extension making your job of attracting the best and brightest that much easier (for more on the added benefits of a strong interview process, see our 2Q18 article, ‘Designing the Candidate Experience: An Exercise in Brand Stewardship’).
 

Focus on What’s Important

Healthcare is an industry built on empathy; helping others is at the very core of who we are and what we do. Virtually all of the CEOs, entrepreneurs, executives and employees we have engaged with are motivated by that same noble mission. So let’s leverage those common principles as we build and grow our businesses. Connect with candidates by expressing your passion and motivations, and ask current and future employees for the same in return. What may seem like a tenuous aspiration – the development of a ‘strong company culture’ – can in fact be achieved by the simple act of elevating people above process, and sharing your vision with your future teammates. After all, Culture is People.

An Interview With David Gelbard, Founder & CEO of Parachute Health

David Gelbard is the Founder and CEO of Parachute Health, a New York City based healthcare technology company aiming to digitize the post-acute durable medical equipment (DME) space. They recently raised a fresh round of funding, led by Insight Venture Partners, and we sat down with David to talk about his efforts to drag healthcare kicking and screaming into the 21st Century.

Tim: Like many founders in Healthcare, your entrepreneurial story begins with a personal one, so why don’t you tell us a little bit about why you started Parachute in the first place?

David: About 4 years ago, my dad, when he was 78, ended up going to the hospital for life-saving spinal surgery. The surgery was a success and it was a really wonderful day. Unfortunately, upon arriving home the walker that was supposed to arrive never got there. The hospital sent the order across via fax to the equipment supplier and it never actually got to the house. My father ended up falling; 4 years later he still goes to rehab because of the fall, still trying to fix what’s going on, but it’s just like… when you call back into the hospital and ask them why they screwed up, they just say, “well we faxed it.” For something like an oxygen tank, a walker, a wheelchair – things that you need for day-to-day living – it’s just insane to think we’re still using methods of communication like a fax machine in 2018.

At that moment I just felt that it was such an awful thing, an emotional rollercoaster for me and my family. I had a friend’s wedding that weekend that I didn’t go to – my sister had told me it may be the last weekend with our dad. And for him to get through surgery and then fall, it put a bad spin on such a wonderful thing that he had made it through.

So the company was created to make sure that this never happens again, to any family. The concept of a more efficient means of ordering DME – it’s just a no-brainer – it should happen. It’s a real problem that needs to get fixed.

Tim: So as you dug a little bit deeper into this space, what surprised you the most?

David: Two things shocked me: One is that other critical services use the fax too! Home care, ambulance, nursing home, orthotic, wound care – you name it, the fax machine is involved. It’s not just our special corner of the universe. It’s all of the things that get ordered from facility to facility or outside the four walls of a hospital, and that was pretty mind-blowing.

The second thing is this idea of insurance documentation; that today, to get something covered by an insurance company, you have to memorize as a social worker or a nurse or physical therapist tens of thousands of products, for hundreds of insurance plans, for twenty thousand different ICD10 codes, for multiple zip codes. These unique 5-10-20 questions count as the criteria to get things covered and no one knows them! The whole idea that when you use your insurance card, that you feel incompetent – that you don’t even know if you’re covered or not – it’s just something that’s out the door. There’s such distrust, or lack of confidence in the insurance card. That to me was really something – just how global of a problem that is; the level of communication across healthcare – that’s obviously a few things, but… healthcare I think is in the early innings of where it needs to be, in terms of technology and building out an infrastructure. I really think we’re in the first inning of a major healthcare transformation. The things that you think should happen – like not having a fax machine, are still the modus operandi of healthcare.

Tim: It is mind-boggling, if you think about it. No other industry that’s critical to the health and well-being of every person on the planet does stuff this archaically. It’s a little goofy.

David: To use one analogy: imagine going to a restaurant, giving someone your credit card, and then they fax the bank waiting for a response before they serve you. You’re ordering food there. In this case, you’re ordering an oxygen tank so you can breathe.

Tim: The other thing too, is that this space you’re in is fragmented. There’s widely varying degrees of sophistication in the buyers of a platform like Parachute. So how do you get them to think differently about such ingrained ways of doing things?

David: At the end of the day, we have all different users that have all different levels of technology expertise. The key thing to always keep in mind is that these are people, and people are nervous about change. As long as you’re able to understand what their concerns are and bring them up the curve in a way that they want – in an easy way – then at the end of the day, our company, is going to be successful.

So how do we handle that fragmentation? First: One is how you comfort users through the change process. Healthcare rapidly changing is scary and hard.

The second bit is how you deal with the fragmentation in the types of buyers… it has to do with building a product that’s seamless, so that someone that has no sophistication, and someone that has a ton of sophistication can utilize it all the same. The Apple iPhone did that. Whether you’re someone who picks up an iPhone for the first time, or an avid tech user, you can use an iPhone. You just make things so simple, and have such good service, that people don’t even notice the change. They just say, ‘Wow, that was a much easier way of doing it than before.’ I think the problem that many people have is that they don’t know how to simplify the complexity. Healthcare for sure is complicated, but if you figure out a way to simplify things in a way that is understandable and digestible, then you handle the fragmentation by having a product that’s good enough that other people will tell everyone else about it. Then you don’t have to go from door-to-door when other people are sharing their positive experiences with others. I think getting to a place of durability only comes when a user has a really amazing experience.

Tim: At this point you’ve raised a couple of rounds of funding. What are your biggest takeaways with respect to the funding environment, in Healthcare Tech specifically, and how investors’ expectations maybe have changed in the subsequent rounds that you’ve raised?

David: I think the funding environment right now is still pretty positive. I think it’s changed a bit where there’s been more of a migration towards sound business models, real traction, big markets, and more of the fundamentals of what makes a great business, as opposed to an idea that fits into a market that people want to go after. I think there has to be a little more demonstrable traction to be able to get investors today versus, say a couple of years ago, when you could have any idea, and whether you showed execution or not, there was so much capital chasing few ideas that you’d end up raising from somewhere. I do think that the market still has a lot of capital to deploy, but my perception is that investors are becoming a little more focused on business models that have a lot of viability and traction.

The second thing I’d say is that healthcare as a specific vertical is quite different than others. It moves at a somewhat slower pace, and people are a lot more risk-averse about trying new tech, right? Because at the end of the day, if the tech fails, it might mean a patient’s life. So the level of anxiety is just a lot higher than other markets.

I think that the upside is there, but what probably happened over the past few years is that people just didn’t see the traction they were expecting, because either there wasn’t a realization of the sales cycle, or they weren’t building something that was really a product. And most technology we’re finding in healthcare is adding time to someone’s day, and no one has time for another technology tool. The thing about Parachute is, we’re replacing someone’s fax machine. So what takes an hour right now using outdated legacy technology takes a minute or two on our platform. We’re actually giving someone back an hour a day. Very few technology platforms in healthcare are actually built for speed and for getting things done in a more efficient way, but we are. And I think that’s why we were able to see success through the fundraising process, because the business model is sound, the team surrounding it understands healthcare and is really strong. And you know, we’re solving a real pain-point.

Tim: You just mentioned your team, which has been growing rapidly, with a lot of your funding going to building a great organization. Along the way, how do you think about company culture – what is yours, and how do you make sure that you consistently hire for it as you continue to grow?

David: The one thing out of the gate that we are steadfast on is a mission-oriented culture. People who care about others. At the end of the day, we’re helping people, and you want people who aren’t just looking for their next stop or a fast-growing startup. You want people who care. Every fax machine we get rid of, is people we’re helping. That’s something that most of the people we’ve been able to attract have felt in their core. And to me that’s the start – you want to build something bigger than yourself. You get one life, and you want to have a business that actually helps people. There’s an element of ‘it feels good, and you can make money.’ Those values matter, you know?

The second thing we look for, is people who are incredibly confident, and know how to work hard. What we’ve done really well at, is finding people who are scrappy enough to get things done, but are strategic enough and thoughtful enough to think through problems. So they’re not just patching things together to get it out the door, but they’re thinking of the long-term trajectory for the business, how to fit things in, and you wind up getting a lot of people internally who punch above their weight class and collaborate really well together.

The third thing, to me, is that someone has really impeccable communication skills. As the team scales, there has to be an element of information flow across the business, and we’ve found a lot of great success in people who are strong communicators, to our partners, to our investors, to internal teammates. And that’s been able to elevate us quickly. Great communication is a core value of the culture.

The last thing I’d say is that something we push internally is to constantly innovate and push new ideas. So there’s something you see across management teams is that they’re incredibly passionate about getting to the right answers. Digging up ideas, innovating, and not just devolving into group-think is always a big thing. Someone who speaks through problems and is logical in a coherent way. So people can beat up the line of traditional thinking and get to the right answer. And having an honest, open space – a protected space – so people can critique their ideas and not feel judged, but rather feel supported and challenged. I started thinking about our culture in team meetings – people who like working with us are people who like having an idea, aren’t stubborn enough to say that’s my idea and that’s why it’s right… but who say this is my idea, this is why, and get engaged enough to get to a thought-provoking answer. There’s not always a right answer – but many times there is. And I think we’ve fostered a culture that never just says ‘yeah that’s good thank you,’ right? If it’s the right answer, sure. But many times it requires teamwork. There’s no one person who creates Parachute, it’s a team. That’s one thing we harp on internally – it’s never about one person, it’s the team collaboratively.

Tim: So what keeps you up at night?

David: The thing that keeps me up at night is the level of opportunity right now in Healthcare Tech. You can look across the market and see all these opportunities. Obviously that’s a positive. The negative is that that’s a distraction. You see all these opportunities, and the key thing to remember is that not staying focused is an Achilles heel of almost every early-stage company. Because there are only so many people on your team who are only capable of so much, even at 100% capacity or 120% capacity…. And anyone’s eyes looking at this market have got to be bigger than the capacity of their team, especially as an early-stage company. That’s the way I feel. So remaining focused while putting opportunities on the back-burner is one of the hardest challenges – and what keeps me up – because you see an opportunity and you want to attack it. However, often times it’ll wind up being the downfall if you push forward with it.

The other thing that keeps me up is continually attracting great people. We have such a phenomenal culture – we have smart, caring, thoughtful people internally. It’s just about being super-focused on that inner core of people. At the end of the day, yeah it’s a great business model and a great market, but if you don’t have those people internally to get together as a team and go attack it, it’ll never work. So, we have to have such a focus on people, and making sure everyone internally who comes in, they feel good, they get integrated well, and they continually grow inside the organization as well.

Tim: Everyone is talking about value-based care. And to a certain degree every new healthcare organization is trying to figure out how to live in that world. So how do you see Parachute helping its partners achieve their value-based care goals?

David: Value-based care if you simplify it, just means getting closer and closer to a fixed-revenue target, and if an outcome doesn’t work out well, you have incremental costs. What’s happened is that healthcare more and more isn’t just ‘let me bring someone to my hospital or nursing home and do as much as I can for them and not keep costs in mind.’ So how is Parachute impacting that? Right now when someone leaves the hospital, there is next-to-no visibility when it comes to medical equipment. No one knows if they got their oxygen tank, no one knows if they got their wheelchair or walker. And it turns out, 15% of the time, wheelchairs, walkers or oxygen tanks either never get to the patient or get there later than anticipated. And it creates a 60% increase in readmissions, which is a staggering statistic. Until value-based care, Parachute never mattered. Once you discharged someone, it was ‘best of luck to you.’ But in today’s world, value-based care needs Parachute, and obviously vice versa. Because if you want to make sure that someone you’ve discharged has an oxygen tank to breathe, or has a walker to get to the bathroom or go to the kitchen, then at the end of the day we fit squarely into the new paradigm of healthcare, which is ‘we have to take care of the patient outside your four walls, and cost is a consideration.’ You choose how that impacts their care, or the supplier you’re choosing to work with. All that data, all that reporting that flows back in through Parachute is critical to making decisions on who should be in your network and who’s taking care of your patients in the most optimal way.

Tim: What would you want to leave readers with, knowing that this is a pretty diverse cross-section of folks in our industry – investors, entrepreneurs, people within all functional levels of an organization, and even potential future Parachute employees?

David: If you’re looking to be part of a company where you have a ton of autonomy, working on real problems in Healthcare, and working with a team of people that are exceptional, and are truly mission-oriented and have a wonderful way about them – then I think Parachute is a great partner. Every day that we grow and are moving forward, real people’s lives are being impacted for the better. There are very few times you have that immediate gratification, but when you help educate someone in healthcare on technology, when you help someone’s mom or dad who’s a patient get what they need on time and it saves their life, there’s few things that can get you so excited when you wake up in the morning. And when you’re surrounded by great people, there’s nothing better. One of the things I’m most proud of is the people we bring to the table, and that we’re really solving things for people’s families. That was definitely one of the intents of the business when I first started, and I can definitely say that the core of that rings true today.

 

Designing The Candidate Experience: An Exercise in Brand Stewardship

Walk into any Apple Store on the planet, and you’ll receive an immersive customer experience. The sleek layout, meticulous design, and seamless end-to-end experience all serve to generate positive associations in the minds of customers. The end result is that even if you don’t buy anything on a trip to the Apple Store, you end up leaving with a distinct, lasting impression of the Apple brand.

That’s exactly how companies should be designing their candidate experience – with the candidate in mind. Yes, the main goal of a hiring process is to identify and attract the best candidates, but that doesn’t mean we should overlook other opportunities therein, namely brand advocacy. You’re often providing a first glimpse of your company (especially for startups) to every single person who walks through your doors. Think of your candidate experience as an experiential marketing opportunity, not just for future employees, but for all of those industry professionals who you don’t end up hiring. Every company should ask themselves: what lasting impression are we leaving on each individual we interact with?

I was given a stark reminder of the role consumer experience plays in decision making recently, when inside of the same week I had two remarkably different customer experiences. One with AT&T, and the other with Handy. AT&T knocked it out of the park and the other service provider nearly drove me to create a Yelp account just to save others from the misery. The candidate experience is no different, and for me it highlighted our propensity to be more vocal about negative experiences.

A seamless candidate experience doesn’t happen by accident. It takes planning, process and communication, all of which can be achieved by following a set of simple guidelines. While there isn’t a one-size-fits-all structure to interviewing candidates, there exist a clear set of parameters that will help you establish an interview process that not only identifies the best and brightest, but also leaves a positive lasting image in each candidate’s mind.

Failing to Prepare is Preparing to Fail

The first step in any success story involves preparation. To that end, it’s important to establish a clear line of sight between now and your hiring decision. That means the establishment of a process, and – just as crucially – the communication of that process to all key members of your organization. If it’s feasible, start by securing an applicant tracking system that your interviewers and HR personnel can utilize. Greenhouse, Jazz and Thrive are all solid examples. If you’re bootstrapping, even a simple Excel sheet can work wonders. As long as you have a unified system to manage communication, you’re good to go. That way, everyone internally participating in the process is quite literally on the same page. The infrastructure helps facilitate the process. For more on the importance of the planning and communication phase, check out this article in our Q1 newsletter.

It’s important to keep in mind that all of that planning is useless if there isn’t accountability over the process and strong communication internally and externally. That means that someone – the CEO, a hiring manager, an internal or external recruiter – needs to be on top of scheduling interviews, knowing where candidates should be heading and whom they’re meeting with, at what stage of the process each candidate is in, and following up with candidates for interview feedback and next steps. Without proper oversight, the execution of your process is likely to go haywire. It’s a big, important job and someone has to own it.
And communication is key; not just between firm and candidates, but internally. Whoever maintains process accountability needs to ensure that all of the key decision makers are on board, so there aren’t any miscommunications as we delve deeper into the hiring funnel. That’s why we recommend bringing on an internal recruiter much sooner in the process than companies typically think is necessary – the benefits of that specialized expertise far outweigh the upfront costs. For more on the advantages of hiring an internal recruiter, we riffed on it in this article last year.

The How & The Why

So you’ve acquired the right infrastructure, dedicated yourself to a process, and assigned accountability; the next obvious question is: what should that process be? The answer is whatever most suits your needs, style, and company culture. I wish I could tell you there’s a boilerplate approach here, but the truth is, the right process is bespoke to each organization.

The key to a successful process is maintaining a thoughtful chronology of events that isn’t overly burdensome to the candidate, but still gets you the conviction you need. Our clients often start with a phone interview, followed by an in-person meeting, and for those who make the cut – a follow-up with the rest of the team. It’s advisable to limit your broader team’s exposure to only your select finalists, saving substantial man-hours and focusing them on the bottom of your funnel.

Firms with a more sizable Executive Team might opt for select candidates to meet with a handful of key personnel – say 5 interviews conducted by 5 different team members. In this context, we highly recommend a clear delegation for each interviewer – i.e. someone interviews for career transitions, someone else for culture, a third for core competencies, a fourth for soft skills, etc. The reason is twofold: first, you’re affording your interview team a level of depth within each area of assessment, as opposed to having one or two people broadly cover a candidate’s entire profile. So when you circle up to discuss, each of your team members can enlighten the group on one core aspect, leaving you with a holistic picture of the candidate, containing both breadth and depth. But the other reason for interview differentiation is even more important, and directly impacts the candidate experience: you want to keep the interviews interesting for the candidate. It’s counterproductive for a prospective employee – and brand advocate – to have to repeat the same basic facts over and over and over again. There’s nothing more exhausting than having to repeat that ‘overcoming an obstacle’ story 5 different times. That type of experience suggests to the candidate that internal communication is unstructured and the process wasn’t thoughtful. You’re jumbled and disorganized. And if this is how the interview process goes, I can only imagine what it’s like to work here…

Don’t let that thought creep in. The candidate experience is the first glimpse your future employees – and possibly the only glimpse those you don’t hire – will have of your company. So ensure that your process is both challenging and additive throughout. Keep your candidates on their toes by having them discuss various aspects of themselves in each interview – as opposed to the same stuff over and over again. That will leave them with a positive first impression of your company, and we all know how important first impressions are.

The Building Block of Every Relationship

Now we reach the end result of all of that preparation: Communication. Herein lies the key to the entire candidate experience. Communication will make or break your company’s image in a candidate’s mind.

Employers tend to forget that the hiring process is a two-way street. It’s not just the candidate who needs to put their best foot forward, companies do as well. After all, the truly special candidates are likely interviewing you as well, since they’re probably in high demand. Which means you’re in competition here, not just the candidates. And the surest way to promote yourself (without sounding like a used car salesman) is by communicating your hiring process clearly and effectively right from the start. That means laying out each step – from initial screening to final decision – and ensuring that each prospective candidate knows exactly what’s coming. Ever notice that a drive feels shorter when you have great directions? Yeah, it’s like that.

Why is communication so important? Put yourself in a candidate’s shoes (you likely have been in their shoes at one point or another) – you’re actively or passively considering a career change. You’re sending out resumes, speaking with recruiters, researching companies and reaching out to folks on LinkedIn. The entire process is a grind. And when you do finally land that interview you’ve been gunning for, you’re excited and nervous all at once. This could be your future, right here. The first day of the rest of your life (for better or worse). You’ve got a million things to prepare – stories to tell, resume bullets to explain, references to consider – so as you first step through that company’s doors, the one thing you’d like more than anything is visibility; someone to guide you through the process from start to finish. Applying for a job can feel like running through a maze while blindfolded – you aren’t familiar with this place, you don’t know any of these people. So having someone offer you a GPS is, in a very real sense, a lifesaver. Now you can focus on the things you came here to focus on: sharing your story, skill sets and experience, and deciding if this job is the right fit for you.

Communication builds trust – any relationship expert will tell you that. Showing candidates what life will be like at your company, walking them through the structure and explaining the thought process behind that structure helps establish the kind of foundations that long-lasting relationships are built on. And as important as maintaining strong communication is for the candidates you do hire, it’s equally, if not more important for the candidates whom you don’t move forward with. The reason is simple: you’re going to be rejecting more people than you accept. For every one person you bring on, there will easily be 10 or 20 or 100 who don’t get the job. The individual who gets the job will of course be an advocate and evangelist for your brand, but what about all of those people who walk away empty handed? Will they advocate for your company on Glassdoor and with colleagues? Will they talk about the positive experience they had interviewing, the structured process, the deep level of communication, and how they wish they’d gotten a chance to work at that highly efficient company that seemed to be firing on all cylinders? Disconnecting gracefully, with clear and effective communication, is a great way to increase brand advocacy in the long run.

Everyone’s a Critic

Thanks to the internet, there exist endless forums and mechanisms for people to share their thoughts and feelings on any subject imaginable – including a firm’s hiring process. That means disgruntled candidates can leave black marks all over LinkedIn or Glassdoor (“They rescheduled the interview 3 times…” “The interviewer was totally unprepared – hadn’t even looked at my resume…” “It was 6 weeks before I heard back!”). Of course, the opposite is also true; candidates with positive experiences can turn into fierce advocates of your brand – even those who don’t receive an offer. Effective planning, a thoughtful process, and open and honest communication will foster less of the former and more of the latter. The key is designing the candidate experience with the candidate in mind.

Primary Care: Rebuilding the Gateway to Our Healthcare System

The healthcare ecosystem has been experiencing a seismic shift. From companies like Boulder Care who are facilitating innovative treatment strategies for those affected by the opioid crisis, to startups like Robin Care who are changing the face of cancer patient advocacy, it seems that every healthcare institution is being transformed by “disruptive innovation.” The challenge is in bringing change to parts of the care continuum that are trapped in a cycle of misaligned incentives. Our nation’s primary care model is antiquated and broken. Doctors are incentivized to see the maximum number of patients possible, which translates into less quality per patient interaction. A volume-based system leads to fewer questions, more standardization, and less depth of care, which in turn leads to worse outcomes for patients, and helps fuel a bloated and costly system. As the gateway to our healthcare system, we are missing a tremendous opportunity for impact with primary care.

A few years back, I experienced firsthand how our broken primary care model can lead to a dramatic negative outcome, and how as the patient – however “informed” we may be – we often base the quality of our experience on the wrong things. In 2013, my sleep health began to decline dramatically. I was getting a couple of hours each night, if that – not quite full-blown insomnia, but pretty damn close. It went on for close to two years. To this day, I don’t know the root cause.
There was plenty going on in my life at the time, so stress is a likely factor, though it’s possible there were others. To me, the best way to describe it was feeling like my body was out of balance.

I did all of the things they tell you to do when you can’t sleep: I stopped watching TV in bed, kept the phone away from my face before sleep, didn’t eat too close to bed time, cut back on the booze. I took the basic over-the-counter stuff – CVS Sleep Aid, Nyquil, Melatonin – sometimes it worked, most of the time it didn’t. Soon my lack of sleep began to impact my work. I was groggy, out of it, not firing on all cylinders. I didn’t want to over-caffeinate or else I’d be up all night, so I started to feel utterly helpless. I was trapped.

One day at the end of 2013, I visited my primary care doctor for an annual physical. He ran a standard EKG test and did some routine blood work. There was no talk of sleep, since this was just before the value of sleep really permeated the public consciousness. No one was talking about sleep back then, so my doctor just asked basic questions about my diet and exercise. He didn’t delve into any detail regarding my lifestyle – how could he? We had about 7 minutes together.
7 minutes doesn’t leave you much time for a deep-dive Q&A. Thing is, if you asked me if I liked my PCP, my answer would have been a resounding yes. He scheduled appointments on short notice, rarely kept me waiting, would communicate with me via email, wrote a script without requiring a visit, and was pleasant to meet with. Cool stuff? Sure. Right criteria to judge him on solely? Probably not.

In my mind, the only real by-product of my lack of sleep was being tired and not as sharp. My blood work came back, and a bunch of stuff that was green the year before had turned yellow or red, so I could tell I was trending in the wrong direction. I was on a path to pre-diabetes. My doctor’s advice was to eat better and lay off the booze, which is exactly what I did. My plan was to tough it out. After all, I was young, energetic (sorta), in otherwise excellent physical (sorta) and mental condition – so I decided to white knuckle my way through the problem until it subsided and I was back to getting 6-8 hours a night.

Little did I know that if I didn’t change something drastically – and soon – I was about to be in serious trouble.

A few months later, I had lunch with a friend of mine who was the CEO of a population health management company, specifically focused on sleep disorders. He began talking about lack of sleep, and what a problem that is for society. He explained how a lack of sleep has a cascading effect on people’s health and leads to all sorts of co-morbidities, some very serious – even fatal. My jaw hit the floor. I could almost feel the light bulb go off: he was talking about me! That cascading effect, all of those co-morbidities he was describing… that was reflected in my blood work. Finally the dots connected.

During that same time, I had a friend – Alex – who was battling cancer (you can read Alex’s story here). Alex happened to mention an acupuncturist whom he was seeing to alleviate some of the effects of his chemo. After my conversation with the guy running that sleep health company, I knew I had to do something, so I visited Alex’s doc. That decision saved my life. Within a month of weekly acupuncture treatments, I was sleeping through the night 5 nights a week. Within 3 months, my sleep patterns returned to normal. My annual physical was right around the corner, and when my blood work came back, everything was back to normal. And no other variable changed during that time frame – I was eating, drinking, working, exercising and socializing the exact same amount.

When I think back on my ‘years of no sleep,’ I reflect on how fortunate I am. As an educated adult in the healthcare industry, I was entirely ignorant about the effect of sleep on my overall health, yet I had access to people like Alex and others who through their wisdom and expertise could alter my perspective in a single conversation. Imagine if I hadn’t been so lucky. Imagine if I didn’t have access to the same network. Would I have made the necessary changes? What if I couldn’t have afforded those acupuncture treatments? I would have likely ended up with Type-2 Diabetes, which not only affects me personally, but impacts all of society by instantly converting me from a profitable member of a health plan into a costly one. Who knows how many millions of chronic conditions can be averted through enhanced primary care interactions? Is it unreasonable to think that if I had had 30 or 45 minutes with my primary doc, we might have gotten to the bottom of things sooner? Nevermind this doozy from CNN recently…

The problem is, our primary care model is not designed to solve these kinds of problems in its current form. The structure is built for revenue generation, not disease prevention. We need to figure out how to incentivize doctors away from a higher volume of patients, and towards a higher quality of care. There are already a number of companies looking to do just that by coupling standard primary care with intensive preventative care solutions aimed at halting or even reversing the effects of chronic disease. Companies like CareMore, Iora Health and Aledade are utilizing technology and data analytics to organize their practices around patient populations requiring similar types of care. That helps reduce ER visits and unplanned hospitalizations while improving the overall quality of care.

Startups like Eden Health are taking that model one step further by unifying private doctor visits, 24/7 telemedicine, and insurance navigation into a single mobile platform. The result is that undiagnosed conditions are suddenly being discovered and treated. “One patient was bounced around for almost a decade with seasonal effective disorder,” says Matt McCambridge, Eden’s CEO. “It was absolutely a deficiency related to their vitamins. They [the patient’s primary care providers] were saying it’s not really anything, but we spent the time to figure it out. If you have 40 minutes, you can move past the simple stuff to the things that people don’t really feel comfortable talking about.” McCambridge highlights his firm’s infusion of technology as a key differentiator between Eden Health and the standard primary care model. “When a patient signs up with us, we see their medication history immediately. We have a back-end that pulls all of that info, so we have more data on patients than other providers do. The stuff you talk about with a PCMH, it can be put into practice in a more reasonable way when you have access to data. A lot of things aren’t purpose-built for primary care providers.

And therein lies the rub. The primary care model in its current form just isn’t cut out to handle the complex systemic and operational flow of the doctor-patient relationship. The model is built for speed, not depth. What good is blood work done after the primary care visit with no follow up? Thankfully, companies like Eden Health are taking the wheel and steering a new course, aiming to solve for these variables with innovative technology and aligned incentives.
Unfortunately, the deficiencies embedded in our primary care structure are far too sweeping and entrenched for a silver bullet to fix them. It’s going to take significant cross-industry collaboration and empowering primary care providers to truly provide preventative care.

Primary care is the gateway to our entire healthcare system. Optimize the gateway, and you optimize the entire funnel beyond. That gateway represents an opportunity to legitimately alter someone’s lifetime health trajectory – for the good or the bad – but it’s unrealistic to expect any kind of impact in an appointment that lasts a matter of minutes. Real change is out there, it’s only a matter of time.

By: Tim Gordon, Founder & Managing Partner