Introducing Suntra Modern Recovery

Thumbs up for Suntra Modern Recovery Launch

I’m excited to announce the “official” launch of our new venture, Suntra Modern Recovery (, a personalized recovery solution for people dealing with substance use disorders featuring expert medical doctors, home-based and virtual visits, and research-proven recovery medications.

Full launch blog post here:

Introducing Suntra Modern Recovery

Please let us know if there’s anything we can do to help you or someone you love.




Blueprint Health Winter 2016 Demo Day

We had a blast at Demo Day for the Blueprint Health Winter 2016 accelerator class, with strong presentations from our 10 companies and great support from the Blueprint Health community in attendance.

Below are my introductory comments for the day, with the theme of “Interesting Times” as they apply to the health care industry and more broadly to our world today.

Something Big Is Happening Here – Part 2

Slightly less than three years ago I wrote a blog post titled “Blueprint Health Launch Party – Something Big Is Happening Here”, which chronicled the launch of Blueprint Health’s first class and highlighted the growth of the digital health industry in New York City. In that post I made the following prescient comment:

“On a final note, it was hard to watch the NYC internet boom of the late 90s pass me by as I was working as a medical resident at Columbia Presbyterian, and I always felt like I missed something big. I have the feeling now that something REALLY BIG is happening in the healthtech space in general, and in NYC in particular, and I consider myself to be fortunate to be right in the middle of it. Don’t know where this is all heading but looking forward to an exciting journey.”

Well, three years later it turns out that healthtech (now more often referred to as “digital health”) continues to boom (more on that below) and my journey has taken me to an unexpected place. I’m happy to announce that I’ve officially joined the Blueprint Health team as of December 1st as Executive Director in charge of the Accelerator program. In my role I’ll be leading the effort to find great startups, run our 12-week program, and support Blueprint portfolio companies as they improve health care for all.

While I am technically new to the Blueprint team, I have a long history with Brad and Mat.  I (along with the members of Health 2.0’s NYC team) was the first co-tenant at the Loft and remember when much of the space was off-limits in the early days (and for good reason!). Over the last three years I’ve mentored and advised many of the companies coming through the Accelerator program and have developed personal relationships with many of the founders. While at Health 2.0 I also worked with the Blueprint team on a number of important projects (such as Pilot Health Tech NYC) that have helped grow the digital health ecosystem in New York and beyond.

What’s Happened In The Last Three Years

Back in January 2012 it FELT like something big was happening, and as we close out 2014 the evidence shows that something big IS INDEED happening in the digital health space. Since my blog post we’ve seen investment in the space take off, with growth increasing every month, including $2.3 billion in venture investments alone in just the first half of 2014 (see graph below). In addition to increasing investment in the space, we’ve also seen digital health startups gaining traction in the market, as providers, payors, pharmas, and employers (helped greatly through relationships offered by organizations like Blueprint Health) seek out digital health solutions that can address pressing business concerns.  Finally, investment in the space and growing market traction has increasingly been rewarded by meaningful exits, with digital health M&A activity on pace to break records in 2014 (see graph below).


Rock Health 2014 Mid Year Funding Report

Rock Health 2014 Mid Year Funding Report


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CB Insights Digital Health Investment and Exit Report


Blueprint has also grown significantly since that fateful launch day three years ago. We’ve graduated six Accelerator classes to date, with a seventh class getting ready to go in the next few weeks. In total, we’ve helped accelerate the growth of 53 companies addressing a broad range of health problems including medication adherence, specialist referrals, hospital purchasing, and care transitions, among others. Of those 53 companies, 85% are still in operation and, of those, 85% are generating revenue, a sign that our efforts have create sustainable value.

What Interests Me

One of the things I’m most excited about is the chance to explore digital health innovation broadly, working with many exciting companies and entrepreneurs. Some of the things I’m really interested in are:

  • Delivery Innovation
    • Health care has largely been delivered in the same way for decades and I think there are many opportunities to rethink how providers and patients interact using new technologies. I think communication, information, and automation technologies, applied properly, can dramatically reduce the cost of care, improve the patient experience, and deliver high quality.
  • New Business Models
    • While the fee-for-service model still dominates, there’s no question in my mind that the existing payment system has to evolve in the very near term. I’m interested in value-based payment paradigms as well as other new payment arrangements that emphasize value over volume.
  • Consumerism
    • We’ve been talking about consumerism in health care since the 1980s, but it’s clear that consumerism is finally growing as a movement. With health care costs increasingly shifting to the patient (20% of U.S. lives are now enrolled in high-deductible health plans and HDHP growth is estimated at 15-20% per year) there is a great opportunity to help instill market discipline in an industry that has long resisted change.

What I Care About

On a personal level I’m also very interested in bringing more people into the health innovation ecosystem.  There are many folks out there who could be doing great things in digital health including:

  • Providers
    • Nurses, doctors, and pharmacists have a front row seat in the health system and an intuitive knowledge of how it works, and many of them have great ideas about how to address the problems they’re seeing.  Unfortunately, there are relatively few providers building digital health companies and we need to help “intrapreneurs” (providers innovating within the health system) become “entrepreneurs” so they can use their advantaged perspective to build solutions to important problems.
  • Older Entrepreneurs
    • In many places, particularly Silicon Valley, it seems that youthful founders are viewed as having a competitive advantage when it comes to building startups. In the health care space, however, it helps tremendously to have relationships, experience, knowledge and a few gray hairs on the head (if you still have any left) when you’re tackling a health care opportunity. We need to help older entrepreneurs, who often have real-life responsibilities (family, mortgage, etc.) that make them adverse to risk, build digital health companies.
  • Underrepresented Minorities
    • The need for health care is universal, affecting every racial, ethnic, and social group in our country, but unfortunately, there are very few people in underrepresented minority groups working in the digital health space at this time. The same factors that are limiting minority participation in the digital health space are similar to those in the general technology industry, and can be addressed in similar ways.  We can and should do more to welcome talented people who can bring a diverse perspective to the digital health space.

To The Future And Beyond

Finally, I’d also like to point out that I’m an entrepreneur at heart, having co-founded three health startups in my career so far.  Borrowing a page from the great Sy Sperling, I hope to be not only the head of the Accelerator program, but also a participant in the next class, developing an idea along with the other portcos.  As mentioned above I’m passionate about changing the way health care is delivered and experienced, specifically as it relates to concierge medicine and direct primary care, and I hope to be able to use Blueprint resources to develop an idea I’ve been kicking around for a long time.

As a closing note, I’d like to put in a plug for the program. We’re coming to the end of the search process for class #7, so if there are any great digital health startups that might be a good fit for our Accelerator please have them apply ASAP.  The program officially kicks off February 2nd, 2015 and will run through Demo Day on April 23rd, 2015.

Something Big Is Happening Here. Join us at Blueprint Health!

We Need A New Approach To Finding Leadership Talent In Health Care

My buddy and fellow physician-entrepreneur, Steve Merahn, nails the issue of health care talent acquisition and management in a new blog post.

Money quote in my view:

“It is well established that species cannot evolve without diversity in their gene pool. If healthcare is to advance and thrive in the coming millennium, there will be a need to reconsider the entire process of recruiting and evaluating leadership talent.”

My comment:

“Steve – You nailed it and I agree. To put it plainly, just because you’re a great clinician and researcher doesn’t necessarily mean you’re a great leader and manager. In most health delivery settings, however, particularly in academic medical centers, the only way to climb to a leadership position is to be a physician who has progressed through the traditional clinician/researcher path, which screens out many, many other capable potential leaders. To make things worse most of these physician leaders have no formal management or leadership training, and even less perspective on how things work in other industries. To build on your analogy I would say that as the health care system continues its rapid evolution, health delivery organizations need to quickly increase their skills and experience diversity in order to survive. Otherwise, I think you’re going to see a lot of big, name-brand provider organizations going belly-up because they couldn’t adapt. No hospital or health system is “too big to fail”.”

An Update On the Living Lab

Quick update on the Living Lab…  As I mentioned in a prior post the Living Lab “Health Service” will be a functioning as an ambulatory/outpatient clinic and will provide direct patient care services.  The state of New York requires a physician to establish a professional service corporation (or PC) to deliver care in an ambulatory or outpatient setting.

I’m happy to report that the New York State Department of State Division of Corporations and the State Education Department have officially approved the incorporation of the “Plugin Medical Professional Corporation”, which means that I’m officially able to operate the “Health Service.” I need to do some additional work around malpractice and a few other things, but that stuff should be ready to go on a very short timeline.

You may be asking, why did I call it the “Plugin Medical Professional Corporation”? The idea behind this professional services corporation is that it can be “plugged into” the Living Lab framework and can support the activities of the “Innovation Workshop”.  In addition, the professional corporation can also be “plugged into” other digital health enterprises that require a functioning and licensed clinic environment.

More to come.

Thinking Out Loud About A New Approach To Digital Health Innovation – An Idea

Note To Reader – Today I’m publishing the last part of my blog series on digital health innovation.  I published Part 1Part 2 and Part 3 over the last few weeks and today I’m presenting a “bonus” piece with an idea for your consideration.  As always, I appreciate your thoughts, suggestions and feedback, so please feel free to comment below. Thanks for your time. JL


What Can We Do Beyond Pilot Health Tech NYC To Drive Adoption Of Digital Health Technologies?

As I argued in my last post, it’s clear that structured pilot programs are a highly effective way to drive adoption of new digital technologies in the health delivery system.  While programs like Pilot Health Tech NYC can clearly speed up the process of piloting new technologies, I believe that large, established health provider organizations are fundamentally limited in how quickly they can plan and execute any particular pilot project (for the many reasons detailed in blog post 2).  In fact, I believe programs like Pilot Health Tech NYC are operating at the limit of how quickly the typical established provider organization can innovate, and I don’t think we can go any faster using current approaches.  If we want to accelerate the pace of innovation we need to create an entirely new kind of entity to pilot digital health technologies.


The Living Lab Innovation Concept

I’ve spent a lot of time reviewing academic innovation research from authors such as Henry ChesbroughEric von Hippel, and Karim Lakhani for insight into the next generation of digital health innovation programs.  One of the most compelling innovation concepts currently in use is the “living lab”, initially developed by Mitchell, Larson and Pentland at MIT, which is best described as a:

“A system that brings together interdisciplinary experts to discover, develop, test, and deploy – in actual living environments – new technologies and strategies to solve real problems using open innovation principles”

The living lab concept is interesting because it combines a number of key elements from other innovation methodologies and directly addresses many of the issues that are currently constraining the advancement of digital health technologies in the field.  Utilizing the four main aspects of this model (exploration, co-creation, experimentation, and evaluation) a digital health-focused living lab would:

  • Exploration: Provide a platform that allows a broad range of stakeholders (patients, providers, researchers, innovators, etc.) to work together to discover problems and identify opportunities to utilize digital health tools.
  • Co-Creation: Allow these stakeholders to work together collaboratively to shape and create solutions to health care problems that are relevant and fit the needs of all involved.
  • Experimentation: Support a framework for testing new technologies to generate and collect meaningful data, test experimental hypotheses and quickly cycle through many different problems.
  • Evaluation: Facilitate the review of data from the experimentation process, support summarization and publication of key findings, and drive the application of that knowledge by all stakeholders.


A Living Lab For Digital Health

What I propose is the creation of a new entity – a “Living Lab for Digital Health” – whose primary mission will be to rapidly discover, develop, test, and deploy new digital health technologies.  This entity will be composed of two co-located components: a “Health Service” and an “Innovation Workshop”.  The “Health Service” will employ licensed providers (doctors, nurses and others) and provide direct care to patients who have consented to participate in the activities of the living lab.  The “Innovation Workshop” will employ technical staff (technologists, researchers, and others) who will interface with the innovator community, and manage the identification, creation, testing and evaluation of new digital health technologies.  The idea is to unite the “Health Service” and the “Innovation Workshop” under one umbrella, using open innovation principles, making it easier to run pilot programs and get new digital technologies into the hands of patients and providers.

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The “Health Service” will operate most effectively as an ambulatory/outpatient clinic, which will allow us to avoid the huge capital costs and the politically contentious “certificate of need” process required to create a hospital or free-standing health facility.  The “Health Service” will employ dedicated providers who exclusively serve patients, both in-person and virtually, participating in the Living Lab.  In addition to the dedicated provider staff, the “Health Service” may also support providers from more established host organizations interested in learning about health delivery innovation.  Another option would be to allow non-traditional provider organizations (such as concierge medical practices) to plug into the “Innovation Workshop” to work with the Living Lab’s technical staff and external innovators.

The “Innovation Workshop” will provide a physical laboratory environment for experimentation to take place, including computer workstations, software and hardware resources, and meeting areas.  “Innovation Workshop” staff will work directly in support of the “Health Service”, providing the many of the functions critical to advancing new digital health technologies including innovator vetting, technology evaluation, and pilot management.  The “Innovation Workshop” may directly develop its own proprietary technologies in partnership with the “Health Service” over time, in addition to sourcing technology from third-party innovators.


Aren’t There Similar Types Of Innovation Labs Already In Operation?

Given the tremendous interest in digital health it should come as no surprise that there are a number of different digital health innovation labs already operating.  University-affiliated academic medical centers were the earliest players in this space and there are well-developed digital health labs at UCSF and Harvard.  While these labs are able to harness the tremendous resources of their parent institutions I believe they are still constrained by the issues that define the academic medical center (organizational complexity, risk aversion, prioritization, etc.) and can’t move at startup speed.  I also believe that many of these academic medical center labs also face an innovator’s dilemma problem in which they may be reluctant to pursue truly disruptive technologies that might jeopardize the institutional status quo.

Accountable Care Organizations (ACOs) are also becoming a platform for digital health innovation as new payment models drive the adoption of technologies that make health delivery more efficient.  While ACOs will undoubtedly be a significant source of innovation in the future, creating an ACO is a major undertaking that requires the resources of a large entity like a hospital or large provider group.  Because of the many regulatory requirements and organizational details that need to be worked out, ACOs will be limited in how quickly they can innovate.  The Living Lab For Digital Health concept requires significantly less investment to run and maintain and will be able to generate results on a much shorter timeframe.


What Will The Living Lab For Digital Health Produce?

The primary mission of the Living Lab is to pilot new digital health technologies in a real-world clinical setting and generate research in the form of pilot studies.  Pilot studies will generally be developed in partnership with innovator entities testing a specific technology.  In general, these pilot studies will provide innovators with proof-of-concept data to demonstrate the validity of an application or product.  The research agenda of the Living Lab may be organized around specific disease states (i.e. “Diabetes Month”) or horizontal applications (i.e. “secure messaging”).  In support of pilot studies, the Living Lab will organize the following:

  • In-Person Meetings –
    • Public Forums will bring together a broad range of stakeholders to discuss a particular topic or issue
    • Focus Groups will allow smaller groups of patients and providers to work directly with technologists and innovators on specific problems
  • Online Meetings –
    • Webinars will be used to help scale interactions between patients, providers and innovators, broadening the discussion
    • Surveys will be used to collect information from all stakeholders to inform R&D and product development
  • Competitions
    • Challenges will be organized over long periods to develop solutions to problems of interest to the Health Service or Innovation Workshop
    • Hackathons will be organized to allow all stakeholders to brainstorm and build solutions collaboratively on a shorter time frame
  • Residencies –
    • Patient/Provider – Patients and providers will have an opportunity to volunteer to work with multiple innovators to collaboratively design products over a specified period of time (i.e. days to weeks)
    • Innovator – Innovators will also have the opportunity to embed themselves in the Health Service for a customer immersion experience


Are There Collaboration Partners With Whom The Living Lab Can Work?

There are many organizations working on exciting innovation efforts, many of which have participated in Health 2.0 Developer Challenge projects, that could partner with the Living Lab For Digital Health: 


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  • SHIN-NY/New York eHealth Collaborative (NYeC) – NYeC created the Statewide Health Information Network (SHIN-NY) to connect providers across New York State.  The Living Lab could utilize the SHIN-NY as a central component to deliver better care to patients in the Health Service.
  • Blue Button/Office of the National Coordinator (ONC) – The ONC has been at the forefront of our national health IT adoption drive.  The Living Lab could collaborate with ONC on initiatives like Blue Button to give patients better access to their health data.
  • SMART (Substitutable Medical Apps, Reusable Technologies)/ONC – Is a project funded through the Strategic Health IT Advanced Research Projects (SHARP) program to create more modular and flexible health IT systems.  The Living Lab could be an early adopter of the SMART system and develop applications for it.
  • Health Data NY/New York State Department of Health (NYSDoH) – The New York State Department of Health has been very active in making a broad spectrum of health related data available to the digital health community.  The Living Lab could use data sets from the NYSDoH to improve health care delivery.


How Will The Living Lab for Digital Health Be Funded?

There are a number of different potential sources of funding that can help launch the Living Lab For Digital Health and eventually make it self-sustaining, including:

  • Direct Patient Care
    • The outpatient clinic business model is well-established.  The “Health Service” will recruit patients with health insurance and seek payment for reimbursable services from third-party payors.
  • Pilot Consulting Fees
    • Innovator companies seeking validation of a new technology will likely value access to patients in the “Health Service” and may partner with the Living Lab on a project basis to generate white papers and research studies.
  • Sponsorships
    • Organizations that currently support digital health innovation efforts, such as technology vendors, payors, pharma, etc. may be able to provide significant sponsorship support to cover the costs of the “Innovation Workshop”.
  • Grants
    • Organizations that seek to promote innovation in health delivery, such as major foundations and governmental agencies may be able to fund both the “Innovation Workshop” as well as subsidize the cost of care in the “Health Service”.
  • Training Fees
    • Health providers seeking to learn more about digital health technologies will likely find value in accessing the “Innovation Workshop” and may partner with the Living Lab to receive training.


What Will It Take To Get Started? 

The Living Lab for Digital Health requires a modest capital investment and a relatively short planing period, facilitating the launch of the project on a short timeline.  Specific considerations include:

  • Organization
    • In the state of New York one must establish a professional service corporation (or PC) to deliver care in an ambulatory or outpatient setting.  Establishing a PC can be accomplished in a short period of time and I have already submitted the relevant paperwork.
    • In addition to establishing an organizational entity for the “Health Service”, the Living Lab will also require basic operating elements such as malpractice insurance and third party payor registration, all of which can be completed in less than a quarter.
    • I have already established the LLC needed to operate the “Innovation Workshop”.
  • Facilities
    • As mentioned above the “Health Service” and the “Innovation Workshop” will be co-located to facilitate interaction between providers, patients, and innovators.
    • I project that that each component requires anywhere from 1,000 – 2,000 square feet of space, for a total of 2,000 to 4,000 square feet.
    • The location will be based in New York City, likely in one of many densely populated neighborhoods to simplify patient recruitment.
    • I have been working with a design team to create the facilities needed for this project and can complete the initial design process on a short timeline.
  • Team
    • Health Service
      • The Health Service will be initially staffed with a health delivery team that is similar to what would be found at a typical medical practice with a census in the range of 3,000 – 5,000 patients: 1-2 Physicians, 1-2 Nurses/Nurse Practitioners/Physicians Assistants, and 1 Support Staff.
    • Innovation Workshop
      • The Innovation Workshop will require a small team of individuals who can interface effectively with the Health Service and the innovator community.  Worskshop staff will require background in health, business, innovation and technology.  Staffing would likely be: 1 MBA-level Lead, 1 to 2 BA-level associates.
    • Through my personal network of providers and digital health professionals I have the connections needed to pull together a great team for this project.
  • Timeline
    • Entity Formation (PC) – <3 months
    • Fundraising – 3 to 6 months
    • Team Recruitment – 3 to 6 months
    • Establishing Facilities – up to 6 months
    • Time To First Patient Visit – 6 months from project initiation


Next Steps? 

I am ready to pursue this opportunity in the immediate term.  As noted above I have most of the resources already in place and have the ability to execute along the timeline described.

If you’re interested in funding this project, partnering with me, volunteering, or just getting involved in some other way please feel free to give me a call at 646-734-2320 or email me at

Thinking Out Loud About A New Approach To Digital Health Innovation – PART 3

Note To Reader – Today I’m publishing Part 3 of my blog series on digital health innovation.  I published Part 1 and Part 2 of the series recently and will be publishing a fourth “bonus” piece (with the idea I’d like to pursue) early next week.  As always, I appreciate your thoughts, suggestions and feedback, so please feel free to comment below. Thanks for your time. JL


What Digital Health Innovation Initiatives Did We Pursue at Health 2.0?

In my last post I talked about the many provider- and innovator-facing issues limiting the adoption of digital health technologies in health delivery enterprise settings (e.g. hospitals, physician offices, etc.).  As I alluded to in the piece there are some approaches that are working well and one in particular that I think gives us a chance to really accelerate the pace of innovation.  In today’s piece I’ll talk about some of these initiatives.

At the Health 2.0 Developer Challenge program we focused on using prize competitions as the primary tool to help health care providers and other stakeholders innovate and effect change at their organizations.  Health 2.0, with the support of the Department of Health and Human Services (HHS), Office of the National Coordinator (ONC) and a broad range of for-profit and non-profit partners, pioneered a number of different prize competition formats including – hackathons, challenges, and pilot programs:



A hackathon (what we also called a “code-a-thon”) is an in-person competition event in which developers, designers, technologists, health providers, researchers and others work together closely over a very short period of time (generally 1 to 2 days) to build technology solutions to health care problems.  Hackathons are generally focused on a specific theme and center around the utilization of a specific dataset, API (application programming interface), or other technology.

In terms of the potential to help patients and providers the most impactful hackathon project we managed was the “Code-A-Palooza”, a 2-day event that took place as part of the 4th Annual Health Datapalooza (formerly known as the Health Data Initiative Forum).  The Code-A-Palooza challenged participants to utilize newly-released Medicare claims data and other data sources to help providers better understand their patient panels from both a clinical and financial perspective. The event generated a number of interesting ideas and prototype applications that had real applicability in the provider setting and could make their way into the clinic with further development.  The Code-A-Palooza was successful for a number of reasons, including:


  • Focus – Our partners at HHS and ONC did a great job in defining a relatively narrow focus for the event and specifying a clear aim – i.e. helping providers develop actionable insights from a very important dataset.
  • High Value Resource – The Code-A-Palooza gave developers access to a very high value source of information, namely Medicare part A and B claims for 2011, a dataset that had been largely unavailable to the innovator community in the past.
  • Support – Finally, teams at HHS and ONC provided a high level of support to event participants, including an excellent “pre-game” orientation session, which allowed the attendees to hit the ground running.   In addition, a number of participants in the hackathon were physicians, as was one of the event organizers (the ONC’s Rebecca Mitchell), which greatly helped the participants develop insight into real issues faced by providers.

Overall, hackathons are an interesting innovation tool with a great deal of potential, which is why a number of major technology companies, most notably Facebook, use hackathons on a regular basis to stimulate internal innovation and experiment with new ideas.  Hackathons can help innovators access the health system and develop a better understanding of relevant health care issues through collaboration with providers sponsoring or participating in an event.

From the provider’s perspective, however, a hackathon isn’t the best tool to build solutions to real problems in my opinion.  Simply put, the solutions often needed by provider organizations to solve complex problems can’t be built in a weekend.  Instead, we found hackathons to be a good place to start a discussion about interesting health problems and kick-off brainstorming around the development of potential solutions.  Organizations interested in the hackathon model can benefit from this approach as long as their expectations are set appropriately.



A challenge is a type of innovation competition lasting several months in which teams of developers, designers, technologists, providers, researchers, and others self-form to build technology solutions that address a problem proposed by a sponsoring organization.  Submissions to a challenge competition are submitted virtually and reviewed online by a panel of expert judges.  During my tenure at Health 2.0 we managed a number of provider-focused challenge competitions with organizations such as Dignity Health, the Palo Alto Medical Foundation, and the Henry Ford Innovation Institute.

In terms of the potential to help patients and providers the most impactful challenge project we managed was the Allscripts Open App Challenge.  The challenge tasked participants with building applications that could extend the functionality of Allscripts’ EHR (electronic health record) software.  This opportunity was significant for two reasons.  First, Allscripts is one of the largest global EHR vendors and has a large provider footprint, with 1,500 hospitals and 180,000 physicians using one or more of the company’s applications.  Second, and more importantly, Allscripts opened its platform thereby giving participants in the challenge broad access to the provider community.  This competition was successful for a number of reasons, including:


  • Prizes – A large prize purse, totaling $750k, helped attract a record number of submissions for this competition.  The first prize of $250k (comparable to what many web companies raise in a seed round) provided the winner with significant funding to turbocharge its growth.
  • Sponsor Involvement – The Allscripts team, led by Tina Joros (Director of Business Development), was hugely supportive and developed an excellent program for getting developers on their platform.
  • Post-Challenge – Many of the applications submitted in the competition (including those that didn’t win) are available now in Allscripts Application Store.  Allowing developers to sell their applications alongside the company’s offerings created a meaningful way for participants to benefit in the long-term.

A challenge is another useful innovation tool that can help provider organizations try new approaches to health delivery.  From the innovator’s perspective a challenge addresses many of the major problems limiting the adoption of health technology.  Challenges, particularly those like the Allscripts challenge, can give developers ready access to the health delivery system and can direct participants to specific high-value problems.  In addition, by offering significant prizes to competition winners, challenges can also help application developers thrive and grow.

From the provider’s perspective a challenge offers at least two huge benefits: prioritization and risk-mitigation.  At most organizations a challenge is treated as a high priority event, in large part because of the significant public exposure the competition generates.  Running a challenge is a great way to prioritize an issue within an organization and generate internal support from a range of stakeholders.  Challenges are also a great way to mitigate risk.  By attracting a large number of participants, challenge sponsors are able to evaluate a broad range of potential applications and pick the best examples for a prize (or a deeper business relationship) vs. being locked into a relationship with a single vendor.


Pilot Programs

A pilot program is any type of competition project that brings together major health stakeholders like providers, payors, and pharmas with innovative companies developing digital health technologies for the specific purpose of piloting a new technology in an established health industry environment.

In the early days of the Developer Challenge we sometimes had competition sponsors and participants ask the question, “What happens now that the competition is over?  What’s next?”  Admittedly, in a good number of competitions we ran at the very beginning of the program very little would happen between the sponsor and the winning team post competition.  It was not uncommon for impressive applications to wither on the vine because there was little support to take them forward.  Over time, however, we responded to this need by offering winners the opportunity to work more closely with a sponsor after the end of a competition.

For example, in the Palo Alto Medical Foundation Linkages Successful Aging Challenge the winning team took home a modest $5,000 first prize, but also got an opportunity to work directly with the PAMF Innovation Center Team for 6 months after the competition to commercialize their technology.  In the Patient Portal for New Yorkers Design Challenge the winning team was awarded only $15,000, but was afterward awarded a contract by the challenge sponsor (the New York eHealth Collaborative) to build the New York State patient portal, an opportunity worth many times the prize for winning the competition.

As we gained more experience we discovered some recurring patterns. In particular, we found major stakeholders asking us to 1.) use our resources to find companies matching a certain profile, 2.) set up meetings with relevant companies, 3.) develop a framework to evaluate and judge target companies, and 4.) help them manage pilot programs.  Similarly, we found innovator companies asking for 1.) introductions to key stakeholders, 2.) funding to support product development, and 3.) help in arranging and managing pilot programs.  Over time we developed a series of capabilities to serve these needs, which was critical to the creation of the Pilot Health Tech NYC Initiative, sponsored by the New York City Economic Development Corporation (NYCEDC), one of the most effective digital health innovation programs in existence.


Enter The New York City Economic Development Corporation

First, a bit of history.  Way back in 2011 the NYCEDC launched an initiative called Bio (Eds and Meds) NYC 2020 to support the development of life science and other health care businesses in New York City.  As part of the initiative EDC organized a number of salons to engage leaders in the local health space to understand the strengths, challenges, and opportunities for the industry in the city.


A number of these workshops, which I was fortunate enough to attend, centered specifically on the topic of digital health.  In these meetings EDC explored a number of different issues impacting the growth of the digital health industry in NYC.  The consensus opinion from the digital health leaders in attendance was that market access was far-and-away the #1 problem their companies faced.  It was agreed that the EDC could be most helpful by connecting digital health companies with the city’s many hospitals, health systems, and academic medical centers.


Pilot Health Tech NYC Is Born

To help address this problem, EDC (in consultation with Health 2.0) created the Pilot Health Tech NYC initiative.  The program, which launched in 2013 and has been renewed for 2014, seeks to match early-stage health or health care technology companies (aka ‘innovators’) with key NYC health care service organizations and stakeholders (aka ‘hosts’), including hospitals, physician clinics, and payors to support pilot programs to test new technologies.  Pilot Health Tech NYC provides a total of $1,000,000 in funding to 10 or more innovative pilot projects that will take place in New York City.

If you are a digital health startup or a hospital, health system or other major health care entity YOU MUST APPLY TO THIS PROGRAM.  The funding is significant and non-dilutive, the marketing and PR benefits are invaluable, and the support provided will help turn many of the pilot programs into long-term business relationships.  The deadline for applications in May 23rd and the application is online now.


If you represent a city, county or state government and you want to use digital technologies to improve the health of your constituents, Pilot Health Tech NYC is the template you should use.  DO NOT TRY TO RE-INVENT THE WHEEL.  If you want to learn more about the program please feel free to contact the Developer Challenge team or hit me up by email or on twitter.


Why Does The Pilot Health Tech NYC Program Work?

In a very short period of time we helped create and launch 10 pilot projects that without the program might have taken years to develop, if they ever even occurred at all.  The innovators participating in the program have been able to learn tremendously from interactions with the hosts, and are able to use that knowledge to enhance their products and develop new client relationships.  We’ve also seen that the signaling provided by the program has helped a number of innovators raise money from top-tier venture capitalists, including: Flatiron Health ($130mm from Google Ventures), Biodigital ($4mm from FirstMark Capital), eCaring ($3.5mm from Ascent Biomedical Ventures).  Similarly, the hosts have been able to learn from the innovators and develop projects that can significantly impact their organizations.  Interest in the program remains high and we expect record participation numbers this year.

The Pilot Health Program works because it addresses many of the provider- and innovator-facing issues currently limiting the adoption of digital health technologies. On the provider side:

  • Risk – The structure of the program helps host organizations reduce risk by providing a neutral platform that allows hosts to talk to a broad range of innovators and experiment with different approaches before having to commit to any one program.  Multiple hosts have also noted that having an official city agency function as an impartial convener helped them allay organizational concerns about risk.
  • Prioritization – In designing the program we realized that given the many competing priorities at most host organizations it was critical to provide funding to offset the cost of host participation.  Funding the hosts has helped them engage fully, which has benefited the pilot programs immensely.
  • Fee-For-Service – While the Pilot Health Tech NYC program has not altered the fee-for-service payment model (yet), it has helped innovators identify places where hosts are operating in alternative, at-risk reimbursement arrangements where the application of digital health technologies makes sense.

On the innovator side the program has been able to address many of the issues small companies have to deal with in working with established health stakeholders:

  • Access – Unlike a challenge program where an innovator has access to perhaps one provider, the Pilot Health Tech NYC program has allowed innovators to interact with a much greater number of potential targets.  In addition to having more potential partners, the program has also provided a much deeper level of interaction via matchmaking sessions and other activities.
  • Understanding the Issues – Information about the needs of the hosts was shared with the innovators, providing invaluable insight that would be difficult to find elsewhere.  This information combined with in-person interactions in the matchmaking sessions has helped innovators understand at a deep level problems they can attack.
  • Survival – Finally, the program has provided the innovators with significant funding (some part of $100k) to drive growth, as well as the the opportunity to work with a host over the long term in a deeper business relationship.

In summary, we discovered that while innovation in the digital health space is challenged by a range of limiting factors there are clearly a number of approaches that have worked well to advance the field.  Pilot programs are by far the most fertile approach to digital health innovation and the Pilot Health Tech NYC initiative is the best in breed.  Hopefully leaders at major health care stakeholders interested in innovation can learn from these insights.


Next Up: Thinking Out Loud About A New Approach To Digital Health Innovation – An Idea. In my next post I’ll talk about my idea for digital health innovation that emerges from the lessons learned running the Pilot Health Tech NYC program.

Thinking Out Loud About A New Approach To Digital Health Innovation – PART 2

Note To Reader – Today I’m publishing Part 2 of my blog series on digital health innovation.  I published Part 1 of the series recently (and was then taken offline by a painful hard drive failure) and will publish the next piece sometime next week.  I appreciate your thoughts, suggestions and feedback, so please feel free to comment below. Thanks for your time. JL


What Factors Are Limiting The Use Of Digital Technologies In Health Care Delivery?

In my previous post I argued that while there is a tremendous amount of excitement around digital health (signified by new company formations, investments, exits, etc.) very little of the innovation we’re seeing at the Health 2.0, TedMed, Stanford/MedicineX conferences is making it into health care delivery “enterprise” environments (e.g. hospitals, doctors offices, etc.). What I learned from running the Health 2.0 Developer Challenge and pursuing my own startups is that the underpenetration of digital technologies in the clinical realm is a complex problem with many root causes.

Because the factors limiting digital health innovation (detailed below) are inextricably linked to the history, culture, financing, and organization of the health care industry I don’t think there’s ANY simple “silver bullet” solution that will dramatically accelerate digital health adoption in the short term.  That said, I do believe there are approaches that are working well and that can help us increase the pace of technology adoption, one of which I will detail in my next post.  I also think that by understanding the factors limiting adoption of digital health technologies, we can start to develop new and improved innovation strategies to accelerate progress.




At a high-level the factors limiting digital health innovation can be broken into those impacting providers (doctors, hospitals, health systems, and academic medical centers) and those impacting innovators (companies creating new technologies to help providers deliver care more effectively):


Provider Facing

  • Fee For Service Is King – In my view, the dominance of the fee-for-service payment model in the United States is the single greatest obstacle to the adoption of digital health innovations in the delivery of health care.  In the fee-for-service model providers only get paid if they can bill a third-party payor for a service that has been previously assigned a reimbursement code.  While telehealth visits (telehealth being arguably the most commonly employed type of digital health technology) are increasingly reimbursed by Medicare, Medicaid and private insurers, few other categories in the digital health space are eligible for third party reimbursement.  Therefore, providers have little incentive to use or try digital health tools to deliver care more efficiently, despite the potential benefits to patients.  CMS (Centers for Medicare and Medicaid Services) and other payors are currently experimenting with new alternative reimbursement models such as the Shared Savings and Readmissions Reduction programs.  These new programs are driving provider organizations to seek out and embrace technologies that may not be reimbursable, but can help them maximize the financial results from these alternative payment arrangements.  In fact, one of the hottest areas in digital health is the “readmissions prevention” sector where dozens of startups are building technologies to engage patients, monitor them at home, and facilitate communication with providers with the goal of preventing readmission to the hospital.  As alternatives to fee-for-service medicine proliferate we will hopefully see greater demand for digital health technologies in the clinic.
  • Risk Aversion – The health industry, in general, is very conservative and for good reason – when you’re providing care to human beings you want to make sure you’re limiting risk and avoiding anything that could hurt a patient.  In the United States there is also the ever-present risk to providers of medical malpractice litigation which resulted in $3.7 billion in payouts to plaintiffs in 2013 .  Providers are generally averse to any technology that hasn’t been thoroughly validated and approved for use (except obviously for new drugs and devices being tested in clinical trials), which makes it difficult for new digital health startups that often have no evidence to support what they’re offering.   In addition to lacking evidence of efficacy, many digital health products and services are further hampered by limited functionality and it’s not uncommon to see applications marketed that have more than a few bugs.  In an industry in which products are expected to work perfectly there is very little patience for “beta” releases and unstable prototypes.  In health care it’s almost always better to be safe than sorry.
  • Organizational Complexity – Another issue that plagues providers and stifles digital health innovation is the organizational complexity of many academic medical centers (AMCs), hospitals, and hospital systems (the org chart for UT San Antonio Health Science Center is illustrative). The typical AMC is an amalgamation of a teaching hospital (or hospitals), a medical school (often associated with a major university), a physician professional service group, and various research institutes (among other things).  Each component of this unwieldy organizational structure generally has its own leadership (often with some overlap), its own mission, and its own priorities.  Coordination of these different entities to support a new digital health initiative can be difficult, if not impossible, particularly as the number of stakeholders increases.  Other sources of complexity include legal and regulatory review processes that may not be optimized to consider new digital technologies, and budgetary approval processes that must go through multiple levels of review.  Even well-defined processes are complicated and proceed at a glacial pace in the typical AMC.  For example, most digital health pilot programs launched at an AMC will require IRB (Institutional Review Board) approval prior to launch, a critical step for any research protocol involving human subjects, but this process can often take months to complete.  Many large provider organizations simply can’t move at innovator pace, which greatly constrains new technology experimentation.


Innovator Facing:

  • Health System Access – In addition to being conservative the health care industry is also very insular, with a clear distinction between “insiders”, those who have been granted access (via licensure or certification) to the inner workings of the health care system (i.e. doctors, nurses, administrators, etc.), and “outsiders”, which is pretty much everyone else.  Digital health companies need to get “inside” the delivery system if they want to work on the biggest problems (remember, almost 60% of health care spending goes through providers), but getting inside the typical health system, hospital, academic medical center, physician practice or clinic, however, is really hard.  At large institutions (think health systems), just navigating the organization and finding a decision-maker can be really difficult.  At smaller institutions (think doctors offices) the decision maker is generally heavily defended by an array of gatekeepers.  I have found that unless you have privileged access to the “inside” of the system getting to your target customers can be a long, expensive, and painful process.
  • Understanding The Issues – The $3 trillion U.S. health system is wickedly complex and difficult even for insiders to understand fully.  Because of the complexity of the system and because accessing the inside of the delivery system is so hard, it can be difficult for innovators to get an accurate read on what problems need to be solved.  If they can get a sense of the problems, entrepreneurs sometimes fail to understand the subtleties of the health system, like hidden incentives and arcane regulations.  In addition, innovators often fail to collaborate with all the important stakeholders (think patients, providers, administrators, etc.) and miss key user insights.  As a result, innovators may develop solutions that don’t solve real problems or don’t solve them in a way that benefits the relevant stakeholders.  Unfortunately, many entrepreneurs are RIGHT NOW building products and services for customers who don’t want or need them.
  • Survival – Many entrepreneurs, particularly those coming from the “lean startup” world, don’t understand that success in the digital health space is more-often-than-not a long term proposition.  Digital health companies require significantly more runway to succeed compared to other types of startups and also therefore require more funding.  In digital health everything will take longer than you think and will cost you more than you expect: you’ll have to build more security and privacy features into your product, you’ll need to hire high-quality sales people with deep relationships to sell your product, those salespeople will need more time to sell to large enterprise customers, and you’ll end up doing more legal work to understand issues like HIPAA, among other things.  Fortunately, digital health companies are raising more money now than ever before, which should hopefully increase the chances that new digital health innovations make it to the market.

This list of reasons for why technology is not making into the delivery system is by no means comprehensive.  There are likely many other reasons that I missed and I invite you to add your own thoughts in the comments section below.  The point I’m making, however, is that digital innovation is constrained by a wide variety of limiting factors that will not be easy to overcome in the near term.


Next Up: Thinking Out Loud About A New Approach To Digital Health Innovation – PART 3. In my next post I’ll talk about the most successful innovation program I ran during my time at Health 2.0 and the implications for other digital health innovation efforts.

Thinking Out Loud About A New Approach To Digital Health Innovation – PART 1

Note To Reader – As some of you know I recently left Health 2.0 after a great three year run. Over the last few weeks I’ve spent time reflecting on my experiences and thinking about the future of digital health. This piece, which has been broken into three posts, is a distillation of my thought process and culminates in an idea for advancing digital health innovation. Today I’m publishing Part 1, and will be publishing the other parts over the next few days. I appreciate your thoughts and suggestions on how to move forward, so please feel free to comment. Thanks for your time. JL


Digital Health Is Taking Off – Believe The Hype

It’s a very exciting time in the world of digital health (or “e-health” or “health tech” or whatever term you’d like to use).  Back in 2007 when my buddy Ed Shin (now CEO/founder of Quality Reviews) and I launched our online clinical trials matching company, Healogica, nobody seemed to care about technology-focused health companies.  In “those days” everybody was obsessing about “Web 2.0” companies and the big ideas of the day: social networking, social media, user-generated content, etc.  Digital health definitely wasn’t sexy.




Fast forward a few years, however, and it’s amazing how much the digital health industry has evolved.  Until recently, I was the Director/GM of the Health 2.0 Developer Challenge program, where I worked with large health stakeholders and digital health innovators to solve interesting problems using technology.  Over the course of three years, I watched interest in digital health EXPLODE with thousands of individuals and many-hundreds of companies creating new products and services to address a wide range of health care problems.

Major pieces of legislation like the ACA, ARRA-HITECH, and America Competes are creating many new opportunities in digital health that simply didn’t exist before.  The excitement around the space is palpable and highly reminiscent of the mood in the early internet days (depends on your perspective, of course, but I’m talking circa mid-nineties).


You Want Evidence?  I Got Your Evidence Right Here!

To understand how much has changed let’s take a look at investment in digital health companies.  MobiHealth News analyzed 10 years of publicly disclosed funding data (see graph below) for “patient-facing digital health companies”.  Their analysis showed that funding for digital health companies increased every year from 2002 to 2012 (except for a slight drop 2009), totalling $939 mm in 2012 (up from only $6mm in 2002).

While the Mobihealth data shows a funding dip in 2013, a report by RockHealth showed a 39% annual increase in venture funding for digital health companies in 2013 (totalling $1.97 B), and recently-released data from Q1 2014 show an 87% (!) year-over-year increase from Q1 2013.  Health 2.0, in a report using a more precise methodology to determine funding levels (they include venture funding, angel funding, and other sources), showed that funding for the digital health sector increased from $1.61 B in 2012 to $2.31 B in 2013, a year-over-year increase of 43%.  Bottom line – a lot of money is being invested in digital health now and that amount is growing steadily.




What’s even more encouraging is that investment in digital health is now being rewarded with meaningful exits.  In the last month we had TWO digital health IPOs: Castlight Health (CSLT), the SF-based health transparency company, and Everyday Health (EVDY), the NYC-based digital media and content company.  By going public, these companies have shown that it’s possible to build a significant digital health company AND achieve a significant exit, something that many investors have been dubious about for a long time. An increasing number of acquisitions of companies like MapMyFitness, Avado, and Bodymedia has also strengthened investor confidence.

There are a number of other really well-positioned companies out there like ZocDoc, PracticeFusion, and Vitals that could also IPO or be acquired soon, and it will be exciting to see where they end up.  I believe that success begets success and predict that the strong financial performance of digital health companies will continue to drive investment and growth in the space.


Meanwhile, Back In the “Real World” Of Health Care

Despite all the money invested, all the new companies formed, all the talented people who have come into this industry, and all the hype, the truth is that very little of the innovation that we are collectively building is making its way into the “real world” of hospitals, clinics, pharmacies, nursing homes and other places where health care is delivered.  Why does this matter?  Well, if you want to innovate and slow the relentless upward climb in health care costs you have to go, as Willy Sutton (might) say, “where the money is”.  Where the money is (see chart below) is in hospital care and professional services (almost 60% of total national health expenditures) – i.e. direct health delivery.




Ask yourself, however, what has changed at your local hospital or doctor’s office since the foundation of WebMD, the first big digital health company, back in 1996?  What percentage of doctor visits are booked online?  What percentage of prescriptions are filled online?  What percentage of provider-patient interactions happen virtually?  Ask yourself a similar set of questions about any other industry – banking, retail, entertainment – and you realize that the health system  you and I experience every day is still phenomenally ANALOG.

I will admit that there has been some progress made in the use of technology to deliver health care, particularly in the area of electronic health records (EHRs).  A recent study showed EHR adoption increasing year-over-year across all provider group sizes (small physician office, large physician office, and integrated health system), with the overall adoption rate in 2013 being 61% (vs. 50.3% in the prior year).  I think everyone would agree that the adoption and use of electronic health records is a good thing.

The cynic in me, however, would like to point out that the increased adoption of EHRs has been fueled by big-time government incentive programs that won’t go on forever.  The part of me that “keeps it real” would also like to point out that the incentives have driven the adoption of antiquated legacy EHR systems that primarily allow providers to bill more aggressively, and don’t really improve the quality of health or the health experience.

Aside from EHRs I’m sure that there has been some progress made in other places, but overall I think it’s safe to say that we’re not anywhere close to where we need to be.


Next Up: Thinking Out Loud About A New Approach To Digital Health Innovation – PART 2. In the next post I’ll talk about the issues holding us back and how we addressed the innovation problem at Health 2.0.

Full House For NYCEDC Innovate Health Tech NYC Demo Day

Last night we hosted a TOTALLY full house (we got pictures to prove it!) for the NYCEDC Innovate Health Tech NYC Demo Day at the WeWork Lounge in SoHo. The 10 best teams from the competition got the opportunity to pitch their technologies live to a panel of health tech luminaries, who evaluated their entries on “potential for success”.  The judges deliberated live on-site and helped select our 3 winning teams:

Sincere congratulations goes out to our winners and all the teams that participated last night.  We’re creating a revolutionary health tech industry here in NYC and the entrants in this competition are building it through their outstanding contributions.

Finally, I’d like to thank the NYCEDC for creating this great program and Janssen Healthcare Innovation for sponsoring the challenge. Last, but not least, thanks to our judges and our partners at ChallengePost, and Startup Health for making this day a huge success.

Onword and upword for NYC Health Tech!