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.
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.