Innovators in the healthcare industry, driven by an unwavering belief in their innovation combined by a genuine desire to improve patient outcomes, can often find their entrepreneurial energy blunted by the difficult realities of bringing a new technology to a highly regulated and complex marketplace. Here are 7 key pieces of advice to bear in mind when embarking on your journey as an innovator in the healthcare industry.
1) Understand your market and its dynamics
Many start-ups have an amazing bright idea and believe that the market will recognise the brilliance of their innovation and uptake will surely follow. Unfortunately, the reality is often very different. The market may not be ready for your innovation; many brilliant innovations failed because the market conditions were not quite right. Failure to build an objective understanding of the market conditions and competitive forces you want to penetrate may eventually lead to failure of uptake.
2) Understand your customers: patients, healthcare providers and budget holders
Along with understanding your market comes understanding your customers. In healthcare, we are dealing with several different stakeholders involved in the decision to purchase/ use/ prescribe. Each of these stakeholders has different requirements, needs, hopes and tasks to be done; getting to a thorough understanding of what could drive each of them using your product will be key to developing a technology which satisfies market needs. The most important stakeholders to consider in any healthcare innovation are the patients themselves, the prescribing physicians, and the care budget holders.
3) Understand the clinical workflow and pinpoint the optimal entry-point of your product.
Use of healthcare technologies occurs within care pathways, which are either prescribed as standards of care by a governing body or practices which have been taught at medical college or recommended as due process in a healthcare setting. Your innovation needs to slot into these established pathway as disrupting established care pathways tends not to be a successful strategy for success in the healthcare industry.
4) Understand the payment and reimbursement landscape
Healthcare markets operate very differently from normal consumer economies; the people benefiting from the technology (patients) are different from the people selecting the technology on their behalf (doctors), who again are different from the people paying for it (budget holders in the shape of care commissioners, insurance providers, hospital purchasing committees, NHS). Understanding the national payment and reimbursement landscape ensures that you maximise the chances that your technology will generate revenues for you in the targeted markets.
5) Choose your indication carefully
It may be that your technology has been specifically designed for a particular indication, or that you believe it can provide benefits in several indications. In both cases, further research into the indication and your technology's suitability for use in that specific indication is recommended. Doing some early-stage modelling of its use in different disease areas will enable you to focus on those indications where your technology can generate optimal impact in terms of health outcomes and budget savings.
6) Be wary of the "direct to consumer" business model
Selling directly to consumers (i.e. patients in the healthcare market) may seem an attractive option as it avoids the arduous process clinical validation and regulatory approval. However, this approach rests on the assumption that patients are willing to pay out-of-pocket for health-related products and services. The provision of healthcare in the most developed countries is via a collectively financed system where funds are raised through insurance premiums or taxes. As a result, patients expect their healthcare expenses to be either covered by a single-payer such as the NHS, or reimbursed by a insurance provider (such as the statutory health insurances in Germany), and willingness to pay out of pocket tends to be low.
7) Stop believing and start demonstrating the clinical and economic value your product brings
While you as an innovator certainly believe in your product, this leap of faith is not something you can reasonably expect a clinical decision maker or even a budget holder of a collectively financed healthcare system to make. Stakeholders in healthcare require solid evidence to be convinced. Ensure that you have an evidence generation strategy alongside your product development plan that goes beyond just the next milestone. Start conversations with all the relevant stakeholders early to understand what sort of data they would need to see. Economic models are often required to demonstrate the cost-saving and/or health-saving potential your innovation can potentially bring.