The first Coyote Fireside Chat of the new year was a panel that discussed “Partnering with Healthcare Providers,” presented by experts Michelle de Haaff, assistant director at Stanford Biodesign and former VP at Glooko, and Noel Pugh, CEO and co-founder of e-Lovu. Nina Joshi, a Coyote Venture Fellow and Senior Consultant at Kaiser Permanente’s Innovation Studio, moderated this event.
Our Fireside Chats aim to be transparent and tactical sessions to provide founders with valuable lessons for navigating the digital health landscape. Successfully engaging with providers is a core component of operating in the healthcare space. We sought perspectives from founders and operators on how to foster and maintain meaningful partnerships with healthcare providers.
Included below are some of the key themes and takeaways that we took from this event:
What are the various types of provider networks?
When thinking about network types, it's first important to think about the two categories of care delivery: nonprofit and for-profit. Nonprofit healthcare providers include academic centers and larger delivery systems, these organizations tend to be mission and outcomes-driven. For-profit organizations, like HCA, place more weight on the financial components of a business like EBITA, ROI, and payback periods.
These two categories can be subdivided based on the operating model and patient population. Other groups of provider networks include:
Integrated delivery networks (IDNs): organizations that offer insurance and are also a provider of healthcare and health services. Because they provide the insurance, they take on risk and focus on r providing preventative, outcome-oriented care (e.g., Kaiser, Intermountain.)
Large provider networks: large organizations that provide healthcare services at scale. This includes large hospital systems and academic institutions. These organizations are still largely fee-for-service; but have also have some at-risk contracts with government and private insurance (e.g., Mayo Clinic, Sutter Health).
Independent Practice Association (IPA): these groups bargain with insurance on behalf of physician groups.
Community clinics: government or privately-run clinics in the community. Many community clinics are venture-backed and growth-oriented. They have been known to take on at-risk contracts and often focus on preventative community level care. (e.g., Oak Street and One Medical.) These clinics tend to be more tech forward, and open to digital health innovation.
Consolidated provider groups: these groups typically have private equity or McKesson involved and are also interested in technology.
As a founder, it is important to understand who you are selling to and the value that you can bring to each organization. Noel suggested employing a parallel strategy for partnering with providers- get into a community practice, where providers will quickly leverage your technology, while also working with larger systems with longer sales cycles.
At what stage in my business should I start thinking about contracts?
Essentially, the sooner the better. Sales cycles can take 18-24 months and it could be 10 months until you’re sitting in front of various stakeholders including the IT team. The most important thing when having these conversations is to figure out your business case to the provider. The only pushback from organizations could be that you may be too young- but you are still on their radar. When you start to sell to providers, make sure to nail your product and value proposition for the provider. Be clear about the outcomes your product garners, and the economic impact it can have for the provider (e.g., saves money; increases revenue.)
Who are the Key Opinion Leaders in provider networks and how can I get in front of them?
A good place to start is looking for physicians and/or researchers who are conducting forward-thinking research, publishing to advance their area of practice, or showing interest in early-stage technology and innovation. These providers are great for providing feedback, which is crucial during the early stage of a business. Ask them for their opinion and if they can recommend (or be) advisors. Real-world evidence of your solution is key! These providers can be key influencers in purchase decisions down the road, and by engaging with them early on in a collaborative manner you can get their buy-in.
Michelle also recommended using the D2C channel as a way to get immediate feedback from patients and demonstrate traction. She recommended finding communities of enthusiasts who are passionate about the specific area to partner with so that the marketing costs can be minimal.
How do I prepare for engagement with providers?
Before meeting with provider organizations, Noel recommended thinking about the Win / Win / Win for provider networks. How is your solution a win for their patients, their pockets, and their physicians? By honing on this framework before having a conversation with an organization you can speak to each aspect of their business.
Michelle’s feedback was to think about how your solution may impact other lines of business and to understand the flow of money for the given organization. It is important to understand existing workflows and how your solution will be an optimizer and not a disruptor for these areas.
Partnering with folks who have journeyed through an organization can provide some insight into their workflows and structure. Additional resources for researching include organization websites- specifically press releases on new programs, venture websites for case studies from portfolio healthcare companies, and the Definitive Healthcare database which includes claims data and stakeholder information. This database requires a paid membership but they can offer agreements for early-stage startups.
Some table stakes to consider:
Michelle outlined some table stakes to consider before pitching:
Prove that the technology works
Show some patient outcome data
Prove that the platform and its data are safe and secure
Understand HIPAA and how it is integrated into your business
Design for integration
The level of integration is a key question for many founders. Noel and Michelle stressed the importance of meeting the system where it is and not over-prioritize building integrations before knowing what the organization needs. They suggested a bi-phasic integration strategy starting with a pilot to determine the points of integration and continue to build as you evolve. However, it is essential to design your solution for integrations. Especially because as a new company it is important to take barriers to adoption away.
Michelle also reinforced the significant investment that large providers have spent to implement EHR. This means that providers are going to protect their tech architecture and will want to know that you can keep their data safe and fit into their ecosystem.
Tips and tricks for pitching providers?
Have a pre-wire call before an official pitch. Noel suggested asking the provider team, “What keeps you up at night?”. This will allow you to design your pitch to their specific pain points.
Create a stakeholder map. Understand who you are partnering with, as some champions may not have taken a deal through the organization. Noel recommended understanding the “political capital currency” of the champion, as some may be more poised to move a deal through.
Know who the super-influencers are. Some key influencers are not officially involved in the partnering discussions but have a say in the technology or solution being implemented. Michelle recommended asking “Is there anyone else we can get feedback from that may play a role in this decision?”
Demonstrate modularity. Show that you can meet the providers where they are at.
Understand who the signatory is. For a for-profit organization, it is typically the CEO or COO of that local hospital or market president of the specific division. For nonprofit and integrated delivery networks, it may be a functional lead or another signatory. If you don't know, ask!
Collaboratively ask questions and come to listen. Don’t walk into the meeting only to pitch.
Use the consultative + challenger approach to close the deal. Noel’s feedback was to start with a consultative approach and transition to a challenger approach of “You’ve done it this way and it will be even better if you can do this. Let me tell you why there is a new way”.
The Don’ts (aka lessons learned from Michelle and Noel):
Have too many people in a meeting. Noel shared the sweet spot of between 5-8 folks in a meeting to maximize engagement and efficiency.
Share the secret sauce too quickly. Sometimes organizations can use your insight to optimize an existing product they have in your segment. Only open up if you sense that they have a deep desire to partner with you and don't extend your technology or partners without protections in place.
Push too hard. A key piece of advice is knowing when to get out. As a founder, time is valuable and it's important to spend the time on where you are getting traction.
Have an endless pilot. Pilots with parameters and timelines in place are crucial. Create parameters around what is being tested (patient outcomes, cost savings. etc.) and have upfront conversations about what the next step is if both parties meet the goals they want. This is a good opportunity to explore a pilot-to-contract pipeline.
Have a tech mindset only. It’s crucial to have a problem mindset rather than a tech or solution mindset when speaking to providers.
We hope this fireside chat series continues to be valuable, and we look forward to seeing you at our next session!
If you wish to submit your pitch to the Coyote Ventures team, please submit it via the form on our website.