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What’s Your Business [Medical Practice] Start Up Style?

5 Responses

1. Dr. David Edward Marcinko MBA CMP™, on January 9, 2012 at 12:18 AM said:

   Which Health Incubator Should You Apply To?

   Health startups are emerging in high numbers this year and it’s no surprise. The health tech space is booming with new advances in HTML5, mobile health, and social media. But, with the economic downturn, it’s hard to go out on your own without funding or guidance.

   Fortunately, there’s help. Over the past year, four startup incubators have surfaced offering a mentoring program specific to health technology entrepreneurs.

   However, which one should you apply to? Here’s a breakdown of each accelerator and their offerings by Thuc Huynh, MD.

   http://thehealthcareblog.com/blog/2012/01/02/which-health-incubator-should-you-apply-to/

   Dr. David Edward Marcinko MBA CMP™
   http://www.BusinessofMedicalPractice.com

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2. Dr. David Marcinko MBA, on January 24, 2016 at 12:28 AM said:

   START-UPS ON STEROIDS

   According to Wikipedia, Unicorn is a term in the U.S. investment and venture capital industry that denotes a start-up company—originally and often software-focused, but now more inclusive of other sectors—whose valuation has exceeded the somewhat arbitrary value of $1 billion.

   As of August 2015, the list was led by Uber (transportation), Xiaomi (consumer electronics), Airbnb (lodging), Palantir (big data), and Snapchat (social media). Canadian tech unicorns have been termed “narwhals”, and a new buzzword, “decacorn”, has been reported for those companies over $10 billion, which include all of the foregoing five, as well as companies such as Dropbox and Pinterest. For instance, as of October 2015, Uber was valued at US $51 billion.

   The concept was thoroughly investigated by Aileen Lee of Cowboy Ventures, after that firm created a database of such unicorns to understand their financial, leadership, and technical characteristics. VentureBeat reports 229 unicorns as of January 2016.

   Bill Gurley, a partner at Benchmark (as of October 2015), a venture capital (VC) firm that had invested in Instagram, Snapchat, and Uber, as well as a VC investor with experience in previous economic downturns that affected Silicon Valley predicted in March 2015 and earlier that the rapid increase in the number of unicorns may presage what he has termed a “risk bubble” that will eventually burst, leaving in its wake what he terms “dead unicorns.”

   Dr. David Marcinko MBA
   http://www.BusinessofMedicalPractice.com

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3. Peter R. Kongstvedt MD FACP, on May 4, 2016 at 5:22 PM said:

   Medical Start-Ups

   Yes. Of course, “any” startup can mean one in a million, though I think the odds may be at least a little bit better than that. CO-Ops probably have the hardest time because of all of the restraints placed on them under the ACA as well as the lack of funding for getting them through their startup period. Co-ops, meaning cooperatives, may be better positioned, but not by much. In both cases, it is unlikely that they can have the deep financial resources to withstand the impact of bad luck or a tough market and subsequent drops in statutory net worth.

   Venture-backed startups potentially have far greater financial resources behind them, but that financial backing is tied to a rope and it can be pulled back if the investors conclude their money can be more lucratively invested elsewhere. In the early expansive years of managed care – back in the era that ushered in Prince, Michael Jackson and Elvis Costello; and ushered out disco* – venture capital backed HMO startups sprang up everywhere. But that was because market consolidation was so dynamic that investors were reasonably confident that they would be able to cash out at a nice multiple within the typical venture capital time frame, about three to seven years. That is no longer the case, and it’s harder to make the case that venture capital cannot be better invested elsewhere. New venture-based startups that actually represent new forms of offerings, something easily touted but hard to do, may be the exception.

   Provider-sponsored plans may actually be one of the types of startups with a chance of succeeding, at least to some degree. Large health systems that have market power also have good margins and the ability to provide the financial backing to keep a new plan solvent through the ups and downs of any new plans startup period. Large numbers of hospital-employed physicians also mean better potential for managing utilization, and they have near-instant name recognition. Of course their inherent weaknesses, for many at least, remain: massive cultural inertia, organizational and management performance incentives based on high utilization and operating margins, more desire to “cut out the middleman” than to do what it takes to be one, little understanding of the financial management or risk, little experience in managing physicians, being an adverse risk magnet, and…well, that’s enough for now. But each and every one of those potential weaknesses can be dealt with by a health system willing to do what it takes. That, and a little luck.

   Startups that are based on joint ventures with existing payers may also have a decent chance of succeeding, assuming they too are able to address the inherent risks noted above. This is especially true when the new JV is focused on a market segment that the payer is willing to back away from. For example, a payer may want to focus on large accounts and self funded business and leave the small and individual markets to the new JV.

   Finally, there is still plenty of room for growth in Medicare and even Medicaid. A good argument may be made that it makes more sense for a health system to become a Medicare Advantage plan than an ACO; with the same concerns addresses as above.

   * The 1980s, dudes and dudettes! It was like totally gnarly, tubular to the max. Not like all gag me with a spoon…psych!

   Peter R. Kongstvedt MD FACP
   [Principal, P.R. Kongstvedt Company, LLC]

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4. Lindsay Resnick, on May 8, 2016 at 11:38 PM said:

   Innovation

   Today’s health care “system” is not a system at all. It’s a fragmented compilation of fiefdoms that don’t work well together – siloed communications, disjointed incentives/disincentives, “members & patients” not customers, and an infrastructure built around sickness and illness.

   What we’re beginning to see from startup health plans is a long overdue transformation that may actually result in a health care system – primary care centered delivery models, value or outcomes-based payment schemes, retail-type customer experiences, and innovative frameworks fostering prevention and wellness.

   Forget what we call them, Exclusive Provider Organizations, Narrow Network Plans or HMO-light, success of these new ventures won’t come easy, especially as they fight an uphill battle against the industry’s mega-plans. With 37 Blues covering 100+ million and consolidation among the Top 5 health plans tightening the health insurance oligopoly, small startups have their work cut out for them.

   Successfully balancing premium adequacy, growth strategies, and expense structure is a daunting challenge. As a startup, it also means going in with your eyes open, particularly with government as your business partner (i.e., ACA, Medicare, Medicaid). That’s a world of “unknown unknowns” which we’ve seen change markets such as risk adjustment rule shifts and program funding or rate promises never realized, it’s part of the game.

   New health insurers must labor to achieve critical-mass economies of scale and manage medical claims risk, so that sustainable profitability is a reality, not an illusion. Here are a few keys to success:

   Pricing discipline – It has been the demise of many an insurance company – low first year pricing that “we’ll make up on renewals”…never happens. You can’t sell a dollar loaf of bread and expect to make it up later. Rate adequacy is essential to a workable insurance endeavor. Actuarially sound pricing and risk management is the ultimate key to success. It may mean slower growth, but it will mean profitable growth!

   Micro-segmentation – Knowing your prospective customers better than your competitors will go a long way toward attracting…and keeping profitable customers. Collect, ingest and analyze customer data to inform strategy by market, product-line & sales channel. Where do you find them? What’s important to them? What’s their “path to purchase”? Why should they want to do business with your brand?

   Scalability – A “build it and they will come” attitude because your innovative startup is the next best business model is a false growth platform. It takes leveraging knowledge and insights about potential customers and building a cost-efficient, omnichannel distribution machine…give your prospects multiple options with consistent, seamless experiences to shop, engage and purchase your benefit plan.

   Customer experience – Let’s face it; tomorrow’s healthcare customer is in control. They want experiences to be on their terms, not yours. They have an abundance of choice and their experiences as your customer will determine how they define your value and your brand. Every “touchpoint” throughout the lifecycle must be managed to drive an integrated communication stream that empowers, engages and promotes loyalty (and for you, maximize LifeTime Value).

   So, whether we call it retailization, uberization, or consumerization of healthcare, can startup health plans succeed, yes, with strategic discipline, operating excellence, and commitment to superior customer experiences. Reality also tells us that success requires stakeholder commitment and financial backing significant enough to achieve the short and long-term market advantage necessary to go head-to-head with tough, mega-plans that in many instances are creating their own innovative startups.

   Lindsay Resnick
   [Chief Marketing Officer]
   Wunderman Health

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5. Dr. David E. Marcinko MBA, on January 6, 2017 at 1:23 PM said:

   Critics Blast Star-Studded Advisory Board of Anti-Aging Company

   Should seven Nobel Prize winners lend their names to an anti-aging firm whose product is unproven in humans?

   Elysium Health started two years ago to market $50-a-month subscriptions to a nutritional supplement called Basis, whose ingredients can extend the life span of mice. There’s no proof the supplement pills can do the same for people, so Elysium can’t legally say that.

   But, the company does have an unusually long list of 35 “scientific advisors,” including Nobel laureates, who lend their credentials to the company. And, as we report, critics argue that they are in effect being used to boost sales of what could be a placebo.

   “Some of these people may think that they’re being asked to do this because of their deep insights,” says former Harvard Medical School dean Jeffrey Flier, an expert in metabolism. “That’s the part that’s a joke. They’re not. They are part of a marketing scheme where their names and reputations are being used.”

   MIT Technology Review via Dr. David E. Marcinko MBA
   http://www.BusinessofMedicalPractice.com

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