systems; Potholes and Pitfalls on the road from customer to partner

1. Partnering with Health
Systems:
Potholes and Pitfalls on the road from
Customer to Partner
Ilan Rubinfeld, MD, MBA, FACS, FCCP, FCCM
Henry Ford Health Systems, Detroit, MI

2. Usual Disclosures and Proactive Apologies
 I have nothing to disclose.
− NO: industry relationships, funds-flow, consulting deals, money laundering
schemes, shareholding arrangements, or other creative ways to be “bought” …
oops was that out loud?
 Aside from some federal government research grants, I receive no other
salary then my Henry Ford Medical Group Salary,
− where we take similar oaths to being a priest… obedience, poverty, chastity, etc.
 The opinions expressed here reflect those of the speaker only and not
Henry Ford Innovation Institute, or Henry Ford Health Systems
 I am a surgeon, and prone to using foul and inappropriate language, I will
try to be on good behavior for the hour, in short this will not be “Ivrit shel
Shabbat”)

3. Plan for the Talk
 Discuss inherent differences between Startups and Healthcare
systems
 Examine the conflict and friction points that emerge from these
differences
 Strategize about means to find common ground and run
successful projects.

4. Unlikely Partners

5. Startups are
from Mars,
Hospitals are
from Venus
By: Ilan Rubinfeld
Published 2018
No issues printed, 100% sold-out!

6. Unlikely Partners
•Startups
• Pace: Nimble
• Risk tolerance: High
• Drive their future
• Horizon: Tomorrow or sooner!
• Often 1-2 years with secure
funding
Expected value perceived:
• Huge ($Gazillion)
• Expected value: $0.00
•Healthcare Systems
• Pace: Slow, deliberate
• Risk tolerance: NONE!
• Respond to crisis and mayhem
• Horizon: decades, or next
budget cycle
• Expected Value:
• Typical boring old world company
• Low discount rate (Lazy Banker?)

7. The Startup Focus
 MVP: Minimal Viable Product
 Need a “lighthouse customer”
 Milestones prior to next funding round, where you continuously
lose your company to the “vulture” capitalist
 Scope creep is the enemy
 Focus more, focus more, do less and focus more, ie tighten the
product
 Shift the burden of failure to the customer
 Recycle your code or die (product can only appear to be
customized)

8.  When all you
have is a
hammer
everything
looks like a nail!
 Your VC for good
reasons is
focusing you on a
single very
specific
hammer… solve
one problem,
make one
product.... Focus!

9. Headlines you are not likely to see any time
soon…
 Healthcare system stock split! For second time in two years!
 Provider group share price sets new record
 Hospital group splits up to assure everyone makes even more
money!
 Venture capital firm doubles down on Local community hospital!
 Second round funding on family practice clinic!

10. Health Systems are Risk Averse
 My introduction to finance professor (Ronen Israel) use to refer
to the Lazy Banker who would not take any risk. Healthcare
makes them look like complete gamblers.
 They are often the backbone of the community.
 The trusted partner in the community.
 They cannot fail.

11.  Hospital care is an important component of the health care
sector. Hospitals:
− Employ more than 5.7 million people.
− Are one of the top sources of private-sector jobs.
− Purchase nearly $852 billion in goods and services from other businesses.
 The goods and services hospitals purchase from other businesses
create additional economic value for the community. With these
“ripple effects” included, each hospital job supports about two
additional jobs, and every dollar spent by a hospital supports
roughly $2.30 of additional business activity. Overall, hospitals:
− Support 16 million total jobs, or one of 9 jobs, in the U.S.
− Support more than $2.8 trillion in economic activity.
/www.aha.org/statistics/2018-03-29-hospitals-are-economic-anchors-their-communities

12. Hospitals are not all alike
 Big and Small… mostly small
 Increasingly algined or owned
 Increasingly for profit
 Urban, Sub Urban, Rural
 50 beds... 100 beds... 1000 beds
 Subspecialty Only (Ortho or spine for example)
 Referral, or Tertiary Care
 Teaching, University Affiliated, Research base
 Safety Net

13. Location and teaching
status
Hospital bed size
Small Medium Large
Northeast region
Rural 1–49 50–99 100+
Urban, nonteaching 1–124 125–199 200+
Urban, teaching 1–249 250–424 425+
Midwest region
Rural 1–29 30–49 50+
Urban, nonteaching 1–74 75–174 175+
Urban, teaching 1–249 250–374 375+
Southern region
Rural 1–39 40–74 75+
Urban, nonteaching 1–99 100–199 200+
Urban, teaching 1–249 250–449 450+
Western region
Rural 1–24 25–44 45+
Urban, nonteaching 1–99 100–174 175+
Urban, teaching 1–199 200–324 325+
Table 3Hospital bed size categories

14. Changing
reimbursements

15. Customer Perspective: ”Dumb Healthcare
System”
 Make vs Buy
 The price is too good to be true
 The price is more then I can afford
 What is the total cost of ownership?
 Will my team end up educating the vendor at my expense?
 This team is all younger then my children, and I would never give
my children a million dollars a year
 I have lots of positive ROI or NPV projects, I just don’t have
enough capital for all of them

16. Vendor Cycle of Doom
Buy New Shiny
Product
Plan quickly
Ignore:
People/Proces
s/Technology
Non robust vendor
guidance for
implementation
Over spend on
implementatio
n
Underspend on
support, roll out
and educationCatch up or
never finish
rolling out
Start asking for your
data back
Internal analysts &
reports get better
Reprocessed vendor
data better then
vendor
Have an ugly
divorce
Get rid of
internal folks

17. Some Activities that exacerbate the
relationship
 What are some tools and tricks that bother the purchaser?
 How are you driving them away even as you seek to enhance your
features and grow your market?

18. Quick perspective on patient rights and
engagement
Nothing about me without me

19. NO separate logon, separate user
accounts, separate apps,
separate websites!
Work with me, make me look good.

20. Don’t compete with me
 Separate login
 Separate website
 Branded content transparent to the patient…
 That all makes me look weak and lacking in capabilities, which
may be true, but I would rather you not make that so clear to my
patients.

21. Don’t call me a partner, unless you mean it
Customer and Partner are different things
 Sales relationships are all now called “partnerships”, there seem
to be few customers and self identified salespeople
 If you call me a partner… what does that mean?
 Be transparent about what you are giving and what you are
getting.
 If you are just selling product and moving on, thats ok, just be
honest about it.

22. Realistic Total Cost of Ownership
 Go beyond your software or service…
 What will this really cost?
 Poeple? Servers? Build on our side?
 Maintenance... Our FTEs plus your annual fees....
 What will this really cost?

23. Don’t avoid the knowledgeable people in
the organization
 Some sales teams carefully create a room full of people who will
not understand
 Some sale groups on purpose make sure that nobody competent
is in the room.

24. Your best friend may not be who you think
 The jerk from IT at the back of the room asking all the intrusive
questions with attitude, may be the most important person you
meet
 They give your sales team and presentation the critical feedback
you need, often with ”no holds barred”
 They are likely the person who know the biggest roadblocks and
issues and the best work arounds for that insitution

25. Understanding the Socio-Technical Model:
The over simplified version
 People: Who? How many? How trained? What kind of people?
 Process: When and How? How do they work? Whats the
workflow? Map this back to the People.
 Technology: your software, hardware, methods, madness…
 IF the project plan doesnt take all into account... This will not end
well.

26. If implementation is tough… and it usually
is... Plan for it!
 Its OK to offer discounts and rebates for excellent
implementation.
 Epic does it… used to be called “good install”, now its the “stars”
program.
 If you know best practice and success factors for you products
best approaches to implementation.
 Encourage your customer with discounts, savings, rebates... We
know you charge more up front for it, but we will get into the
game and compete for your approval!

27. Realistic implementation plans and projects
 Depending on your customer they will possibly need additional
PM resources to pursue your project
 Or worse, they will make do with what they have
 Having realistic, and implemntable project plans… detailed and
workable can help jump start the projects, keep it on course, and
lead to success.
 Nothing worse then 6-12 months of struggling only to lose the
deal prior to final implemntation... Yes it happens!!!

28. Security
 Know your stuff…
 You are “consistent with a HIPAA compliant solution”, there is no actual
certification, the insitution must decide itself, its up to you to be
knowledgeable and a good partner.
 Our security review comes not via IT, but a group that reports through
legal... So its a different culture.
 Be prepared and knowedgebale when somebody asks if you will sign a
BAA. You should have a plan with your attorneys and an answer.
− With a small hospital product using your cloud may be appropriate, but puts YOU at
risk
− With larger systems, consider placing a server/appliance type solution inside their
firewall.
− In general, its bad manners to take over the system from that server

29. ROI tools
 Of course we don’t believe you!
 Be careful of exuberant claims, they can hurt your credibility.
 Need to be very precise in categorizing the return
− Unless you are selling something involved with new revenue streams, you
are a cost, which needs to be balanced out.
− If you are selling something for a cash business… ie something that will
improve cash-paying workflow

30. What kind of results sell
products?
The return does not need to be
direct lives or dollars… but it
should be pretty close

31. Understand your customer and their
economics
 This is absolutely a basic tenant of all business, yet sadly very
commonly overlooked.
 How will they pay for it? What are their finances? What and how
do they spend money?
− Don’t sell things that a hospital buys to individual doctors, if the finances
don’t make sense the hospitals will oppose you
− The doctors will fight for it or threaten to leave… is not a good business
plan
 Do you understand DRG? Bundle payments? Fee for service?

32. Beware of fighting giants and gorillas
 Is there an Epic or Cerner product that currently does this?
 If you plan to outperform a giant…there are different things you
need to do...
 What is your incremental value? What do you do better and how
much better? Can you find a niche?
 There are SO MANY synergies to doing a worse solution in the
same platform... Why is it worth going to a new solution?
 Remember that a mediocre, often bad, epic solution beats yours
almost always...

33. Case Example of an awesome Niche: Stanson
Health

34. Case example: Choosing Wisely
tools from Stanson Health
 Enhanced content on an EPIC platform
 Leverage existing build and enhance it, truly made it better
 Give us new content and build “auto-magically”
 Cost is low enough, we just can’t afford to maintain our own in
comparison
 Clearly the only limitation of our value from this project is our own
ability to disseminate the results…
 Content and analytics, the analytics works for OUR content as well

35. Your going to need some kind of CMO on
your team
 Medical credibility is essential
 Your CMO is immediately suspect as a “sell out”, you will need
countermeasures to assure credibility
 Little things you say in the presentation get magnified and hurt
your credibility
− Rare diagnosis as if they are common
− Giving a medicine team a surgical example and vice versa
− Talking about revenue and charges when its an item rolled into a DRG

36. Your dentist, doctor, chiropractor neighbor
may be brilliant…
 Healthcare is super complicated
 Knowing more then you about healthcare and medical
knowledge may be a start, but do they know enough and have
the right skills, background and experience?
− While doctors know how to work long and hard
 Medical leadership is very different then Medical care
 Provider leadership/medical staff leadership is very very different
then hospital administration or operational leadership.

37. Domain and Content Knowledge can be
more complex then you think…
 Medical leadership is very different then Medical care
 Provider leadership/medical staff leadership is very very different
then hospital administration or operational leadership.

38. Think More functionally about your market
Segments
 A small hospital with a handful of analytics folks needs a solution
that covers everything… broadly...
− Do they really need the BEST EVER READMISSION PREDICTOR?
− Or are they a good customer for an ICU management tool? Sepsis tool?
Invasive hemodynamics technology... If they only have 5-10 ICU beds?
 IF they are sending out half the interesting labs... Are they going
to do Next generation gene sequencing?
 Maybe the segment is reference lab yes/no... Or no analytics,
weak analytics, big analytics in house... Or sophisticated value
purchaser vs likes glossy brochures...

39. Annoying sales behaviors you should
eliminate today Pushy
 Over the top
 Rude
 Insulting
 Condescending
 Argumentative
 Sales people who look good but don’t know the product or the
industry

40. Finding Common Ground: Getting to Yes
 Separate the People from the problem
 Focus on interests, not positions
 Learn to manage emotions
 Express appreciation
 Put a Positive spin on your message
 Escape the cycle of action and reaction
 Harvard Program on Negotiations (www.pon.Harvard.edu)

41. Maybe a little applied active
empathic listening?
 What problems can I solve for you?
 How does your finance department
calculate an ROI?
 What is most important to you and your
Health system?
 What make a project a success here?
 How have vendors disappointed you in
the past?
 What worries you about this project?