Matt started his talk by reviewing some recently released Commonwealth HC data that shows the US ranks last in quality metrics and is the most expensive health care (HC) in the world by far.
A bit of health care history
Matt then reminded us what the HC environment looked like in 2007 when PF was founded:
- 7% of docs used EHRs
- 60% of bankruptcies were due to medical bills
- 55 million Americans were uninsured
- 10-15 standards for interoperability (meaning there were no uniform standards)
- The 1st generation iPhone was being released)
Then came the recession, the stimulus bill (ARRA) and eventually Obamacare (PPACA).
By 2014, the environment is very different:
- 40% of docs are now using EHRs daily
- 0% of bankruptcies are due to medical bills
- 19 million more Americans have health insurance (as a result of expansion of Medicaid, allowing adult children to stay on their parents policy, and enrollments in Obamacare)
- A new HHS bureaucracy, the Office of the National Coordinator for Health IT (ONCHIT), has helped us get to 3 uniform standards to drive interoperability (i.e., EHRs can now talk to each other)
Advice for start-up entrepreneurs
During this time, PF has grown rapidly, and, per Matt, is now the nation’s largest patient-physician platform with 82 million patient lives and 110,000 medical professional logging in every day. Matt closed the presentation by sharing the three things he tells entrepreneurs.
1) Find the avoidable
Go where the money is being spent, find the waste and squeeze it out. People will pay you to save money. For example, according to a New England Institute Study, we spend $310 billion per year on poor medication adherence or 14% of the total health care spend. Perhaps that is why you see so many digital health companies trying to design tools that can be shown to improve adherence and reduce this wasteful cost.
2) Be agile, try many things
You need to experiment and not just in the arena of software development, but in every possible way within the organization. With respect to soft ware development, a company should be nimble when it comes to improving the product. This means continuous cycles of “release, iterate, get feedback, improve the product, and release again.” He says PF releases an update about every 2 weeks, sometimes as frequently as every week. This is in stark contrast to other EHRs that have once per year updates.
Pivots are a part of being agile. If you haven’t seen it, be sure to read Scott Adams’ (creator of Dilbert) blog post on the topic. PF made two major pivots before rolling out its first product. Matt says the company started out to develop a practice management system but soon found that market was saturated. They pivoted to an EHR. Then initially rolled out a product that they charged $15o/month for docs to access. But the docs complained and tried to get them to lower their price (“how about if I give you $20/month). It became clear to the founders that they needed a different business model, so they made the product available to the docs for free, making money instead on advertisements. After that the company took off, per Matt, the hockey stick began.
3) Aim for incremental behavior change
Back when PF started only 7% of physicians were using EHRs on a regular basis. It was unrealistic to expect that all physicians would start using EHRs every day for every patient in a short period of time. It was simply too much of a change to physicians’ work flows. So we aimed for incremental behavior change instead, rolling out different aspects of the platform over time. Matt thinks this was one of the primary reasons for PF’s success.