How One Venture Capital Executive Sees the HIT-Fueled Future of Patient Engagement
What does the current moment in the healthcare information technology vendor sector look like, from the point of view of the venture capitalists who are busy deciding where to invest dollars in that sector?
John Gardner, of the San Francisco-based NGP Capital, has some thoughts. NGP Capital’s description of its scope on its website includes this statement: “We invest in high growth companies that have demonstrated product-market fit, sustain strong customer engagement and have a proven business model. Our typical initial ticket size ranges from $8-12M with extensive capacity for follow-on investments. Once invested, we work actively with our entrepreneurs and companies to help them succeed. We are here for our companies to accelerate their growth and help them navigate new territory through our global network within the technology industry.”
Gardner, a partner in NGP Capital, who “has led and managed investments in companies across the information technology spectrum, including enterprise software, carrier software, systems and component companies,” recently made some points, following his participation in the annual HIMSS Conference, held at the beginning of March in Las Vegas. Through his press representatives, Gardner shared the following points with Healthcare Informatics:
> Patient-centric engagement models are becoming table stakes, but a seamless patient journey is still a dream. Customer engagement is an absolute requirement for organizations across the board: hospitals, payers, and pharma have all accepted this at least to some extent. Despite this, the patient journey is still convoluted and far from the seamless customer experience of other industries.
> Data harmonization, specifically, is something that is top-of-mind for specialized data players, as this is necessary to apply any sort of insightful ML/AI tools to population health data. The urgency of interoperability is seen particularly by moonshot players (e.g., precision medicine companies) with innovations that currently outpace many EHR vendors, the former of which requires evolutionary leaps of data standardization, integration, and sharing to reach full potential.
> As digital health continues to evolve from a new phenomenon into a more mature space, players have readjusted their expectations for what can be feasibly achieved. While many of these companies may not be as striking as players that were hyped in the earlier days of digital health, many of the latter have fizzled because they were simply too ahead of the market.
> In a world where data breaches have become commonplace, it is not surprising that healthcare companies have ramped up cybersecurity efforts. While security is not a debate, certain advanced methods, blockchain specifically, have created a division in beliefs. Only time will tell how and to what extent healthcare leverages block chain.
> Digital therapeutics is an area with the potential to disrupt healthcare as we know it today. This has been accelerated by trends toward FDA approval of these offerings – which companies like Pear Therapeutics have achieved – as well as getting approval from CMS and other payers to be reimbursable offerings.
> Telehealth has become status quo, with an increased acceptance of alternative care modes by providers and payers. This is encouraging for nuanced forms of telehealth – namely AI-powered chatbots, such as MDLive’s new product – while they are still emerging technologies, their predecessors have helped pave a path for accelerated adoption.
Following the release of that statement, Gardner spoke with Healthcare Informatics Editor-in-Chief Mark Hagland about his perspectives on the current healthcare IT market. Below are some excerpts from that interview.
Tell me a bit about NGP Capital, and its involvement in the healthcare information technology sector.
Our firm is a global venture capital firm active in the United States, Europe, and China, with over a billion dollars under management. And we are thematic investors, meaning that we pick two to four segments that we really try to understand—industries being disrupted by technology, with the disruption creating opportunities for small, private companies that could disrupt. And we want to invest in five to ten companies over a period of three to five years. And we want to develop proprietary knowledge in those industries.
John Gardner
I have colleagues focused on smart enterprise or industrial IoT; others focused on smart cities or smart logistics. Our core team is focused on digital health in the U.S., Europe, and China. We’re not doing pharma, biotech, or heavily regulated devices. Instead, we’re focused on two things: one is the increasing ability, with phones and sensors, and the ability to connect those to the cloud—from a digital therapeutics and patient engagement perspective, that there are tremendous amounts of opportunities within those sectors to better manage chronic care issues; better health and wellness; prevention, etc.
And there’s another category where the more recent digital transformation of healthcare creates opportunities to improve provider workflows, again through the lens in particular of where provider workflows meet the patient before, during, and after care, and around creating that patient loop and capability to improve care over time. That’s the part of digital health that we’re focused on. Three colleagues here, three in Europe, and three in China, are focused on digital health.
How long have you been focusing on these areas?
We evolve our themes over time. It’s been about four years. I have a long background of investing in applied data and analytics. That was the entry path into looking at healthcare as one of those verticals, and about four years ago, we decided that the industry was starting to open up, and that there were opportunities for change and disruption that hadn’t previously existed.
What other vertical industries is your firm active in investing in?
Retail, logistics, telecommunications, are all vertical industries other folks in our firm are focused on.
Where do you see the potential for disruptive technology around patient engagement?
It’s not so much that there’s disruptive technology from the standpoint of novel technology; the question is the ability to execute, by involving and incorporating the patient in healthcare as an analog to how the consumer has been engaged in almost every other industry. The ability to execute on that is where the value is unlocked, and the potential to affect outcomes can be driven. There are some things that might seem obvious, but get overlooked in this conversation. Whether you’re a startup or an established company selling into this space, with CIOs and others looking to develop the technologies and platforms from their perspective—there are a lot of large enterprise software providers in other industries, that provide very sophisticated technologies for reaching consumers, or employees—or in this case, patients. But typically, those technologies require some level of investment in integration with the end-consumer.
In healthcare, systems don’t typically have large budgets or teams of IT professionals to do meaningful integration. I call this the last mile. The Amazons, Googles, and Microsofts of the world are great at bringing the solution into the parking lot, and someone else brings it into the building. Healthcare is not well-situated to bring the solution into the last mile. There’s a huge opportunity for companies that can do that.
The other dynamic, and this goes for people inside and outside the industry, they frequently talk about how a solution will work well with provider workflows, the provider only has to spend ten minutes a day to look at additional records or whatever. But there’s already a deficit, and unless something’s actually going to save time, it’s unlikely to be implemented. So solutions that are great in theory—it may be great on the patient side of the equation, but all that engagement on the patient side won’t be connected back into the system meaningfully if it doesn’t connect into provider workflows.
And the last thing is, and this was really reinforced in a lot of the conversations I had at HIMSS—and I’ve been going there for four years—and at first, there was not even a lot of conversation about being relevant to have a lot of direct connection with consumers. And the idea of having some sort of CRM relationship with patients was really aspirational. But now, patient-centric relationships is at the top of most providers’ wish lists. But even providers that have invested into this, come from the perspective that what’s required is a very slick mobile application, user-friendly, pretty, lots of bells and whistles, and an ability to have some recognition from the provider that will encourage the patient to download the app. And there is the reality that the downloading of the app is just the first step in the journey. And from our perspective, the opportunity is around what is required is the ability to sustain patient engagement and to sustain patient engagement with the provider. Outside healthcare, it’s well understood that sustaining consumer engagement over long periods of time is a data science exercise; that you really need to focus on how to keep the consumer engaged with your platform. In healthcare, there needs to be a sustained understanding that downloading the app is just step one.
It really requires sustained engagement. And vendors who understand the patient experience, will be successful; and from a provider perspective, the ones making purchasing experience with all that understanding, will be the ones that are satisfied over the long term. A couple of pundits were talking about the common conversation at HIMSS and one was talking about frustration with the lack of ROI around electronic health records; but to ultimately achieve ROI in the investment around patient-centered engagement, you have to have a very specific plan, and embrace the concept of sustaining patient engagement over time.
Companies that take a data-driven, consumer-engagement approach and focus on sustaining the engagement with the consumer over time, are successful. Providers are looking to work with third parties, or even if they’re working on it on their own, in order to focus on the patient journey, in their practices—large numbers of providers in particular, but also some of the vendors, are looking at the downloading of an app as the endgame. That’s absolutely incorrect; it will only lead to frustration and failure over a long period of time.
Are we talking about care management, in that case?
Yes, but when you’re talking about the standard CRM [customer relationship management] and care management approaches that a lot of providers are implementing, including preop, and postop handoff to rehab—looking at the whole patient journey around joint replacement, for instance, a lot of the efficiencies and improved outcomes that are promised by the concept of the 360-degree loop, and developing a long-term relationship, keeping a patient engaged throughout the cycle, requires a data-driven approach to monitoring the engagement, and there’s the ability to look at the level of engagement, and to intervene to react. What’s needed is a data-driven approach to sustaining that approach.
With regard to how multi-specialty group practices operate, what would you specifically recommend that those practices do, in this context, particularly around joint replacement procedures?
All of these larger groups are rolling out some sort of CRM with their patients, which is step one in this. Step two is specialty-specific engagement. So it really depends on what the objectives are and how deeply integrated a practice is. But joint replacement is an example that’s easy to understand; being able to correlate the data, and understand that a primary care relationship has existed over a longer period of time, is valuable. And you need a seamless handoff from a general relationship that a provider might have, and be able to not just transfer records, but be able to transfer the relationship to the orthopedic organization.
But in terms of utilizing the preop content, and aggregate data recommendations, etc., to make them available to the patient, and discharge instructions, compliance and scheduling, those are increasingly being integrated into an app with a direct connection to the patient—there needs to be a resource in the background to make sure the patient is making use of the patient. In other industries, you do testing to see what’s working. And as the patient is engaged with the platform, there are opportunities to intervene with the patient and get them engaged with the app; and if that’s not working, you can intervene more fully. So the idea and the concept is, we provide this platform, and then the patients will make use of it, and it will happen on an automated basis. But that’s no different from doctors prescribing drugs and then being frustrated that the patients aren’t taking their medications.
What does this translate into, operationally speaking?
I think that this translates into embracing this as a requirement. That it would be a requirement that it be a discriminating factor in vendor selection—companies that have a well-documented, data-driven approach, including cohort analyses that can show how they can manage and extend patient engagement over time. Otherwise, there’s a high risk of selecting a vendor that won’t be satisfying. And architecturally, there has to be a monitoring and management module for the system, that takes these data-driven philosophies—and there are KPIs, and individuals with responsibility for managing, maintaining, and improving patient engagement as part of the success criteria for the internal project. And as I’ve often seen, most of the focus is on some engineering team developing a slick mobile app that customers will be intrigued enough with, to download, and there’s not a person of significant responsibility and stature in the organization, who is responsible for ensuring that patients actually engage with it over time.
Historically, that would be a nurse case manager, correct? Or are you thinking of a different role or title?
Well, I’m actually looking at the system level. Ultimately, as we discussed before, it does have to work seamlessly with provider workflows, and that does relate back to the nurse or manager who’s looking at charts. So there should be some sort of radar screen or some sort of patient application that they could refer to, if needed. But it shouldn’t require brand-new patient protocols from the provider perspective. I’m talking about someone under the CIO.
Are you talking about some sort of applications manager, then?
Yes, only not someone just two years out of college.
Is this someone in clinical informatics, or someone on the technology side?
It would have to be somebody who is sufficiently experienced in understanding engagement with patients. It’s more at a population level.
In many organizations, that might presumably encompass data analysts and similar roles.
Yes, somebody who’s actually managing the platform or system from a data-driven perspective, setting certain KPIs, such as the average number of days of engagement. For instance, the average number of patient days of engagement with this app is 100 days and we have to get that to 200 days. So that’s not a nurse case manager. And it’s not an applications person; it’s someone engaged with population health, and someone who is responsible for managing at the aggregate level. And that approach is remarkably absent in most provider organizations. The developer is working in a high degree of isolation from the system results, as far patient engagement.
The operational challenge for the leaders of smaller medical groups is that those smaller groups won’t even have people like this, to begin with.
Perhaps the smaller groups could outsource this to a third party, and require that that third party manage this.
So this is really a data analytics-driven set of processes, then?
Yes, though if it’s just about observing granular data around what’s working or not working, that’s not sufficient. It has to be more than just analysis, you need to drive success as well; you need someone with responsibility for sustaining patient engagement.
What should CIOs and CMIOs do in order to encourage executive management to release the funding for an enterprise like this?
There’s always a high degree of politics in situations like this. But while this was a strategy conversation two years ago, the budgets are already being created now for patient engagement efforts, and they’re in the hundreds of thousands to even few millions of dollars in terms of resources. And if all you’re going to do is to build an app, and you’re spending high six figures to do that, that will be a waste of money. So if it’s an extra $250,000 a year to hire someone new, or if you have to shuffle resources in order to make this happen, that investment in the technology will go to waste. And somebody now in the c-suite is working on strategies to create patient engagement, which means that it’s already in a lot of these budgets. But they’ll be very dissatisfied with the ROI, if they don’t put somebody responsible for driving ongoing engagement, in order to achieve a KPI. And whether that’s a third-party vendor or adjusting a job title, I just believe that this is an element that’s absolutely necessary for success.
How might all of this evolve forward in the next few years?
I believe that interoperability remains a barrier, even within the walls of a specific system. So there’s a whole other conversation around how to break down the barriers to interoperability, with regard to this. I also think that there are multiple models for patient engagement. A company called Stealth is working with Providence Health, for example, to create a platform that’s integrated with the IT infrastructure in places like Providence, that allows doctors to prescribe digital therapeutics—the coaching, the texting, the constant engagement around compliance, whether it’s in terms of diabetes or COPD, etc., in a methodology for being able to prescribe things or patient recommendations, directly to the consumer, in a single platform, for being able to implement third-party solutions and being able to make them available for doctors to prescribe. In the near term, those are the types of things where you’re really going to start to see some of the more impactful implementations of patient engagement.
