Introduction
[00:00:02] Stacey Richter: Episode 430 "Advice for Digital Health Vendors Selling to Employers". Today I speak with Barbara Wachsman,
American Healthcare Entrepreneurs and Executives You Want To Know Talking. Relentlessly Seeking Value.
Transitioning to a New Topic: Digital Health Solutions
[00:00:28] Stacey Richter: We have been spending a bunch of time here on Relentless Health Value talking about PBMs lately and pharmacy benefits, but we are moving into a new topic area. It sort of kicked off three weeks ago with the pod with Rik Renard on the importance of care flows if you are a digital health vendor trying to get consistent outcomes.
But then I actually went back to the PBM Pharmacy Benefits topic to talk with Luke Slindee and Julie Selesnick, because you know, the J&J lawsuit. But now we're back on the let's talk about digital health and point solutions bus.
The Importance of Selling to Employers
[00:01:02] Stacey Richter: I wanted to talk today about the trend to sell to employers and advice for digital health solutions who want to sell to employers, but there's a little bit of advice here for employers, themselves.
At a minimum, this conversation affords a little bit of transparency to employers about what's going on, on the other side of the table. So as I just said, today we talk about selling to employers. Why sell to employers is probably a first question. Well, one reason Barb offers is because that's where the money is.
It's like that Willie Sutton quote. Someone asked him “why he robbed banks?” And he replied “because that's where the money is.” I mean, hospitals know this. Have you seen their commercial rates and their multiples over Medicare? Payers know this too. Payers who use their ability to raise commercial rates as leverage to get lower MA rates, Medicare Advantage rates for themselves. They know this.
So yeah, why wouldn't a point solution entrepreneur take a page out of that business model? It's saying the quiet part out loud, but yeah, I guess it's good to know when you're the numero uno healthcare industry sugar daddy or sugar mommy as the case may be. Every employer listening right now has already opened up their phone and started an email to me.
Advice for Entrepreneurs Selling to Employers
[00:02:13] Stacey Richter: Barb gets into four pieces of advice for entrepreneurs looking to sell to employers. Here's piece of advice one. Number one, there has to be a market that has a need for what you are selling. And there won't be a market with a need unless the problem you're solving for is big enough. And right now I am recapping things that Barb says on the show because when she talks about whether the problem is big enough, she means as per the employer and mainly because the fallout from that big problem accrues to the employer in a way that the employer fully appreciates.
As I say in the pod that follows, the ground is littered with entrepreneurs, often really smart people who oftentimes I truly admire. These are individuals who found a problem for patients or sometimes even clinicians and solved for it and then discovered that no one will pay them for whatever they've done because we can't forget that in the healthcare industry, one person's waste is somebody else's profit.
There is show after show here at Relentless Health Value that showcases the sacred honeypots where these perverse incentives lie. So if you are an entrepreneur, please follow the dollar and see where it leads before getting too far. That would be my advice. I'd recommend the show with Rob Andrews and the one with Jodilyn Owen as a great place to start.
One comment about the whole It's gotta be a need that employers appreciate point that Barb makes, which caught my ear. She rhetorically asks, should HR purchasers be buying solutions that improve health and well being? And the short answer is no. Barb says none of that should be the primary driver. The primary driver, Barb mentions, should be about optimization of human capital to drive business outcomes.
She says every decision a business makes should be about maximizing business outcomes. Now, I could take this a bunch of different ways and viscerally it has, again, kind of a quiet part out loud vibe, but in certain ways it also means buying decisions should be bigger than just cutting costs. I mean, first of all, no one is arguing here that cutting wasteful spending isn't always a good thing.
But neither are cost containment strategies that undermine employee health to the extent that they can't complete their work role or their job. Listen to the show with Nina Lathia for more on this cost containment versus value based purchasing, specifically in the pharmacy benefits space, but same rules apply pretty much everywhere.
Here's number two piece of advice that Barb offers. Be truly differentiated in terms of what you're trying to sell. Barb gives a bunch of examples of secret sauces she thinks are compelling right now. Number three piece of advice, navigate the internal politics of the employer. And this is kind of selling 101, but find a champion and help them navigate their own organization.
We talk at length about how long the sell process can take, especially in some of these jumbo employers. And then lastly, number four, manage your investors as closely as you manage your possible clients. And this is an interesting point that also comes up in the conversation with Kate Wolin, that's coming up in a few weeks.
Also in this conversation, we have a sidebar about PMPM, per member per month and performance guarantees, and just some nuances about how to get paid.
Oh, and one last point here. If you are an entrepreneur who is thinking about selling to brokers, employee benefit consultants or practice leads, do listen to the show with AJ Loiacono, which I encored a couple of weeks ago.
Understanding the Healthcare Industry and Its Profit Centers
[00:05:48] Stacey Richter: My guest today, Barbara Wachsman, has had experience in every single element of the healthcare ecosystem. She has worked in public health. She's worked for an HMO. She's worked for a hospital system, she's run benefit consulting practices, and also spent the last dozen or so years at Disney running strategy and benefits.
Today, she is a limited partner in several private equity funds at Frazier Healthcare Partners.
My name is Stacey Richter. This podcast is sponsored by Aventria Health Group.
Oh, and hey, you might want to subscribe to our weekly email, which includes this introduction transcribed, as well as links to the full episode transcribed.
We also sometimes send out invitations to Zoom meetups and other ways to get involved or support us in our quest to get Americans better healthcare. So go to relentlesshealthvalue.com and get yourself on that list.
Here's the conversation with Barbara Wachsman.
Conversation With Barb Wachsman
[00:06:41] Stacey Richter: Barb Wachsman, welcome to Relentless Health Value.
[00:06:42] Barb Wachsman: Thanks.
[00:06:43] Stacey Richter: First, it was in fashion to sell to health systems and practices and that morphed into why don't we just sell directly to employers. So I think this is an area of growing interest for entrepreneurs. So first of all, why do you think people have cottoned on to the idea of selling to employers and is this a decent thought?
[00:07:04] Barb Wachsman: This is such a critical topic because innovation and let me just make a few broad comments. Innovation is so absolutely key if we are going to fix the delivery system in this country and fix affordability. So we are desperate for smart entrepreneurs and great innovation. We need to do things that are really transformative.
The Role of Employers in Healthcare
[00:07:24] Barb Wachsman: So that said, I also want to underscore. Why talking to employers is important. Entrepreneurs who are in healthcare have to understand the system. And there are three stools, there are three ways healthcare gets paid for in this country. Medicare, Medicaid, and commercial. And when I say commercial, I mean employers.
People don't realize it's about a third, a third, a third. But what's really important, it's the commercial payer that provides the profit in the healthcare system today. This is where the profit is in the system for those that are trying to build a business. And I think this is why hospitals want to sell to commercial payers.
This is why entrepreneurs want to deal with commercial payers. This is where the money is. Now, there are all kinds of issues associated with this, and I'll go on to your question in just a second. If a hospital can't make money under Medicare or Medicaid, they're going to increase commercial rates. And this is a problem.
[00:08:24] Stacey Richter: Many a business model has been built on going where the money is. I am sure there's lots of employers listening who might feel like a frog in a pot of hot water right now. But moving on here. If an entrepreneur does choose to go down this path of selling to employers, what does he or she really need to understand to sell into this commercial/self-insured employer world successfully?
[00:08:47] Barb Wachsman: First and foremost, and probably the most obvious, is that they've got to make sure that the market has a need for what you are trying to sell. You may think it's obvious, you may think it's so cool, but there has to be a market and employers have to have a problem that you're trying to solve.
[00:09:07] Stacey Richter: You can't be a solution looking around for a problem.
[00:09:10] Barb Wachsman: Exactly. That's exactly right.
[00:09:13] Stacey Richter: And just thinking about this, just given all of the perverse incentives in healthcare, sometimes there is actually a problem. I think one of the pitfalls out there that is probably one of the more common pitfalls is that there is actually a problem but due to the perverse incentives it's not clear who that problem is for, or if it's actually a problem for anybody. So, an entrepreneur, great, they solve some problem, but nobody wants to pay for it because it is a problem, but it's nobody's problem.
[00:09:45] Barb Wachsman: Well, you're so right. And along that thread, you've got to make sure it's a big enough problem.
It's got to be a long term problem. I think it ultimately goes to what is really important to employers. Today, employers are faced with huge trend increases, problems with affordability, problems with cost. And if you are going in and quote unquote, just nibbling around the edges, You're saying instead of using physicians, we're going to use nurse practitioners because they're cheaper or something along the lines where you're simply reducing an element of the cost, but you're not really digging in to the most important problem, which is perhaps the employee, the patient isn't being diagnosed properly, isn't getting access to specialists, all those other problems. It doesn't matter if it's a physician or a nurse practitioner. You've got to be able to say, we are going to solve that longer term problem for you, which is accessibility, lower cost.
[00:10:44] Stacey Richter: So you're going to have obviously different employers who are focused on different things.
There are some employers that are extremely focused on rising cost trend, especially employers that are going to have a large number of lower paid employees, right? Then you have other employers who, you know, tech companies is the example that most use where focus on cost could be like a distant third as far as priorities go.
Really what they're trying to do is make sure that those benefits are as competitive as possible. It's all about talent retention. If we're talking about cost though, what's the difference between nibbling around the edges and having something which is a value prop? Is it a 10 percent cost reduction across the entire patient population or is it 1%?
Because if we're talking about reducing cost as a broad stroke, you're talking about a lot of different kinds of patients. I've heard we've got five generations in the workforce right now. The problem itself is really difficult to come up with what the cause is. And then if you're trying to have a solution that addresses 17 causes, it just becomes a sprawling solution and more and more impossible to actually achieve.
[00:11:58] Barb Wachsman: Well, thanks, Stacey. I think we're done with our podcast now because you've just defined one of the major problems we have out there. And I'm going to turn it on its head a little bit. I think employers are definitely concerned about cost. And I tell the story that I had someone in our studio approached me when I was at Disney about our cost problem in Florida, where we were paying an 30 percent higher than any other market in the country.
And by the way, not getting any improvement in quality or access year over year over year. And he said, look, if you could just get those costs under control, I could do another "Frozen". So, I think from a business point of view, every employer wants to see efficiency in every single thing they do. Employers are concerned about cost from a business standpoint.
It's a third rail for companies that are highly unionized, again, like Disney. It's also a huge problem of sucking up every salary increase for employers that, for example, have minimum wage workers. But here's where I'm going to kind of turn it on its head. It really is about producing a productive employee.
And I think some, especially in HR, might disagree with me. It may be more about having happy employees. No, it is a human capital. It's a labor issue. Where employers need to have a productive employee, a person sitting in that seat driving that ride at Disney. This is what you really need. So when you talk about cost problems, the benefits department has got to think more broadly about the business that they're running and what's important to them in terms of cost savings.
There are many ways you can understand really where do we really need to save most costs. But it's also about producing a productive employee. It's getting to those fundamental incentives about what's preventing us from having people on the job and productive. And it is about changing the perverse incentives that really drive everybody in the system to do more, not less.
[00:14:10] Stacey Richter: Centering on the core of what we're talking about here, making sure that if you're an entrepreneur and you're walking into an employer, you are solving a problem that they actually feel needs solved. That problem is big enough for them to deal with. I mean, we're talking to people who a lot of times are doing healthcare benefits off the side of their desks.
I've heard as Elizabeth Mitchell from PBGH has termed it. If I'm thinking about this like an entrepreneur, and I'm trying to figure out what my plan of action is here, it sounds like a ton of discovery is necessary before even you start building, because you have to understand what the perverse incentives are. And you really need to understand what the needs are in the market.
[00:14:50] Barb Wachsman: Honestly, I think benefits people really want to talk to entrepreneurs and say, look, this is not a problem for me. But this is and there's so many times where someone will say, wow, I didn't realize that. As an example, a great company out there that had a way of intercepting patients, employees that were being discharged from the hospital.
And readmission is a huge expense for employers. It's a profit center for hospitals. The problem was one, employers didn't realize that this was a big cost item. And two, the hospitals were not motivated to work with this company to help employees prevent from being readmitted. There was no incentive. The fines that Medicare weighs for readmissions are lower than the money that they will make once someone is readmitted back into the hospital.
And this was a huge stopping point. I mean, neither party would be willing to pay money to this company to support their employees once they're discharged and to avoid readmissions. And they actually pivoted a bit to what they were offering. And today they are actually selling to carriers versus employers.
So this is a product, if you will, that the carriers were more interested in than the individual employer. They were aware of the problem and more so than the employer.
[00:16:22] Stacey Richter: The ground is littered with companies who, again, going back to the point that we were talking about before, there is actually problems in the market, but who is incented to solve that problem?
Because sometimes, as I've said a lot on this podcast, somebody's waste is somebody else's profit. So you have people in very perverse ways protecting that waste because it's their profit and it's very important, obviously, to understand who those entities are.
[00:16:50] Barb Wachsman: You you know, this is where employers can really step in.
Yeah. This is where employers can take a stand and say, no, no, this is unnecessary waste and we are no longer going to pay for that.
[00:17:04] Stacey Richter: Again, entrepreneurs really need to understand if there's a market for what they're trying to sell. And the way that you make sure that you're not barking up the wrong tree is to, first of all, not think that you know better.
This is so easy. And that it's ridiculous that this problem hasn't been solved right now. Probably it's still a problem because these are very Gordian knots. Like these are very intractable situations. I'm also understanding that you kind of need to be working with someone who's got relationships. And who has a deep footprint in the healthcare industry. It would be very difficult to get some of these meetings.
It would be very difficult to get some of the knowledge that would be necessary to avoid some of these pit traps. All right. So let's move on to bit of advice number two in your list. What's your second kind of big category of advice for entrepreneurs?
The Importance of Differentiation in the Market
[00:17:55] Barb Wachsman: This kind of is a lead from the first that we've talked about, understanding a market.
But second, you've really got to be truly differentiated in terms of what you are offering to sell. It cannot be something where you are doing the same thing that five others are doing, but oh, there is a slight tweak to it. For example, today, the GLP-1s are, you know, a huge issue for employers and entrepreneurs are trying to figure out a way that they can support the employer in reducing the utilization of these GLP-1s.
Well, some companies are saying we're going to put in pre-op. Others are saying we're going to have health coaches that are going to take that person for the first four weeks and change their relationship with food before they're allowed to have the GLP-1s. Others are saying, we give up. We're going to let everybody have a GLP-1 that wants a GLP-1.
You've got to be differentiated. And I tell folks, present your solution as only you can solve that problem. What is your secret sauce? If you don't have something that's really different, employers are not going to buy it. They're getting inundated by requests from entrepreneurs to look at their latest bright shiny thing.
This is why you have companies like EHIR stepping up and Silicon Valley Employers Forum. These coalition leaders are saying, we'll take that burden off of you. Tell all these entrepreneurs that are calling you to just go, go away. And go to the EHIR and we'll call through again, you got to be differentiated.
And of course, it really should address what we've talked about at the start, which is what is the problem that's out there? You can't just jump into that thinking, oh, this is what employers want. And we'll just do a PMPM. No, employers are not purchasing PMPM per member per month these days. It's understanding how you're different and all those features that you hear in the marketplace need to be attached to your product.
Understanding really what are those key features for this particular employer.
[00:20:08] Stacey Richter: Just to react to the two points that you dropped at the end there, which is this whole PM PM thing, which is a standard in the marketplace. I think one of the reasons why is because payers really like PM PM. It's a great way to get some extra money.
And you know, if you're a payer or you're an employee benefit consultant, then you go into an employer and you say, oh, but it's only 50 cents additional a month or it's only a dollar a month or whatever. Okay, now they're making additional dollars. So that became a model because these payers, not the ultimate purchasers, but the payers thought they were a great way to make additional profit.
But if you think about it from an employer standpoint, it's just 50 cents plus, it's just like how many subscription fees can you get? You know what I mean? Like you personally, and then all of a sudden you realize you're spending hundreds of thousands of dollars a month on just like all these small things that you signed up for. And I think employers have come to that same realization.
[00:21:03] Barb Wachsman: I want to talk about this for just a minute or so because I think it's the biggest misunderstanding and fallacy that entrepreneurs have. About per member per month, per employee per month, whatever you want to call it. First of all, I think it's primarily private equity and venture that wants you to have a subscription, if we call it that, or membership, or recurring revenue.
They will ask you to have that as an element of your pricing the day they meet you. And you have to tell them, look, this is just not flying in the who's purchasing this today, whether it's the carrier or the employer to just what you were saying, these small numbers that entrepreneurs think, oh, it's just simply 50 cents.
If you're dealing with a company like a Disney, like a Walmart, a million lives, we're talking about, a million dollars a month for something that, again, it's all about engagement. How many people are actually going to be using that product for that recurring revenue that you're charging? Bottom line, employers today are very opposed to PMPM.
And when I say that, I'd say probably 80%. They're willing to have a performance guarantee. Where you're going to get certain bonuses, that is fair. If you can say one year out from when we start, the employees that have used the service are doing better. They have met the goals that we have set for this product.
They're willing to say we will settle up at year end. If you really need a budgeted amount, you can, we'll pay a dollar PMPM, but at the end of the year, we're going to look back and see, did you perform for that dollar? And if you and or will translate it into fee for service and if you are more than what we would have paid fee for service, we're going to claw money back.
[00:22:52] Stacey Richter: Yeah, I do think it would be important to recognize that there are employers all across the experience spectrum here. You have some employers, they are getting data and they are looking at it carefully. If you're dealing with an employer like that, they actually have a very negative impression of PMPM or value based care just because they have seen how, again, payers a lot of times have used it as a way to extract PMPM or extract extra money.
It just becomes a cost and it's really difficult to connect the dots back to what we get for this value based care. There's some kind of medical home PMPM override or something like that, that the employer is getting charged for. And then if you look at, well, what did I get for my medical home PMPM?
It's basically nothing because I'm being charged for plan members who aren't even going to that particular health system that I'm getting charged for. So like it's very fraught, right? You have some very sophisticated employers and they know all the games. Then on the other side of the spectrum, you have employers who simply do not have the expertise.
I was just talking to David Claude about this. Actually, they just don't have the clinical expertise to meaningfully evaluate quality of care. They're just basically focusing on cost and service and that can become a race to the bottom really fast. Again, tons of nuances, but I'll tell you what I want to hear from you, Barb.
What are some examples of secret sauce or companies that you really feel are differentiated these days that really have something that's interesting to you?
[00:24:21] Barb Wachsman: An entrepreneur that has a way of identifying the employees that would have the greatest value of using their product. So entrepreneurs that, first of all, understand population health and understand what the particular need is, but really, to be able to engage that population that they are trying to serve, that perhaps have a way of gathering data, or perhaps they understand, and this is where AI is going to come in, where they can say, if a employee that looks like this is going to have these kinds of problems in the future, this is the golden ticket.
And I'll just use as an example, there are companies out there that can anticipate using predictive modeling, machine learning, can anticipate when an employee will stop being adherent to their drugs. Drug adherence is the number one reason people end up in the emergency room. What is the opportunity here?
The opportunity is for a social worker or a nurse or a physician to reach out to that individual employee, ask how they're doing. Oh, I see you haven't renewed your hypertension med. How can we help you? We had something very similar to this at Disney where we had a population in one of our onsites whose health absolutely depended on them remaining adherent to a certain drug.
We, as an employer, had the data and we could look and see, hey, there's a whole group of employees here that's falling below 80 percent adherence. What's going on? Or to say, as an example, we know now that colon cancer, the rates are increasing dramatically among younger black men. For an entrepreneur to be able to say we have, you know, a specific way that we can interact with this particular population and we have shown that the kinds of providers we use, the way we approach this particular issue has resulted in a far higher engagement rate than any of the carriers have, for example. I will use one other example, we did a pilot with a super interesting company.
But basically it was going to be able to contact our senior professional women at Disney who are eligible for mammography, had not had a mammogram in the previous two years. They were able to reach out to them via text and at the same time reaching out in that text allowing the employee to schedule a mammogram with a large hospital system that we happen to have across the street from our corporate headquarters.
We had women getting that mammogram a half an hour after that text went out. Far greater engagement rates multiple multiple times over what the carrier could do in terms of engaging women to get that critical mammogram. It was because of their technology, it was because of a way they thought of things differently, it was because of a way they decided, hey, let's engage the provider, buy certain slots on their scheduling system, was all those elements that they put together and really produced something that was significantly different than anything we had seen before.
The Importance of Patient Engagement and Quality Improvement
[00:27:48] Stacey Richter: So the thing that all of those examples have in common is really around patient engagement. And I think one of the reasons why you're saying this is because patient engagement is notoriously suboptimal, especially relative to some of these.
[00:28:04] Barb Wachsman: Let me just mention one other quick thing, and that is finding a way to show that you are improving quality.
And by that I mean faster and more accurate diagnoses. There's work being done out there by entrepreneurial companies that are helping providers be more efficient in the way that they come up with diagnoses and helping providers be more accurate in their diagnoses. A company that can say to me, number one, we have fewer specialist referrals because our physicians are more highly skilled.
They are faster to make the correct diagnosis overall. Again, this is the golden ticket for what an employer wants in getting that productive, healthy employee.
[00:28:51] Stacey Richter: And all of this is super intriguing. I definitely, if there are employers listening, would listen to the show with Al Lewis, and there's also a show with Rik Renard, and there's an upcoming one with Dr. Kenny Cole, which all sort of spiral around this point of... well, I think there's a couple of points here. Do we actually have a validated need and a differentiated way to achieve that need, which are the first two points that you mentioned here, but then it becomes really important on the employer side to be able to validate what this entity is claiming that they can do and some of the stuff is a black box unless the employer is sophisticated enough to be able to measure some of this themselves.
This is a point actually that Cora Opsahl makes very clear on the podcast. She's like, you collect your own data and you validate the value prop and you validate the performance of these vendors yourselves because it's so easy just to squeeze the balloon. But definitely hear what you are saying.
The second point here, be different, be differentiated, solve an issue, and then be able to explain why you are the only one who is able to accomplish that because otherwise you become one of many. What do we have for number three?
Navigating Internal Politics and the Sales Process
[00:30:09] Barb Wachsman: Let me just say something about internal politics.
You the entrepreneur have got to identify a strong and visible champion who is going to advocate for you as a partner.
This is hard to do. I mean, some of this is taking time of getting to know who you're dealing with. You've got to be able to talk to the right person in the organization. Potentially somebody who has the ability to pull a trigger, but more importantly, somebody who has strength within the organization to move up that governance model that is in every large company.
At Disney, I reported to a subcommittee of our board that met three, sometimes four times a year. We had a very rigorous, very specific time frame for presenting new ideas, new programs we wanted to run to this committee. So timing extremely important, but also having somebody who has the respect of the C-suite if that's possible, or of those folks above you that you've got to get to support the idea that you have.
Finding that champion and letting that person advocate for you and giving them all the information they need that's important to those above them is just extremely important. I've seen entrepreneurs who will give, first of all, they'll give that person no information that's useful for them to be able to sign a contract with you.
Or they may give you so much information that that person cannot make any sense of it to be able to take that up the chain. So you know what it's like when you're working with your own board. Understand that this is what the benefit professional has to go through and you have got to find that person that's also willing to go for those hurdles.
Everything is going to take longer than you think. We used to call it Disney time, which could be four times longer than an entrepreneur would imagine or probably equally as important. Your investors think it's going to take me to be able to get through one that governance process. It has a very specific schedule attached to it to get through the privacy and security issues that are now so important getting hacked is the kiss of death. So understand how long this would take and there is a time when that door is closed. You're trying to sell them something that you all have decided is best to put out during open enrollment.
The door for open enrollment and adding something to your lineup can be closed as early as July for open enrollment. That's going to happen in October for a plan that's going to start in January. And I think this is very frustrating to entrepreneurs. Now that said, there's certainly other things that, one, don't have to be installed during open enrollment, although there are reasons you do and don't do that, two, that are so small, and I'm putting that in big quotes, that they are not even going to be part of the benefit plan itself.
And again, I think you mentioned this, Stacey, there's certain things that Would allow an employer to charge outside of the benefit plan. In this case, you're not up against the software programming, the communications work that have to go on to support open enrollment.
[00:33:24] Stacey Richter: We have a list of four things here and they span the gamut actually of making sure that your product is on point, but then also making sure that your selling is on point.
And this last one, I think you folded into very interesting concepts, obviously understanding who the overarching client is and what their needs are, but then understanding the needs of your contact at that client, which becomes part of the sales process here and realizing that a lot of people in HR, they didn't start out in sales, but they are being asked to sell up a product.
So making sure that you're offering them as much help as they're going to need to be able to internally socialize and sell something is very important. But then you mentioned something also, which is just what the sell cycle is and getting real about that because there's so many companies who run out of money because they do not have the runway that is aligned with the actual just what would be the expected sell cycle.
And these sell cycles oftentimes, I mean, same thing goes for hospitals, they can be years, which makes it really difficult if you are a bootstrapping scrappy entrepreneur who just needs your first sale.
The Role of Innovation in Healthcare
[00:34:43] Stacey Richter: So, it definitely feels like there's a product element here, like making sure that you're actually, you have something that is unique to you, a unique selling proposition which actually fills a big enough need for someone to pay attention to you on the one side but then on the other side you have a very well considered approach to selling whatever that is.
[00:35:05] Barb Wachsman: No question about it. We've been talking a lot about the employer purchaser, but you've really got to manage your investors when you're evaluating who you want to have invest in your company. You've got to have people that understand healthcare, understand that sales cycle are going to give you the runway that you need to your point to be able to deal with this long timeframe.
And you know, for some, it just may not work. You may decide instead, I'm going to sell to the carrier, or I'm going to go off and sell to providers, or I'm going to sell to smaller companies. And actually, let me make a comment. Every employer wants to sell to what we call the big jumbo players, those that are 100,000 lives.
I mean, people are just so excited to sell something to a big brand like a Walmart or a Disney. But really, the majority of companies out there and the majority of self-funded employers are of much smaller size. And these are the folks that are far more nimble, sometimes do not have this incredibly stringent timeframe, can do things more quickly.
So I think be very realistic about your market, who you really want to sell to. It's very easy to get dazzled by this idea that in one signature, you're going to get 100,000 lives.
[00:36:23] Stacey Richter: I know you worked with Livongo, and we know what happened with Livongo. What lessons might we be able to draw from that?
[00:36:32] Barb Wachsman: From the employer perspective, I think the lesson is there are great stories out there, but the magic is whether or not they can implement them, whether it's something they're there, whether you know, the price, the economic value is there. I mean, I would say don't be fooled by the great story that so many entrepreneurs have and have such deep beliefs and conviction.
[00:36:59] Stacey Richter: Barbara, is there anything I neglected to ask you that you want to mention here?
[00:37:03] Barb Wachsman: I would just want to end by saying we are desperate for great innovation that's really going to change the way care is delivered, how much it costs, and what we need to do to produce a productive employee. I also think that entrepreneurs really need to think not only about healthcare.
But whether or not their product can address disability, whether it can address problems with occupational health. I think again, for the entrepreneur to think more broadly about the cost of care in creating a productive employee, whether it's their commercial plan, their disability program, their occupational health program.
Entrepreneurs don't think that way. And it's really important that they do. Great opportunities there.
Conclusion and Final Thoughts
[00:37:44] Stacey Richter: You're connecting the dots between the cost of human capital and healthcare, it sounds like.
[00:37:51] Barb Wachsman: Anything that talks about improving the safety of an organization for an employee. And a lot of this has to do with how healthy the employee is that might be doing something that is, oh, I don't know, running a nuclear power plant. That gets the attention of the C-suite like you would not believe.
[00:38:09] Stacey Richter: Barb Wachsman, thank you so much for being on Relentless Health Value today.
[00:38:13] Barb Wachsman: You're welcome. It was a pleasure.
[00:38:15] Stacey Richter: So let's talk about going over to our website and typing your email address in the box to get the weekly email about the show that has come out.
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