The Long Road to Adoption: What Founders Need to Know Before Breaking into Health Tech

When Tesla’s first electric car models hit the market in 2012, the company rolled out a national network of hundreds of charging sites within a few months. Today, they’ve expanded to thousands of charging stations around the world, and the company has sold almost 5 million cars to date. 

Compare this to Electronic Health Records (EHRs), which were developed in 1962, yet took decades to be adopted across health care systems. And it’s only really now, over 60 years after their invention, that we’re starting to see their true benefit.

In both cases, we’re looking at the introduction of a disruptive technology into environments lacking the necessary infrastructure. So why was the rate of rollout and adoption so vastly different?

The U.S. healthcare system operates under its own unique economy, culture and incentives compared to the ecosystems that saw Tesla, Meta, Amazon and so many others thrive. It’s the same reason many of these tech giants — most of which have now ventured (Opens in a new window) into the health tech space in some form or other — have made minimal inroads (Opens in a new window) into altering our healthcare delivery systems.

Coming from a clinical care background and now working in the health tech space, I’ve had the opportunity to encounter so many brilliant minds from outside healthcare working on solutions to major health challenges. But I’ve also watched many of those great ideas fail because of a fundamental misunderstanding or underestimation of the unique barriers entrenched within healthcare. Here are some of the key considerations that innovators from non-healthcare backgrounds need to be prepared for.

The US healthcare system is inertia-driven, and incentives are aligned to maintain the status quo

The healthcare system is highly complex, and navigating it requires collaboration with insiders. Too often, startups enter the health space with misguided or unrealistic expectations, misallocation of resources, and a sprint-to-profit mentality that clashes with the marathon-like endurance required for meaningful change.

They get frustrated which leads to project abandonment, leaving potentially transformative innovations to wither on the vine. It’s a huge loss of opportunity, as some of these ideas may not come up again for years. 

In my opinion, the biggest (and most overlooked) barrier is the amount of inertia and fragmentation that exists in healthcare, shaped by deeply ingrained structures and incentives that resist even the slightest course correction.

As an example, in 2001, Rivers et al. published a landmark article (Opens in a new window) showing that early fluid resuscitation with an IV fluid bolus dramatically improved patient survival from sepsis. Despite the significant benefit of this seemingly simple intervention, it was not uncommon, even 10 years later, to find many healthcare systems and practitioners still working to implement and ensure coherence with this guideline in their sepsis treatment.

The glacial pace of change in healthcare is deliberate, and deeply rooted in the foundational principle “Primum non nocere” (“First, do no harm”). Every physician and every care provider is aware of this pledge, and there is good reason for it. All medical interventions carry some risk of harm. It’s not uncommon for medical practices to be later found to be ineffective and even harmful – skull trephination to remove “stagnant blood”, the use of Theophylline in asthma, high-dose epinephrine in cardiac resuscitation, and most surgical interventions for low back pain. There are no incentives in medicine to provide care better than the current accepted standard of practice. But, there are significant penalties if an adverse outcome is associated with a practice that is not accepted, even if it is a bad outcome to a future practice that may one day be accepted.  

Also, consider that physicians, to a large extent, control the practice of medicine. Although the process of training clinicians is changing, for many years, physicians were a group of selected individuals who excelled at courses favoring rote memorization over creative analysis, and who were willing to train in a highly structured environment for upwards of 12 to 16 years post secondary school to work in their chosen field. This labor pool that controls much of healthcare, especially with respect to adoption of new technologies, is a filtered group of highly risk-averse individuals comfortable with system inertia, and this culture pervades the industry.  

This stands in stark contrast with Silicon Valley’s ethos of “move fast and break things”. Risk-embracing technologists may underestimate the activation energy required to bring about change in the risk-averse healthcare landscape. Additionally, change is often low on the priority list, since healthcare systems tend to already be operating at their maximum bandwidth.

Clearing regulatory steps takes time and resources

Navigating the regulatory landscape is another challenge that’s unique to healthcare. While a new car part, software or communication device can quickly enter the market after development and start generating revenue, health technology needs to go through rigorous approval processes. 

This additional step is essential to ensure the safety and efficacy of healthcare solutions, but it can also delay the generation of revenue by years. This means that startups need to convince investors to buy into their vision many years before a payout. 

The FDA approval process — including necessary clinical trials — typically costs in the seven figures, and there are examples of approval processes costing upwards of $37 million (Opens in a new window). Health tech, biopharma and other healthcare related startups often have to raise funding exclusively for this no-revenue step — again, a seven figure, multi-year endeavor. Since just a quarter of drugs pass phase 3 clinical trials, it can be difficult to find investors willing to take the risk — even more so during times of economic uncertainty.

Forming partnerships with pharmaceutical corporations is an alternative option to help startups clinically validate their solutions, but Big Pharma is less willing (Opens in a new window) to help out smaller players than it once was. In this shifting landscape, startups need to get creative in order to clear regulatory steps without breaking the bank. 

Keep an eye out for public research grants that support scientific advances in your area. Look to partner with disease-specific research foundations or patient advocacy groups. Crowdfunding is also emerging as an option to supplement funds to reach clinical trial budget targets.

Finally, joining forces with other startups — even those from different healthcare verticals — can enable you to pool resources and expertise, and may even open up new applications for your technology. 

Who you’re selling to probably isn’t who’s buying

So you’ve developed a prototype, you’ve demonstrated its clinical efficacy and safety, shown that it clearly outperforms the status quo, and you’ve interviewed dozens of doctors and other end-users who confirm the need for such a solution. There’s nothing preventing its widespread adoption across healthcare systems now, right? Well, not quite.

Unfortunately, clinical superiority doesn’t automatically translate into the adoption of a healthcare solution.

Even if all the doctors you’ve spoken to agree that they would use your product, in reality they are only one of multiple linchpins necessary to the process of getting a new technology approved and adopted. Other key decision makers and stakeholders, and often the paying customer, include the hospital, the provider group that employs the clinician, other health system executives and payers. Each is looking at multiple other factors beyond clinical efficacy, for example, existing long-term agreements with other adjacent vendors, cost of rollout and education, reimbursement considerations, and more.

The disconnect in incentive alignment between payers, providers, and patients further complicates adoption. Startups need to have a nuanced understanding of this ecosystem to identify their most effective entrypoint. Beneficiary, end-user, and customer can all be stakeholders in the adoption of a new health technology, yet each has different goals and barriers.  

That said, it’s essential to involve clinicians and patients at every stage of your product development and gain a deep understanding of the acute challenges and pain points that current tech, therapies and solutions don’t address. In addition to improving patient outcomes, new solutions should solve clinical challenges without creating an administrative headache for healthcare workers (read: minimal or no disruption to current workflows).

Resilience is essential, but the rewards are substantial

While the challenges I’ve outlined can be immense, I want to emphasize that change is indeed possible in the health tech space. Over my four decades in healthcare, I’ve been lucky enough to witness remarkable transformations — from the invaluable population-level health insights that are finally being unearthed thanks to the electronic health records, to the advent of technologies such as new diagnostic imaging modalities, to minimally invasive surgery and robotics, to legions of new pharmaceuticals. Emerging health tech may be swimming in rough waters, but it’s also a blue ocean.  

While it’s true that we underestimate the time it will take for a new technology to be adopted in healthcare, we also often vastly underestimate the transformative impact that it will eventually have. It’s only when we look at healthcare through a long-term lens that the true scale of improvements is revealed. Innovation in healthcare enables us to amplify our impact from individual patients to entire populations. This is what has inspired me to keep striving for change.

Photo: Pixtum, Getty Images

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