clock menu more-arrow no yes mobile

Filed under:

Book Excerpt: "An Entrepreneur's Guide to Fixing Health Care"

For those arriving from more competitive industries, the emptiness -- and opportunities -- of the health-care market can lead to slack-jawed disbelief.

Entrepreneurs have to confront an unwelcome reality: Facebook exists and has gone to market. Same goes for Twitter, Google and LinkedIn, not to mention outfits like Microsoft and Apple.

What does this mean? In the world of big consumer applications for technology, the low-hanging fruit has been plucked. Sure, other breakthroughs are inevitable. But the competition is sure to be tough, coming from startups and titans alike.

The health-care economy, by contrast, is a jungle dripping with low-hanging fruit. The opportunities are limitless, and the market is immense. For digital entrepreneurs, it’s almost like getting a chance to return to 1998. So the first thing they should do, after the requisite due diligence, is to jump in.

One great advantage of plunging into health care is that the competition, in many cases, is nonexistent. In other words, customers, whether patients or caregivers, are getting by without the best service or software. They may be suffering long waits or communications snafus. But that suffering is the status quo. They’re used to it. Let’s say you come along with a solution and they don’t like it. At that point in a normal market, you’re dead. But in health care, there’s often no competitor to sweep in. You can refine your product, come back again, and still find the potential customers suffering with the status quo, ready to be convinced. For those arriving from more competitive industries, the emptiness of the health-care market can lead to slack-jawed disbelief. It’s too good to be true.

There are reasons for this, of course. It’s a convoluted industry full of roadblocks and regulations. Many of the customers are nonprofits, which are less than eager to buy disruptive technologies. And yes, the industry grapples with certain issues, like death, that require more serious reflection than, say, mobile videogames. But at the same time, getting into health care provides entrepreneurs with a chance not just to build a thriving business, but to serve humanity. Here are a few examples:

Where Does It Hurt? book cover

Recurring revenue

Build technology-enabled services, not technology. This means selling the outcomes, and keeping the how‑to mostly to yourself. Also, the cost of sale is so prohibitively high in health care that you need to keep getting revenue without going back for sales calls. This favors subscription models.

Connective tissue

Think of the various elements of the health-care economy as islands. There’s the doctor’s office, ambulance service, hospital emergency department, imaging facility, rehab center, nursing home. I could go on and on. Each one is an island. Patients bounce back and forth between them, but their information, more often than not, stays behind. Ask anyone who has tried to manage communications among these islands. It’s often rudimentary, fragmented, distorted or misplaced, and sometimes nonexistent. And just imagine what it’s like for a senior who has serious health issues and may be growing forgetful.

Building links to connect and communicate with these islands is a massive opportunity for tech companies. An entrepreneur named Russ Graney, for example, saw these needs when his uncle was getting discharged from acute care at a hospital. He had Alzheimer’s and needed help. But it took 17 phone calls, five faxes and three extra days in the hospital to line it up. This led Graney to found Aidin. Think of it as for discharge-planning professionals. Aidin is only one niche of hundreds.

This connective tissue is also an opportunity for providing the human touch. Take the example of SeniorBridge. Founded in 2000, the company trained and dispatched caregivers to the homes of seniors who needed help — help with managing their meds, setting up appointments, preparing food, rehabbing a broken hip, even writing emails to grandchildren. The market for this type of service, they quickly saw, was vast. The company grew to more than 1,500 care managers and $72 million in revenue by 2012, when Humana Inc. snapped it up for undisclosed millions.

Further opportunities for this type of business are limitless. Just think about how many people need help, and how many folks with good people skills would be ready to help them for $40,000 or $50,000 a year. … And these people can be trained, not to replace doctors, but to provide help for every disease and every condition. Think of people who cannot see a specialist, but are carrying around a crippling anxiety. Is a $200 one‑on‑one session the only way to get support? I bet that with the right training, someone with the friendliness and people skills of a Starbucks barista could provide a valuable service.

Think primitive

The key for technology entrepreneurs is to produce a product or service whose value can be communicated in a five-minute meeting. It doesn’t have to be sophisticated. Primitive is better. It’s cheaper, and probably easier to learn. It gets in the door quicker, and it can develop inside the industry, adapting to real needs (and not what software designers imagine the real needs might be before they make their first sale). Once a primitive technology is hitched up to a subscription, the client base will pull the technology into higher levels of sophistication.

Team up

Entrepreneurs need to team up to make themselves heard in Washington, D.C., and the state capitals, and among prospective clients. The big players all have sophisticated lobbyists working on their behalf. They also have large sales staffs, with golf outings and jets on call to carry prospective clients to site visits. Entrepreneurs need a voice to advocate for disruptions that the economy and the health industry urgently need — the sooner, the better.

Excerpted from “Where Does It Hurt? An Entrepreneur’s Guide to Fixing Health Care” by Athenahealth CEO Jonathan Bush with Stephen Baker, in agreement with Portfolio, an imprint of Penguin Random House. Copyright (c) Athenahealth Inc., 2014. Reach him @Jonathan_Bush.

This article originally appeared on