We are at an exciting time in the world of healthcare! With technology becoming more accessible and more and more digital natives entering the work force, there’s an abundance of innovation. We have so many more people that are coming up with creative digital solutions to the challenges that we are currently facing. However, while there are plenty of great ideas and startups, there’s just simply not enough money to fund all of them.
So how do you make sure that you’re the one getting the funding you need and not another startup? Oftentimes, the answer lies within making yourself stand out, and a great way to do that is with your startup disrupting the traditional models. By causing disruption, you immediately draw more attention to yourself and the work that you are trying to accomplish.
It is also equally important to be aware of all of the policies and regulations in healthcare. Because if not, then all of your work and disruption would have been for nothing if these regulations prohibit you from getting customers.
To get a better idea on what policies and regulations you need to be aware of and just how to get access to innovation funding, we reached out to our ever so talented Healthcare IT Today community for their insights and knowledge. Here is what they had to say.
Shelby Chamberlain, Co-Founder & Chief Strategy Officer at Patient Discovery
To effectively raise capital in the healthcare space requires delivering to investors a product that has a clear market fit, solves a meaningful need, and delivers the proof points required to establish a concrete path to profitability. And, the proof points are where many companies stumble, as it can take years to develop this type of data in healthcare. But here too is where the opportunity lies. Rather than try to innovate from within healthcare, there are opportunities to disrupt the model by bringing proven solutions and innovations from other industries into healthcare. Taking this approach can accelerate those timelines to proof and ultimately expedite funding goals.
Sandra Von Meier, Head of Business Development at Debiopharm
The start up community overall has seen its share of ebbs and flows over the last year, with start ups focused on healthcare being especially hit. While we have seen an uptake in financing rounds and deals closing in during the last weeks, the news of SVB , CreditSuisse fall out and higher interest rates have contributed to the instability in the market, making it more difficult for start ups to secure financing, thus adding another layer of pressure to get quick results and wins.
This market instability, however, also provides an opportunity for start ups to seek alternative forms of funding. Instead of going down the traditional path of seeking VC money, start ups are potentially forced to sell off assets earlier than planed or restructure to stay afloat. This causes disruption, uncertainty, and potentially a delayed path towards an IPO or getting access to further VC funding.
On the other hand, entering into earlier stage deals can add value both to start ups as well as pharma companies collaborating together on novel assets: pharma providing funding through upfronts and takeover of R&D costs, start up focusing on innovation and development.
Frederico Ferreira Braga, Head of Digital at Debiopharm
It is quintessential for healthcare that startups continue to tackle the hardest problems the industry. History shows that solving for a difficult problem often requires some sort of disruption of business model, process or technology. Larger companies tend to be less self-disruptive and, therefore, less innovative. Consequently, the biggest challenge is finding the right problem to solve at the right time, while also requiring the smallest disruption and delivering the most value. Quite the balancing act.
Derek Streat, Co-founder & CEO at DexCare
The healthcare industry is at a crossroads and companies purpose-built for this moment will succeed. It’s a time of volatility, where resistance to change could spell failure for slow-to-move health systems. Consider the market forces at play: Patients are now shoppers. The need for care grows, while legacy systems limit excess capacity. And the emergence of alternative care – spurred on by big-tech companies – has created an all-out sprint to capture a new breed of consumer.
It’s also a time of brimming opportunity, and as the demand for innovative solutions increases, a process of natural selection will settle the best ideas and technologies. Emerging growth companies have an inherent advantage: We’re agile and nimble to solve for vulnerabilities and to safeguard health systems from uncertainty. But disruption ultimately comes from within. Groundbreakers from the inside are vital to shorten lengthy sales cycles and to elevate products as critical infrastructure that protect and buttress the health of the business.
Bill Charnetski, EVP, Health System Solutions & Government Affairs at PointClickCare
Traditionally, long-term and post-acute care (LTPAC) facilities have not benefited from the same health IT investments or funding as other care sectors. Since the U.S. government introduced the meaningful use program as part of the Health Information Technology for Economic and Clinical Health (HITECH) Act in 2009, LTPAC organizations – notably nursing homes – and the vulnerable patients they serve have been left behind. As a result, these provider types sit outside of current interoperability and health information exchange efforts and have been slow to adopt electronic health records (EHRs) due to a lack of government incentive programs.
All this to say, more investment in technology presents enormous opportunities to alleviate these issues and accelerate innovation across the continuum. Specifically, for long-term care, we continue to push for critical infrastructure investments into technology that can help reduce administrative tasks while also improving workflows, privacy, and communication between care settings. Only through true collaboration will we achieve the investments and adoption incentives required to help sustain the critical system-wide needs across the entire healthcare ecosystem.
Suzie Yoon, Principal at Ceteri Capital
Some areas in healthcare are more exposed than others, but changes in policies and regulations generally play a significant role in healthcare funding, creating the framework in which healthcare innovation can occur and providing guidance on how certain innovations can be funded and supported. For example, reimbursement and insurance coverage policies regulates what services get reimbursed and for how much, and can completely derail many service-provider models should changes be made.
Robert Plush, Head of Partnerships at ScaleHealth
What role do policies and regulations play in healthcare innovation funding? A huge role often times. They can guide the direction of investments and focus of a company. Founders need to be aware of policy that will have an impact on their company as well as the regulatory pathways they will need to follow. A highly regulated technology will oftentimes need a lot more capital and can be seen as much more risky.
Jay Ackerman, CEO & President at Reveleer
Government regulation is far-reaching and ever-present in healthcare, of course. Investors must understand the market and the complexity of regulations for providers and payers, particularly as they apply to sharing patient data and managing care for Medicare, Medicaid, and Affordable Care Act programs.
Sally Frank, WW Lead – Health & Life Sciences| Microsoft for Startups at Microsoft
Today’s healthcare startups are digital natives, using technology to improve outcomes and reduce costs, while taking cues from consumers who want to interact with their healthcare providers, pharmacies and other organizations the same way they shop or bank. The established companies, i.e., providers, payers, and life sciences companies are still moving to the cloud, with various parts of the industry moving significantly faster than others. The biggest challenges healthcare startups face are the evolving regulatory landscape, the need for validation, and the effort and resources required to align product, regulatory, security, and go-to-market strategies. All of this takes time – lots of time – which often leads to the need for larger and more frequent funding rounds.
So much to consider here! Hopefully this will help all of you seeking funding for your startups. Thank you to everyone that left a quote for us and thank you to everyone reading this article! We’d love to hear your insights as well, so be sure to leave a comment down below or on social media.
