Why the health industry is seeing an executive sea change and why it matters
This year alone, the industry has seen several high-profile executives leave for startups. Why would someone who has essentially “made it” in their career with a Fortune 500 healthcare company move to a smaller company getting its technology off the ground?
For most professionals who have spent their careers working for healthcare providers and other such organizations, there may be no more coveted position than a C-suite title at a world-famous brand. But that’s changing.
This year alone, the industry has seen several high-profile executives leave for startups. An Amazon director left to join medical device startup AliveCor, eMindful hired a sales lead away from Johnson & Johnson, and Merrimack lost its top leader to startup Yumanity. And, in what was arguably the most contentious move of this nature, a UnitedHealth executive’s leap to new venture Optum went to court.
Why would someone who has essentially “made it” in their career with a Fortune 500 healthcare company move to a smaller company getting its technology off the ground?
It comes down to pace and promise:
The pace of healthcare innovation has been slowed within the confines of the world’s larger organizations; national companies with tens of thousands of employees operating within a long-established system simply can’t be as agile as their smaller, newer counterparts. Throw in the fact that the industry is one of the most regulated in the world, and it’s easy for new ideas to be stifled or deprioritized for longer-entrenched, better-understood needs. This is a stark contrast to the fast and reactive world we see with health tech startups, which are already implementing cutting edge technology like AI, machine learning and automation in creative (and effective) ways. I believe the industry has reached a point where executives that think differently, that still have that drive to make a mark on healthcare, are foregoing their hard-earned corner offices for the gritty, highly-collaborative emerging businesses to work on something with amazing potential.
That brings me to promise. For every 100 health technology startups out there, perhaps a handful will make it. For the B2C health startups that survive, the majority will end up moving to a B2B model. The main reason is that these startups are not founded by those deeply familiar with the regulations, demands and operational constraints of the healthcare industry. They think like technology entrepreneurs, rather than healthcare innovators. That’s a deadly mistake, even for a startup that has an extremely promising idea. When I first worked with Conversa Health, I saw promise in two areas: what they were enabling care teams and patients to do, and who they were: a strong mix of medical professionals, seasoned healthcare executives and strong technical talent. Conversa is meeting the digital patient engagement market’s significant demand, which analysts anticipate to grow massively over the next several years. I believe that many of the executive moves from Fortune 500 to small companies occur when a startup comes along that has a vision and product so promising that, if they are able to navigate the industry, have a much-reduced chance of failure.
Bringing The Cause Back Into Focus
In my experience, working for one of the nation’s largest health companies put me several steps away from I could effect real change–and I believe that distance to be a large reason why so many established healthcare giants have slowed their pace. Particularly for those working in the more technical, behind-the-scenes areas of healthcare, there was little connection between the products we built and the people benefitting from them.
Personally, it was hard to see how my work was positively impacting people on a daily basis, and decades into any career, I believe most anybody needs that type of renewed closeness to the cause. Not just in terms of motivation, but in terms of the personal connection to make a great product. Great products are woven with empathy for those that need it, especially in healthcare. So, like much of the leadership that has been making moves to smaller health companies, I wanted a sense of how my work was creating tangible change–even if it would be on a smaller scale initially.
One of the biggest services, in any industry, that a technologist can provide is understanding–how people are using a product or service, what their needs are, and how it fits into an entire life. Can I point to someone in my family, or circle of friends, that this could help? Technology without empathy will fail.
Changing with the Times
I expect to see more osmosis between Fortune 500s and startups. And while the majority are locked into their careers and want a stable place to make a home, the innovators who want big change will look for paths to truly manifest that desire, even if it seems riskier. And those are the people that are going to influence change in an industry that has been battered by politics and has moved with glacial rate of change.
The question remains, why are we only seeing this migration now, as opposed to five years ago? We are seeing a coming of age in the standards space, making policy change a major driver–much of which is inextricably linked to technology. For example, CMS-9115-P, which will require a huge shift in data interoperability, needs the long-time experience of veteran healthcare leaders and the resourceful agility of a startup that has the funding and the space to meet standards. And I expect they’ll do so much more effectively than some of their Fortune 500 competitors.
This ongoing swap in healthcare leadership is not a big thing; it is not destabilizing to large organizations, nor does it guarantee that a startup necessarily has more power over peer companies that did not recruit away from the biggest players in the industry. What it does do is something that I, for one, have embraced with action: reminding us of why we came here in the first place and a reminder that with each day, there is a new opportunity to save a life. Even if it’s through source code.