Finding Some White Space

Healthcare is in dire need of innovation There are tons of areas to target from a market segmentation perspective — patient engagement, provider engagement, personal cloud (both patients and providers), research, clinical trials, infrastructure, devices and sensors, patient-reported outcomes, virtual visits, care collaboration (including messaging), price transparency (inclusive of payer and plan selection), quantified self, and a few others I’m probably forgetting or lumping into the above. As somebody who’s working in healthcare, this really excites me. There are so many potential areas that can be explored with such far-reaching impact.

Of course there are landmines that make it challenging to build and distribute new, innovative, and potentially disruptive solutions in healthcare. Healthcare organizations that won’t take big risks, regulatory challenges, cash problem,  and entrenched vendors unwilling to partner or integrate. The challenges make it more worthwhile, but I’d be lying if I said there aren’t times when I want to beat my head against a wall. Those times don’t last.

It’s interesting, considering all the different things happening in healthcare, to look at where and how innovation takes hold in a market and within an organization. Good case studies exist inside and outside of healthcare. I’ve been reading and talking a lot about entry points for startups in healthcare, or for innovative initiatives within organizations. Everything goes back to finding the white space and getting closer to the people that are experiencing the real pain.

Mobile is also usually a very big part of the discussion, as are tools sold or distributed direct to users (closer to pain) and not necessarily to enterprises (payers and healthcare systems). There are certainly some successful examples of selling new solutions, both internal and external, directly to large organizations at the highest levels, but those aren’t typical.

If you want to build something in health and increase your chances of success, the white space is where you want to be. That white space is usually not in the center, but at the edges. White space is made up of areas where  current products don’t deliver or where there’s no competition. Basically, where there is an opportunity. 

Targeting the white space and the edge is an easier sell to investors. It’s a safer bet, with a lot of good exit potential from the behemoths in the center. As an example, I don’t think building an enterprise EMR today is white space, though I’d love if somebody with unique funding options would go after it.

It’s easier by leaps and bounds if you can distribute directly to users. Direct to users has been much more successful on the provider side than the patient side, at least outside of the motivated healthy that make up the 10-12 percent (that’s the statistic I remember at least though I’m suspicious this number is closer to one in 5, than one in 10) of the population that is really motivated to track things like steps and weight. On the provider side, Doximity is a good example of going after physicians directly and then looking to flip to offering enterprise tools. But Doximity is unique and not the easiest model to replicate.

In healthcare, I also think of selling in an ambulatory, independent practice environment is much closer to the user and much easier. There are fewer layers between the center and the edge or pain.

I was alluding to this in my last post when I mentioned some of the niche apps, such as Ring-a-doc, that target specific pain points and inefficiencies in healthcare. Another great example is healthfinch, which is building tools to help physicians and staff perform daily tasks more efficiently and effectively. I think the first time I ever heard the phrase "EMR extender" was from healthfinch Co-Founder Dr. Lyle when he was telling me about his company a few years ago. The first healthfinch product is RefillWizard, which automates much of the medication refill process for staff and providers, working alongside the EMR and "extending" its functionality. It’s not an EMR and does not compete with EMRs, but it leverages EMRs as the center to deliver an effective solution and value to users.

These solutions aren’t going after the center, which in today’s health IT universe is the EMR. They are going after the space around the EMR, integrating to different degrees with EMR vendors. They are also solving real problems of users, in both cases providers and staff. And, from what I understand, both are doing well. The examples above are provider side, but obviously on the patient and consumer side, there are many initiatives that go directly to the user, although few are good examples at scale.

But there are lots of white spaces around the EMR and outside the center of the healthcare organization. Those are some of the areas I want to explore in additional posts. If you have some suggestions for companies or organizations that are finding the white spaces, or some areas you think are white spaces that nobody is targeting, shoot me an email or leave a comment below.

TGphoto

Travis Good is an MD/MBA involved with health IT startups. More about me.

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