Vinod Khosla, is one of the US's most successful, maverick tech venture capitalists. Although admittedly knowing very little about healthcare, he speaks compellingly on how medicine will be radically changed from the OUTSIDE, NOT from the INSIDE.
But entrepreneurs, especially those outside healthcare, should be wary of uncritically following this new Messiah.
Steven Krein, CEO, StartUp Health, interviews Vinod Khosla at StartUp Health Festival. Source: Medcity News.
Khosla recently said in an interview at Startup Health and reported in Medcity Online:
I never look at CPT codes, whether something is billable, what the business model is. I fundamentally look at where’s the value-add in this, what’s new and different. Healthcare startups I hate are the ones who help people increase their billing. Zero value-add from my point of view. I am uninterested. ... I’d rather start a new one that has a radical set of assumptions.
Arundhati Parmar, reporting in Medcity News, said that Khosla "not being from healthcare sounds good but it also raises the question of how these novices will get their products or services fit into the clinical workflow if they know next to nothing about those processes to begin with." Parmar challenged Khosla conceded saying,“You make an important point, and maybe I am making an overstatement here.”
For me, Khosla is an engaging speaker, and an investor with very deep pockets. HE may be able to tilt at healthcare windmills, and have the staying power to wait years to force health systems to change. But 99% of the rest of the medtech innovation world would be fools to follow that path.
If you are working hard to solve scientific, engineering, clinical and workflow challenges to ensure a product truly delivers value, why take on another task of redesigning and evangelizing healthcare financing reform as well?
Khosla is right to decry the wasteful "old school" style of innovations: incrementally better, but significantly more expensive devices, where more cost can be added to the health system because hospitals and MDs can bill for it. However, there remain major improvements in healthcare quality and shareholder value WITHIN the current system, or with incremental changes in coding coverage and payment, that don't require the tectonic shifts that Khosla is looking for. In fact, if you proudly take a Khosla-esque "we're breaking healthcare" PowerPoint slide to a financing meeting, unless you are meeting with Khosla himself, you might be ushered out as fast as you went in. If there are 5 similar ways of bringing your technology to fruition, and only 1 of 4 is currently financeable, which approach will you propose at your next financing presentation? I want the one that minimizes risk, delivers an excellent value proposition, and delivers value to the market, and shareholders, fast.
© John Soloninka, Accelerant Health Innovations, 2017
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John Soloninka is the Founder and President of Accelerant Health Innovations Inc. a Meditech consulting company focused on commercialization, innovation procurement and value-based healthcare. He is a medical technology strategist, serial entrepreneur and former investment company CEO.