7 steps to a healthy medical startup
1. Diagnose the Challenge
If you don't already have a "real, visceral understanding" of the health-care market, partner with someone who does, advises Forrester Research executive Eric Brown. For his Revolution Health Group, AOL founder Steve Case recruited seasoned executives from big insurers like UnitedHealthcare.
2. Avoid the Regulators
Stay clear of services that require you to spend a lot of quality time with the FDA. So consider dropping that plan for a high-tech hospital and think instead about a service that delivers hospital-quality health information to consumers, such as WebMD's.
3. Follow the Money
Anything that helps patients, employers, and insurance firms pare down the price of medical care should appeal. "Lowering health-care costs is the name of the game," says Ed Fotsch, CEO of Internet health-services company Medem. A company like Benefit-focus saves consumers money by providing information about plans and providers and helping them to pick the right coverage.
4. Target the Early Adopters
Focus on motivated consumers--say, people with heart disease or diabetes. That's the strategy of Patient Command, a McLean, Va., electronic medical-records startup. "We will start with that market," says co-founder Richard Marks. "Even a fraction of it will allow us to be profitable."
5. Be Specific
Create a focused solution for a specific market. Intuit's Quicken Medical Expense Manager, for example, concentrates on the management of medical bills and flexible spending accounts.
6. Use a Spoonful of Sugar
Many industries have found cash to be a key enticement for reluctant customers. So don't hesitate to aggressively coax consumers into using new health-care programs. Blue Shield has paid its customers as much as $200 to fill in a weekly online health assessment and record their healthy lifestyle activities.
7. Start Making Sense
Consumers need help with information overload. Technology that gives them a leg up on evaluating health-care options--from decisions about cancer therapies to health savings accounts--is in high demand. "We need quality ratings and price ratings," says Lewis Redd, head of Accenture's provider health and life sciences practice. Subimo, for instance, offers advice on everything from selecting a health savings account provider to choosing among hospitals for shoulder surgery.
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