How Health IT Research Benefits Investors
Like it or not, investors are a natural part of the healthcare lifecycle. In some cases, the entrance of investors onto the scene is met with groans; many providers worried over athenahealth’s new focus on “shareholders” instead of their customers. Other times, investors can be met with optimism and hope as great healthcare innovations find the wings they need to take off through VC funding.
For years, KLAS felt the tug of the investment community. Time and time again, the investors came asking, “Will you work with us? We need your data.” KLAS kept them at arms’ length, mostly because we did not want to deviate from our stated mission of improving the world’s healthcare or our core value that everything we do must ultimately benefit the provider.
Eventually, we realized that fulfilling the investors’ need for deep insight and analysis on digital health could help speed up development of effective, provider-centric tools. If our insights drove investors to work with companies that providers feel truly impact their ability to deliver care, we could help shape the future for providers and their tools.
Everything from joint ventures, partnerships, public companies, investment banks, and sales-side analysts need to understand the strengths and weaknesses of healthcare IT companies. At KLAS, we firmly believe that good data drives good investments, and good investments lead to better outcomes.
In order to move healthcare forward, you need innovation, drive, passion, and – in most cases – capital. Our goal in helping investors is to identify the unique traits that differentiate vendors. More importantly, we want to illuminate where vendor strengths and weaknesses lie so investment can lift what needs lifting. In acting as the voice of providers, we can help investors see where healthcare providers themselves would like to see their products and tools grow.
We occasionally see an M&A go wrong, as every industry does. The last thing anyone wants to happen in a partnership is for skeletons in the closet to impede success and limit the ability of investment to effect real change.
How do we help investors in our goal to deliver better patient care? At the end of the day, we want to share solid success principles. Over the last 20 years, we’ve watched healthcare IT companies come and go; we’ve seen accelerated growth and, well, accelerated collapse.
We have begun to identify patterns of success among the companies that go the distance. Most of those patterns can be summarized as “serve vs. sell.”
Through time and experience, we’ve found that customers respond to service-oriented vendors. In fact, we’ve seen this view from providers – seeking a partner, not a tool salesman – expand in recent years.
As healthcare IT becomes increasingly complex, providers must rely heavily on the experience that vendors gain with the application and usage of their tools. In other words, when the required trust in a seller grows, the buyer’s desire to work with a “serve-not-sell” vendor grows as well.
This makes sense when we think about our own experiences with healthcare or anything else – there’s a reason that the phrase “sales oriented” conjures images of sly car salesmen in ill-fitting suits.
Last year at our Digital Health Investment Symposium, we took the opportunity to teach these success principles in depth to the investors in attendance. Investors often sway the overall strategic vision and direction of a company.
We figured that we can help investors see how these customer-service principles lead to financial success and create a win-win situation. Investors can lead companies to financial success while also leading providers and payers to success in patient care and outcomes.
That bigger picture means key stakeholders in healthcare have the chance to listen to unfiltered insights and make intelligent decisions driven by qualitative data.
Ultimately, we’re trying to help investors more deeply understand what providers need. While investors regularly work directly with vendor companies, they don’t always have the opportunity to put providers and vendors in a room together and uncover the bigger picture.
KLAS, Triple Tree, L.E.K. Consulting and the Marwood Group are hosting the 2018 Digital Health Investment Symposium (DHIS18) August 14-15.
DHIS18 will bring together executives from the provider, payer, vendor, and investor communities to discuss topics like customer success.