Peter Dunphy discusses growth areas, challenges and what companies should focus on in healthcare
We’re continuing our blog series featuring interviews with healthcare executives who participate in the Healthcare Summit at Jackson Hole, an invitation-only event in its third year that's designed to be light on formal educational content and heavy on relationship development. In this blog post, we ask Peter Dunphy, partner at Assabet Ventures, to weigh in on healthcare growth areas, what companies should be ‘paying attention to’ and challenges companies face as they pursue their growth opportunities or try to launch new technology enabled models in healthcare.
Dodge: What is Assabet Ventures’ role in the healthcare industry and what impact do the changes in healthcare reform have on your company?
Dunphy: We are a strategic advisory consulting firm working with companies in the healthcare space – primarily health plans, healthcare services and technology companies. Many of our clients are established businesses that are entering new markets or launching new services. Others are evaluating the impact of new entrants emerging and competing in their space. Overall the questions we are asked to address are very much focused on new markets and growth opportunities. We have worked on a wide range of projects from go-to-market strategy, market landscape assessment, business development, and execution support. I think what sets us apart is the team we tap into including Patrick Flynn, Chris Coloian, David Bjork, Simon Trussler and a broad network of industry senior executives. Some of us are focused primarily on consulting, others like Chris and David are currently focused on leading early stage ventures. What’s unique is combining our partners’ and principals’ experience in strategic consulting with their experience as operating executives.
That’s what Assabet Ventures does best, focused and sound insight and relationships to drive business performance. You also asked about healthcare reform and how that’s impacting us. Healthcare reform is clearly driving a lot of activity. There’s a lot of experimentation and launching of new business models by both new and existing players. This is generating lots of opportunities and challenges for those companies – new distribution channels, new decision makers, etc. It seems that the aspect of reform that drives the most questions has to do with the changing roles of providers and integrated health system - driven by reimbursement changes, ACOs, bundled payments, that kind of thing. The one given is that healthcare reform is certainly generating a lot of questions that we can help answer.
Dodge: What are some of the surefire growth areas, or areas of interest, in healthcare or healthcare services?
Dunphy: A caveat - surefire? I wouldn’t characterize anything as “surefire”. However there are a few key areas of interest that we see in our work.
The area that’s most interesting to me is dealing with the question of how to take advantage of new technologies - especially some enabling technologies that have been coming to market over the last few years and seem to be reaching a point where they will really have an impact. I’m thinking of things like mobile communication and mobile health devices that connect people and give new channels of communication, and new ways of engaging people in a very interconnected way. While these technologies have been out there for a while, it seems we are reaching the point – both in technical capability and adoption - where they’re actually beginning to make a real impact. That’s one of the areas I think that’s key.
Another area to look at is how to deal with consumerization – or more active consumers – which is partly driven by the continued increase in consumer accountability for healthcare costs. How consumers deal with choices – or lack of choices – in our healthcare world, may start to look more like how they have dealt with that in the “consumer product” world. As an example in the world of wellness, diet and exercise, there is a huge amount of innovation aimed directly at consumers. In the past, I think that the direct to consumer side was a bit stagnant, with most new activity in employer-based wellness programs. Now there’s a lot more innovation in consumer-directed devices, applications and services, often enabled by new mobile and web based technology. What’s interesting is how the direct to consumer market comes together with the employer-based market.
One more area – one related to consumerization - is the potential microsegmentation of consumers that’s enabled by all the data generated both within healthcare organizations and outside them. One example is the amount of information potentially generated by all those new fitness tracking devices out there. This growth in available data will drive the need to apply new types of analytics. As this happens, it will directly impact how healthcare organizations address and respond to the individualized demands, needs and behaviors of the more activated consumers I mentioned before. We know this is already happening outside of healthcare, but it is really picking up speed in our healthcare world. That is something people should be working to figure out - how to apply this thinking about growth in available data sources and new analytics tools to drive growth in their business.
Dodge: From Assabet’s perspective, are there things companies should be paying attention to particularly in healthcare?
Dunphy: It’s interesting when you consider your question about ‘paying attention’ together with your previous question on ‘surefire growth areas.’ This led me to think about: what challenges companies face as they pursue their growth opportunities or try to launch new technology enabled models in healthcare?
There’s one big challenge with healthcare – It’s really complicated. It always has been that way because you’ve got multiple constituents – payors who are somehow disconnected from providers and somehow disconnected from consumers. It’s always been complicated to figure all that out. This seems to be compounded by new opportunities in the market—changing roles providers, new technology, and so on.
What gets missed by many is how important – and in healthcare, how difficult - it is to figure out the details of bringing your ‘next new thing’ to market. Whether it’s a big company entering a new market or it’s an emerging company launching a new device, this is something to really pay attention to.
More important than having a clever new technology – even one that’s clearly needed by clinicians or desired by consumers – is having a clear plan that deals with such nuts and bolts questions as -- who’s going to pay?, what is a path to distribution? who are the multiple decision makers? can you really get the data you need? what are the conflicting needs of all the multiple constituents?, etc.
That’s where a lot of people in healthcare fall down I think. They jump in with a “cool new thing,” but haven’t figured out these details and built them into their business model up front. We see time and again, whether it’s a big company or a newer emerging company, that this is often forgotten in the heat of excitement about a new idea.