HealthTech Ignite 2023: Navigating Today’s Barriers to Build Tomorrow’s Healthcare
In mid-November, Pender Ventures hosted the inaugural edition of HealthTech Ignite, a conference for B2B healthcare technology innovators, in Montreal at The University of Montreal Hospital Research Centre (CRCHUM). Over 170 attendees including entrepreneurs, investors and healthcare leaders joined us for a day filled with insights and networking. The excitement and interest in transforming healthcare through technology across the continuum of care was palpable. Here are the most memorable takeaways. We hope you find them insightful and inspiring.
Procurement and payment are key to unlocking the countless opportunities in healthcare
There is no shortage of areas to innovate in healthcare. Our more than 20 leaders enumerated the areas they are excited about, from AI-enabled drug discovery all the way to remote patient management (RPM) and ageing-at-home technologies. With increasing life expectancy and rising treatment costs, embracing technology will be key to managing healthcare problems.
More specifically, speakers see opportunities in:
- Behavioural and mental health and the multitude of ways technology can help alleviate the mental health crisis.
- While telehealth is set to persist, challenges like physician burnout are driving better workforce management and automation technologies to emerge.
- AI was front and center, but non-clinical applications of AI were particularly exciting (more below on areas that could be disrupted using AI).
- The convergence of fintech and healthtech. Disruption in the payer ecosystem, personalized insurance premiums based on health data, and streamlined billing processes are envisioned, highlighting the growing applications of fintech in healthtech.
- Tech-enabled clinical trials.
Finding a healthcare problem to solve is the easy part but ensuring that someone in the healthcare value chain is willing to pay for the solution is often overlooked. It’s easier in some segments, like dealing with private clinics, pharmaceutical companies or employers as buyers. Alayacare, Dialogue, and Jane Software found early success there by avoiding the challenges associated with selling to hospital systems or public health authorities in the early stages. The process to sell into these customers is very different and many partnerships in healthtech have failed due to a lack of payment mechanisms. Whether it’s specific budgets or reimbursement codes, the key is understanding who and how the healthcare system will cover the costs. Regardless of the healthcare area, innovators should look out for a real problem where incentives align for payment.
The many paths to company growth
Selling to payers, providers, biotech companies, and others is a tough game across the board, especially for Canadian companies entering the US market. Sales cycles are long, requiring patience and talent to cultivate relationships. Finding the right champion and buyer in a complex, multi-faceted organization can be disorienting.
In discussions with healthtech sellers and buyers, valuable insights emerged. The seller perspective discussion dug into diverse growth strategies for entrepreneurs, emphasizing there’s no one-size-fits-all approach. One strategy, articulated by MEDFAR’s CEO, Elias Farah, revolves around a nuanced combination of organic growth and M&A, deliberately focusing on acquiring companies with less competitive products to ensure successful product transfer and minimal customer churn. Another unconventional path, emphasized by Jane Software Co-CEO Trevor Johnston, prioritizes product-market fit and exceptional customer service to drive growth through referrals and word of mouth. ConversationHealth Co-founder, Richard Marcil reiterated the importance of intentional vertical selection, particularly in the life sciences industry, along with the adoption of a channel partner strategy for rapid global expansion. Entrepreneurs need to remain flexible and creative in crafting growth strategies, recognizing the absence of a singular formula for success.
Our panelists also highlighted the unpredictability of market entry and the importance of adapting products to local systems. Founders, getting hands-on in early-stage sales and building trust was seen as crucial in the early days.
On the buyer’s side, challenges in healthcare procurement processes were discussed, highlighting the contrasting decentralized landscape in the US compared to the centralized approach in Canada. Challenges such as integration hurdles, contract management complexities, and a multitude of vendors were emphasized in the US; while the Canadian model stressed the importance of relationship-building and a structured procurement system.
Some practical takeaways for startups on the topic of commercialization:
- Address urgent and budget-aligned problems, recognizing the significance of data management, interoperability, and an understanding of differing regional healthcare dynamics.
- Be cautious about your AI products and their integration within the healthcare customer workflow. Ethical implications are of utmost priority. Also, preserve the human element (for now).
- If you are very early in your product build-out, strongly consider the enterprise (provider or otherwise) customer’s interest in a co-development deal.
- Death by pilot or success by pilot, pilots are a critical step to adoption, make sure goals are clear and aligned.
(Gen) AI in everything everywhere healthcare… all at once
Everyone agreed all day: (Gen) AI is transforming healthcare big time, bringing real changes. More specifically, panelists dug into how AI is shaking up the pharma landscape, using it to enhance the value of commercial data for more effective therapies. There was talk about the shift from sickcare to healthcare, offering personalized and preventative care, with AI-driven real-time physiological data revolutionizing diagnostics and treatment methodologies.
Leaders from WELL Health, Benchling and ODAIA note opportunities in AI’s potential to expedite drug discovery, optimize operational efficiency, and steer healthcare toward personalized, data-driven solutions, ultimately improving patient outcomes and industry advancements. The panel emphasized the need for innovators to include AI in current product roadmaps. Companies not actively exploring AI integration may fall behind in harnessing its transformative potential.
It’s not all rainbows. Panelists get it. Adopting AI has its hurdles. Addressing issues around data structure and privacy is tricky, especially in healthcare. Panelists emphasized the need for an iterative approach, encouraging companies to start with well-defined problems and gradually incorporate more data. While AI offers immense promise, the importance of robust data and the careful navigation of legal and privacy constraints should remain top of mind.
It’s a back-to-basics era; preserve cash and focus on fundamentals
Speakers reiterated the importance of focusing on the fundamentals of the business in a volatile environment such as the one we are going through. Capital is no longer unlimited and companies need to adapt and re-learn how to navigate volatility, which is expected to continue throughout next year. It’s not all doom and gloom; deals are being made, transactions are being closed, but they are not nearly at the same level in quantity, nor are they reaching the frothy valuations from before. As a result, entrepreneurs need to recalibrate expectations, be extremely thoughtful about their forecasts, cash flow and don’t take for granted that they could raise on the promise of a future hockey stick growth. In fact, the amount of risk investors are willing to take in this market has declined a lot. This means that the confidence entrepreneurs when conveying their ability to achieve returns has increased. In summary, investors and acquirers reiterated the importance of profitability, and strategic thoughtful resource allocation, a focus on high quality revenue and robust clinical validation.
We were thrilled to bring together the healthtech community from all over the country for HealthTech Ignite 2023. Spending the day with some of the brightest minds in healthtech was fantastic. We are glad to be part of building the Canadian healthtech ecosystem, aiming for better patient outcomes and improved health.
A big thank you to our panelists, partners and attendees for making this inaugural event such a success. Huge thanks to our fantastic sponsors and supporters: HealWellAI, AlleyCorp Nord, Osler, CTS, EY, Well Health and ChronoInnovation.
Looking ahead to HealthTech Ignite 2024, be the first to know and sign up to our newsletter. If you are interested in sponsoring or getting involved, please reach out to us at firstname.lastname@example.org.
For more information, please visit www.penderventures.com. Please read important disclosures at www.penderventures.com/disclaimer.Back to top ↖