System Execution Episode 8: Understanding the Healthcare Ecosystem, with Dr. Alan Pitt
System Execution explores the strategy and system behind today’s successful companies. Systems can make or break a company but here we’ll solve physical, technological, and psychological systems issues by connecting listeners with experts who have overcome these challenges in their business.
Dr. Alan Pitt is an attending physician and professor at the Barrow Neurological Institute, and adjunct professor for ASU and University of Arizona. Pitt is a neuroradiologist who has worked with many projects bridging the medical and technology fields.
Many radiologists are involved with the health IT space, he says, because they work with computers all day. However, innovation in the health system is a difficult journey. Innovators and startups in health technology are often disconnected from the medical ecosystem that must bring the idea forward.
“So they’ll take their ideas and they’ll have technical skills to build that idea, and they’ll try to take it forward and they often fail,” Dr. Pitt said. “They often fail because there are nuances to healthcare that they just don’t understand.”
One of the innovative technologies, with which Dr. Pitt has been involved, was an automation tool that helps doctors put pedicle screws for back pain.
“Who’s ever put a stud in a wall knows that occasionally your hands slips as you put that stud in. If you’re not in the right place on the wall, your hand is going to slip," he said. "Well, guess what? When spine surgeons put these screws, hardware in your back vein, they also slip, and when they slip, it’s not so good, because they go into bad things.”
They created a team to build a company: Excelsius Robotics. Dr. Pitt emphasized the importance of having the right people in a health technology startup. They needed voices familiar with healthcare, technology, business and engineering. They were able to partner with a hospital to invest in their project.
The proper healthcare investor is important to a medical technology idea. Even small projects run $250,000 at least, with engineering, lab and clinical time to show the idea is worth it.
Hospitals also aren’t likely to fund the project upfront because they don’t run on the sort of business model as a startup. But instead, hospitals often do an in-kind partnership, trading time and services.
Dr. Pitt recommends going to a small hospital system to get in the door, and to market, faster. Trying the device or software out can take months, or over a year, and funds can run out quickly while the product is still in trial.
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