Can This Service Solve the Problem of Information Overload in Healthcare?

Doctors Suffer Information OverloadInformation overload is an issue that all of us face. Finding a decent signal in the midst of a very noisy world is a difficult challenge. Few are able to master it on a consistent basis. And that includes doctors.

Check out some of these stats:

  • 100,000 scientific journals are now in circulation.
  • 30,000 new clinical trials are funded annually.
  • 1,500 new articles are published every single day.

In fact, if a general practitioner were to spend just five minutes reading each new article published on primary care, it would take 600 hours each month!

Yes, that is information overload at its finest. But the end results are even more staggering:

  • Misdiagnosis is the leading cause of medical error in outpatient facilities.
  • 40 million patients experience delayed or poor care as a result of missing information, including historical examinations, tests, and medication reports.

In this interview with Zvi Mowshowitz, CEO of MetaMed, we learn more about their second-opinion service that is taking on the information overload challenge within healthcare by enhancing medical diagnoses through a robust team of researchers and data analysts.

And if you’re in the medtech space, as you listen to this conversation, think about how you could potenitally partner with services like MetaMed as we enter a new era of healthcare in which patients will be more empowered than ever before.

Interview Highlights with Zvi Mowshowitz

  • What is MetaMed and why does personalized medicine matter?
  • Specific examples of how MetaMed has helped patients with both common and rare diseases.
  • From initial consultation to end product, what does the MetaMed process entail?
  • How much does the MetaMed service cost and will health insurance companies pay for it?
  • Two ways in which the MetaMed “personal health consultancy” can scale.
  • Will MetaMed face increased competition in the future?
  • Why Zvi transitioned from the gaming space to healthcare.

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3) Read the following transcript from my interview with Zvi Mowshowitz.

4) Or, click here to download a copy of the transcript from my interview with Zvi.

Read the Interview with Zvi Mowshowitz

Scott Nelson:             Hello, hello, everyone.  It’s Scott Nelson, and welcome to another edition of Medsider, the place where you can learn from experienced med tech and medical device thought leaders, and on today’s program we’ve got Zvi Mowshowitz. He is the CEO of MetaMed. Zvi was a world-class strategist and gamer, and was a Magic: The Gathering World Champion, member of its Hall of Fame. After retiring from that, he founded a profitable startup that was eventually acquired by Pinnacle Sports. Zvi holds a degree in mathematics from Columbia University. Obviously, that was a more formal intro, but without further ado, welcome to the program, Zvi. Really appreciate you coming on.

Zvi Mowshowitz:       Sure, happy to be here.

Scott Nelson:             Okay, so I’m going to start out our conversation with a quote from, I’m not sure if it’s the founder or a founder, of MetaMed, Michael Vassar. Let me quote him first. He states, “We used to rely on doctors to be experts and we’ve gradually crowded them into being something like factory workers working in a constrained system where their job is to see one patient every 8 to 11 minutes and implement a by-the-book solution. What I’m talking about is creating a new expert profession where doctors evolve in a more patient-focused and more caretaking profession, and then scientists to evolve into a more argument and critical analysis and management of technology profession.”

                                    And so that was kind of a long-winded quote, but it really stood out to me and really piqued my interest. That’s why I decided to reach out to you guys. 00:01:26 But with that quote in mind, can you give us sort of the thesis of MetaMed? And then we’ll maybe dig in to where this idea was hatched and how you got involved.

Zvi Mowshowitz:       Right, and that very much speaks to the core of what MetaMed is all about, which is there is no way that one person, one doctor, can be all of the things that we need from the system, can process all of the information, can master all of the different domains. It’s impossible, right? I have the greatest respect for doctors, but most of the time they have a minimal amount of time to spend on the patients, they have to master lots and lots of specific domain knowledge in the areas where they are true masters and experts, and there’s no way that one person could also master all of the complementary skills that could allow you to understand all of the scientific problems involved in finding the best possible care, and the system just doesn’t allow them to spend the kind of time required to do that.

                                    So, MetaMed was founded with the idea that we’re going to bring together all of the complementary skills that allow you to combine what the doctors are masters of with all the other ways in which people process and understand information, figure out what’s going to result in what, and make better decisions that result in better outcomes, together with collaborating with physicians and the existing system.

Scott Nelson:             Got it. So we’re surely going to get into more detail in regard to kind of the processes and services that you have in place within MetaMed, but correct me if I’m wrong, but the idea there is that you’ve got a team of researchers that basically research certain diagnoses or disease states on behalf of patients and/or I guess physicians, and you put together almost like an individualized report for that particular customer, in this case it would be most likely a patient. 00:03:33 Am I understanding that correctly?

Zvi Mowshowitz:       That’s exactly right. So far, it’s usually been the patient.

Scott Nelson:             Yup.

Zvi Mowshowitz:       And so what they’ll do is they’ll come to us and they’ll say, “This is my situation, this is the decision I have to make or this is the medical problem that I have, and the existing system has either failed me and the solutions people have offered me aren’t working,” or, alternatively, “The system is providing me with more than one solution, I don’t know what to choose,” or, “Help me optimize the implementation of what the system wants to do. Find me the best place to go. Find me the best dosage, the best routine, the best sequence, the best plans that I can do to maximize what’s likely to happen to me.”

And then, we’d assemble a research team. So, every time we have a medical person to do the intake, to provide initial information, another medical person to review what we found and approve it and make sure that the things that we found check out and make sense and will benefit the patient. And then we have a research team to complement them, which can also include more doctors, but also includes people who have been trained in complementary skills, especially statistics, and we think of the ways to analyze research and read papers and evaluate that kind of information.

Scott Nelson:             Got it.

Zvi Mowshowitz:       And so I’m one of those team leaders in addition to being CEO. At first, I did all the cases, now I do about a third of them. And I will then [00:05:11] a research team, generally between one and four other people, and then I will assign them areas [00:05:20] we go locate the research. If we have enough budget, we go for primary literature, if not we go for secondary literature. We read it, we extract the information. We actually analyze their procedures. We figure out whether or not what they’re doing provides strong evidence for what they’re claiming, and then them provide a picture of what we believe the different options would actually do.

Scott Nelson:             Got it.

Zvi Mowshowitz:       Right? What the risks are, what the benefits are. Then we provide all that information to the patient and their doctors, and they can then make the decision. We can’t, nor do we want to, tell them what to do. It’s not our place to say, “You should do this,” or “We recommend doing this.” It’s our place to say, “This is what would happen.”

Scott Nelson:             Got it, okay. And there are a couple of other questions I want to ask around that particular process, but before we get there, this idea is fascinating, and I mentioned earlier that quote from Michael really piqued my interest in what you guys are doing at MetaMed, primarily because when I talk to friends or family members about what I do in the trenches within kind of the med tech space, I often call it sort of the unhidden benefit of being involved in healthcare, sort of the behind-the-curtain look, and I get to work with physicians, especially specialist physicians on a daily basis, and even within a relatively small geography, they all practice and treat a disease state completely different, or what I would consider completely different. And most of the patients just think the doctor’s word is golden, but they don’t realize that those are humans too, they suffer just like all of us, they suffer from information overload.

And I think there are some really interesting stats on your website, let me just name a few of them. “The National Library of Medicine adds 34,000 new references every month. There are 560,000 new articles published annually. A hundred thousand scientific journals are now in circulation,” etc., etc. And so this is a really interesting concept because I think healthcare would really, really benefit from taking a step back and realizing that physicians, they too suffer from information overload, and so there’s got to be a different way to sort of solve that problem. 00:07:33 And that’s what you guys are doing in essence, correct?

Zvi Mowshowitz:       Yes, that’s what we’re doing, not information overload but requirement skill overload. I thought about, you know, like many kids do, right? Whether or not I should look to be a doctor.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       And then I realized, “But I just can’t hold this many facts in my head. My memorization skills just aren’t good enough. I can’t do that job, and I have so much respect for people who can.” But at the same time we’re asking them to do an impossible job, which is to have at their fingertips all the information when everything could possibly go wrong with a human being…

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       …even if only in the specialty area. And so what ends up happening is, of necessity, they learn what to do, is through practical interaction, through experience, through conversations with other doctors. And so what we find is that different doctors will think different procedures are the correct procedure for a given situation and won’t even necessarily even know about the alternatives. It varies a lot by region. You’ll see like people in one area of the country will do things completely differently from another area of the country, and the people in other countries will do different things still, even when they all potential have access to the same resources.

Scott Nelson:             Got it.

Zvi Mowshowitz:       And so, at the same time, it’s not just the bare knowledge of the situation, it’s that what doctors will learn in this huge array of skills that eats away their entire young adult lives…

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       You know, I was studying a completely different set of skills that would not allow me to do their job but do allow me to do a much better job than their set of skills enables them to do at evaluating this physical strength of a claim, for example.

Scott Nelson:             Okay.

Zvi Mowshowitz:       Right? Or forming a [00:09:27] distribution over the possible [00:09:31] of the world of what might happen based on a given set of information if certain options were taken.

Scott Nelson:             Right.

Zvi Mowshowitz:       Right? So you need to complement them in time and complement them in skill and complement them in knowledge.

Scott Nelson:             Got it. So let’s get into like the actual process that you folks follow there at MetaMed in your team, which I want to do ask about sort of the team that you’ve built there, because it’s incredibly impressive. 00:09:57] But before we go there, is it possible to maybe walk me through a case study or an example of a patient that you’ve helped? And I certainly don’t expect you to name names, but maybe just an example of a patient that’s come to MetaMed and said, “I’ve got this problem,” or “I’m dealing with this,” maybe how specifically you helped them with their challenge.

Zvi Mowshowitz:       Okay. I mean, obviously, one of the big problems in medicine is confidentiality.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       So it’s always tough to use specific examples. So let’s think about the most recent case that I just finished, which was a mother came to me and their child had an unknown condition, and she had spent a long time going through the system, didn’t know what it was, was trying a lot of different treatments, going through a lot of different tests, examining a lot of very long shots, and things were still progressively getting worse. And so I looked at the situation and I said, “Well, there’s so much…there’s this giant keep of medical records and it’s not something that I understand all of,” but we looked through it and we came to the conclusion—first, I had my wife Laura Baur talk to this person and we did an intake, and found out the situation, what had gone before, what attempts had been made, what had been found.

Scott Nelson:             Okay.

Zvi Mowshowitz:       And then, we looked at the record and we said, “Okay, there’s a lot of potential things that we know about.” We [00:11:32] what had been found already, but there was this unique aspect to the situation that isn’t…you know, this thing that’s unique about this person that looks like it’s the most efficient place for us to look because there’s a good chance that this is what it is. There’s a good chance this is what it is because what’s the chance this would happen coincidentally? You know, without getting into too much detail…

Scott Nelson:             Yup.

Zvi Mowshowitz:       So our researcher looked at it, found that when the same thing—there have actually been for other reasons animal studies of the same thing, and they found that when this happens, very similar symptoms to what this child was reporting occur.

Scott Nelson:             Okay.

Zvi Mowshowitz:       So we said, “Okay, this obviously makes it vastly more likely.” So we looked into this in more detail. It all seems to make sense. Actually, in this case, it had never been seen before.

Scott Nelson:             Okay.

Zvi Mowshowitz:       So it was not a hypothesis that hadn’t been mentioned before, but it was more a case of like people thought it might be as opposed to it probably is, or [00:12:45] illustrated to her exactly how this would be demonstrated, why this would be something to presume, and then was able to find a potential treatment that while a relatively long shot due to the nature of the situation…

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       …was worth exploring in more detail, and was able to recommend…not recommend, but was able to note that there were certain things that were being done that if it’s sort of the case wouldn’t do anything. They would only involve additional costs and additional inconvenience…

Scott Nelson:             Okay.

Zvi Mowshowitz:       …and additional side effects. So the only reason to continue them would be if this potential cost was incorrect. So this is one of the different situations that we do.

Scott Nelson:             Yeah.

Zvi Mowshowitz:       Another recent case was the client came to me and said, “I potentially have this…I have cancer. They’re attempting to deal with it, but it turns out that they haven’t been able to remove it and it’s now stage III. What should I do?” There are a lot of different drugs out there. There are a lot of different chemotherapies. And then, I went through and I examined the literature and the evidence behind each of these different possibilities, and I gave a likely effective survival benefit to each of the different [00:14:06] treatments and treatments in combination, and explained the potential side effects, and gave a basis by which to make a decision depending on what was found. I [00:14:17] between them.

Scott Nelson:             Got it. Okay. So taking a step back, so most of the time…and I like the fact that you brought it to sort of different spectrums in that you helped a patient and a family with a really rare, extremely rare sort of…

Zvi Mowshowitz:       Yes.

Scott Nelson:             …disease, and then the other patient had cancer and dealt with probably quite a few different oncologists, which is, you know, quite common in our world today. So, two different ends of the spectrum. But in terms of the process, so usually it’s a patient that comes to you with a certain medical record. [00:14:51] Do they submit it via email? Is it via phone? And then what happens after you…is that where it usually starts, with the medical record? And then talk to me a little bit about like the research part. Are you looking at journals? Give me at least a little bit of an overview in regard to the actual research that goes on typically.

Zvi Mowshowitz:       Sure. So there are kind of two different parts to consider. So the first part, we can say the process for us starts with the conversation that leads to the contract and the agreement to do things, which leads directly to the intake where we will have one of our medical people talk to them, preferably in person. If not possible in person due to location, we’ll do it over Skype.

Scott Nelson:             Okay.

Zvi Mowshowitz:       And this will generally take at least an hour, often will take several hours. We’ll talk to them, gather all the information. And a lot of what we’re looking for in that conversation is not only what is the situation medically, what are the facts of your case, but also, what does the patient really need from us? What do they want to know? What do they value? What are they looking for?

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       Because it’s all too often that the medical system is forced by its nature to make presumptions that everyone wants what instinctively they maybe “should want,” and to focus primarily on the same measures of health for everyone, and some people have very different preferences.

Scott Nelson:             That’s a great point, yeah.

Zvi Mowshowitz:       Yeah. And so we say—one thing we have to push back [00:16:24] with our medical people all the time is they will always try to go after instinctively whatever the big glaring health threat is with the patient, the big concern, and we have to sometimes say, “No, that’s not where our comparative advantage is. That’s not what the patient came to us for.”

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       Right? That’s something that the patient has to deal with, but that’s not our task here. And maybe they want something else, we have to give them that. That’s what’s going to help them.

Scott Nelson:             Got it.

Zvi Mowshowitz:       We let the patient run the show, in that sense. So then, once that happens, once that’s done, they’ll brief me, generally. Sometimes they’ll brief Sarah Constantin, who is our other active case manager who does a lot of cases. We are branching out to add So-Han Fan and Adam Widmer, as we scale up, as additional managers. And then often I’ll learn with the cases, and then based on what the cases are, I’ll choose even a manager that’s appropriate that has more area and background knowledge of the case, that’s more specialty. I’ll choose the team based on the specialty area. So you want like one person to handle a lot of different cases of cancer, even one particular type of cancer, because all the research they’ve done before they already have at their fingertips.

Scott Nelson:             Got it.

Zvi Mowshowitz:       Right? Everything they’ve done before. Like specialists are important to the medical system for a reason. We’re creating our own specialists as we go as well.

Scott Nelson:             Sure. Okay.

Zvi Mowshowitz:       So I’ll assemble a team with the specialists for the particular situation, and then… So then we’ll scour the literature, and generally this involves packing on [00:18:02] as the primary way to do that/use [00:18:09] them references to and from the initial things that you find, and from the initial things that experts who you ask questions about refer to as, “These things are important. These are the key things that people are talking about. These are the key things that reflect the developments in the field very recently.”

                                    And then, the great thing about the literature is that if something is important, people will reference it all the time…

Scott Nelson:             Okay.

Zvi Mowshowitz:       …unless it’s very recent. So you know that even if your initial searches don’t turn up everything, if it’s not very, very new, it will be found because it will be referenced by any reasonable set of things that you find. You use that to find the rest of them. As long as you do a careful search of the things that are recent, you also, if you have sufficient time and budget for this, you find an expert in the field and you ask them, you know, you’re trying to keep up with this particular…you know, this area you are keeping up, you know…

Scott Nelson:             Yeah.

Zvi Mowshowitz:       …as best you can. Well, what’s going on? What’s the new hotness here? What are the recent developments that we should be sure to cover? And then we have our literature, and then we’ll look through that literature. If we have a lot of time, we’ll be looking for primary stuff only and we’ll read it all cover to cover and we’ll extrapolate based on everything. If we have a limited time, we’ll try to use [00:19:28] value of information. We’ll say, “What—” It’s very important during the intake to figure out exactly what matters to this client and this patient, this situation. And then you say, “Okay, this patient’s situation says we need to find out the effectiveness of the various treatment options, so we’re only going to look at things that bear on these treatment options…”

Scott Nelson:             Sure.

Zvi Mowshowitz:       Or offer alternate treatment options that show enough promise quickly to be worth examining. And then we will look at those things, and then one by one gather up information to either rule them out or make it clear that it should be part of the decision tree, right? Something that we should look into in more detail. Those we would narrow in.

And then, when you’re reading the literature, the two things that are most important in the evaluation are you’re watching out for the [00:20:26] methodology of what’s being done in any study, because the different [00:20:33] methodologies that are done sometimes because people intentionally choose very robust systems and sometimes less robust systems, because either it will cost too much money to do it the other way or be too dangerous it would put too many people at risk. They can’t do it in a more robust fashion. They have to use very small sample sizes or they can’t do double blind or anything like that.

So you have to look at the [00:20:55] design, which can be better or worse, not affecting those things, and then figure out, “Okay, how likely is this to give the right results? How much evidence does this result signify?” And you also have to look out for bias.

Scott Nelson:             Got it.

Zvi Mowshowitz:       Because there’s a huge problem in medicine that, you know studies don’t happen at random. Studies happen because someone decided to do them, and that person often, or that corporation especially, is looking to give off a certain impression…

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       …is looking for a certain finding. You have to keep that in mind as well, right? You have to say, “Well, there are no negative results from studies like [00:21:34] would there be? Would they have been published even if they had happened? Are these engineered to find that? Would they have tried various different things of similar type until they found one that succeeded?”

Scott Nelson:             00:21:44 And you make room in your research to allow for that sort of bias?

Zvi Mowshowitz:       Absolutely.

Scott Nelson:             Wow.

Zvi Mowshowitz:       You would never… It’s inherently what you do when you read a research paper.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       Right? Whatever you’re looking at, any source of information, in fact, in the back of your mind should always be, “Who’s telling me this? Why are they telling me this? How did they go about getting this information? Does this actually reflect on what’s going on?” [00:22:19] if someone is telling you something at all, that choosing to tell you that thing is often as interesting as the content of the message.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       And this is sort of, you know, a lot of the people involved in this company came from the community that we’ve grown out of the less wrong and [00:22:37] biased websites, and we dedicated a lot of our study to the questions of, as it says in the [00:22:43], overcoming bias…

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       …how to locate these types of biases and how to account for them, how to adjust such that we’re not making the cognitive mistakes that humans always, always make, because that’s how we’re wired. One great source for this is Thinking Fast and Slow [00:23:02] recently, which is a great illustration of how the human brain just doesn’t work properly in these senses because it has to use heuristics and shortcuts and biases in order to make the decisions in general, but those decisions fail you in situations the human brain wasn’t evolved to deal with, which are things like scientific double-blind studies.

Scott Nelson:             Right.

Zvi Mowshowitz:       Right? That would never have happened.

Scott Nelson:             So I’m going to stop you right now and ask you questions. I can imagine there’s a clinician or a physician that’s listening to this and is going to ask… I like the idea that you guys try to eliminate the bias. 00:23:41 But how would you respond to two issues, and they’re kind of on two different sides of the coin in that, one, the overwhelming majority studies would never actually be published if they weren’t funded by industry, so that’s one side, and the other side of the coin is the specialist physician that practices in his or her particular area and says, “I know that there are a lot of studies that point to this, but in my experience, with my base of patients over the course of treating a thousand different patients, my algorithm is actually quite different than what most of the studies would point to.” How do you respond to those two sort of statements?

Zvi Mowshowitz:       Those are two very different objections, obviously.

Scott Nelson:             Uh-huh.

Zvi Mowshowitz:       So you have to deal with them on their own terms separately. So the first objection is a very good point, right?

Scott Nelson:             Uh-huh.

Zvi Mowshowitz:       Which is that you need to get the money from somewhere. You know, a scientist or a doctor who comes up with some novel idea doesn’t just have a hundred million dollars lying around. They have to go to a corporation. And the answer is, you don’t throw out information because it’s coming from someone who has a motivation, but you do give special care to whether or not they have done things in the proper fashion, whether or not they have provided a structure that protects you from the facts that they want you to find a certain result.

And sometimes the study is not being done by someone who has a financial interest in the situation or a bigger outcome, and in those cases you even give it a lot more weight than you would normally give it. When a corporation is funding a trial on their own drug, you don’t discount it entirely, you just keep that in mind that these choices were made with an eye towards sending the message that they want you to hear and that the message was written in a way to give off the impression that they want you to have.

Scott Nelson:             Got it.

Zvi Mowshowitz:       Right?

Scott Nelson:             So you’re not saying, “Don’t throw the baby out with the bathwater,” you’re saying, “Perhaps there’s a little bit more skepticism warranted with some of these maybe well-known studies and the biases that kind of come along with those.”

Zvi Mowshowitz:       You have to be much more careful, right? To watch out for these problems. And you have to assume that, you know, all the choices that were made were made such that they were the best choices they could have made given their motivations.

Scott Nelson:             Got it.

Zvi Mowshowitz:       And you look at these studies, you have to like [00:26:07] make sure to even undo the framings that they make. You know, people will use different ways of stating the same statistical fact because they give off different impressions, and this can fool even the most advanced statistical minds…

Scott Nelson:             Got it.

Zvi Mowshowitz:       …and the best doctors, because, unless they’ve specifically been trained to avoid it, they don’t even know it’s happening. Even if you have, it still happens. You have to fight it.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       Now, in terms of in my experience, so this is obviously the difference between anecdotal evidence built up over time and statistical evidence that comes from studies. So a doctor’s anecdotal evidence is still valuable, but it’s very easy to get caught by that [00:26:55] information because we don’t naturally process it properly into getting the wrong idea.

Scott Nelson:             Okay.

Zvi Mowshowitz:       It’s also very possible for a doctor to have a situation that because of who they are and what they’re dealing with differs greatly from the cases being described in their studies. So, often the quality of implementation of a given type of care or the attention to the details of the situation and the ability to make the right decision based on exactly who the patient is and manage all these problems matters greatly.

Scott Nelson:             Got it.

Zvi Mowshowitz:       So some procedures are relatively easy and carry very little risk, and you can do them pretty much anywhere and you’ll see more or less the same results. Others are highly sensitive to the skills of especially the surgeon performing the procedure. And so sometimes someone will in fact just be that good…

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       …and will have the ability to get results that can’t otherwise be gotten. And so you do need to keep that in mind that, you know, any pilot program, anything where you pay a lot of close attention to one specific thing, you get better results and you can make things work that then you aren’t able to replicate. This is true across the board. This is not just medicine. And we also know for example that the more times a given surgeon had done the same procedure, the better the results are.

Scott Nelson:             Right.

Zvi Mowshowitz:       Right?

Scott Nelson:             Absolutely. It’s a skill set.

Zvi Mowshowitz:       Absolutely.

Scott Nelson:             Yeah.

Zvi Mowshowitz:       Yeah. So you would give a different set of possible outcomes for someone who is capable of going to the best, you know, who can step outside of, you know, doesn’t have to worry about their insurance network, who doesn’t have to worry about where they are and how much time they can allocate and so on, and can search out the very best, the special of the special in this particular thing. And we can and do help with that. We identify, okay, here’s the person who is the best, who’s expectations would be different than if you just went to someone else, and that can change what the best action is for someone. You know, often that will change the outcome when it’s otherwise going to be close.

So I would say, you know, sometimes, he says, “Well, I’ve done a thousand of these,” and I do something different, and my response if I was talking to him would be, “Yes, but it doesn’t necessarily mean that someone else should do it too, especially if they haven’t been tested and replicated.”

Scott Nelson:             Yeah, that’s a fantastic point. Yeah. Even though it may be a very valid treatment algorithm, that physician that’s in a different part of the country, or world for that matter, may not have that particular skill set that…

Zvi Mowshowitz:       Yeah.

Scott Nelson:             Yeah.

Zvi Mowshowitz:       These rely so much on tacit knowledge, right?

Scott Nelson:             Sure. Right.

Zvi Mowshowitz:       Seeing as that the doctor doesn’t necessarily know…they know them, but they don’t necessarily know how to articulate them properly or they just have it [00:29:48].

Scott Nelson:             Okay. 00:29:49 Before we move on to some other ideas outside of the typical process that you folks follow, what does the end product typically look like for most of your patient customers? Is it a report or do you go beyond that and direct them to certain physicians? What is that?

Zvi Mowshowitz:       One second.

[Side conversation]

Zvi Mowshowitz:       She works with the company as well. So…

Scott Nelson:             The end product. 00:30:43 What does that typically look like?

Zvi Mowshowitz:       Right, the end product. So the end product, at its core, the end product that you’re buying, is a report where we write down, we say, “Here are the sources that we used. Here is the reasoning behind what we found. Here is what we found,” and then we organize it in a way designed to give you the information you need to make your decision. The question I’m always asking when looking after the researcher comes back with an alpha version is, I put myself in the mind of the patient, I need to make a decision, does this information help me? Does this tell me what I need to know? What’s left? Am I actually being given the necessary information to make the decision and know how to implement it? You know, often people will give advice and won’t provide the necessary steps and there will still be mysterious portions of the implementation.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       Right? Because the person saying it will know how to do it, but the person hearing it won’t know, and often the details, especially in medicine, can be very important. So the first thing we do is [00:31:55] the report. But it isn’t the report, especially for larger cases, more complex situations, bigger budgets, you also speak to them. You will do an interview with the manager of the case or the medical of the case as appropriate, and this person will sit down with you and will explain the contents of the report and their practical implications to you, answer your questions, and make it clear how this carries forward.

If you need more from us, we talk about whether or not we might want to continue if there are things that the addition would still be helpful to you. We explain that there’s something that doesn’t make sense to the client, the patient doesn’t know. Sometimes they’re two different people. You know, often you’ll get a family member who comes to us, right? And they’re not the patient.

Scott Nelson:             Yeah.

Zvi Mowshowitz:       And so it’s important to keep that separate. And often they have different concerns and somewhat different needs – keep that in mind too. And you know, you sit down, and they’ll often grill you and they’ll through for the report sentence by sentence, and they’ll say, “What does that mean? Are you sure about that? Like how do you know that?”

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       And then you’ll explain it. And then, in some cases it’s relatively straightforward because we’ve been asked a relatively simple question. You don’t need to talk to them that much or some quick email will suffice to explain what’s happening. Other times, you can sit down for hours.

Scott Nelson:             Got it.

Zvi Mowshowitz:       [00:33:23] Both of these things have happened to me.

Scott Nelson:             So I imagine those listening to this would think, you know, this idea of a very robust second opinion is what healthcare really should be, right? Right now, it’s usually very difficult to have a candid sit-down sort of conversation with a specialist physician, but this is ideal. However, it seems like it would be really expensive. And I know if you go to MetaMed.com, your website, there’s the free consultation. Certainly, this process isn’t free. 00:33:56 But can you explain sort of what the costs typically entail? And obviously, I presume insurance companies are not paying for this right now. Is there a typical cost that you allow or is it all over the board?

Zvi Mowshowitz:       So you are correct that insurance companies do not cover this, and we do not deal in any way, shape and form with insurance companies, and that has allowed us to provide our service at all. So the range of costs, we have had cases as big as 250,000 dollars; we have had cases as small as 5000 dollars, which is the minimum that we accept.

Scott Nelson:             Okay.

Zvi Mowshowitz:       Due to the cost of doing the intake process, [00:34:37] ourselves [00:34:38] the situation, acquiring [00:34:40] medical records, briefing everybody and so on, [00:34:44] makes sense to do… You know, the intake process itself essentially costs 5000 dollars, plus [00:34:50] with the case, initial lookover [00:34:52] to do less. Most cases that come to us [00:34:57] the majority are worthy of, yeah, sort of have enough problems involved in them for 10,000-15,000.

Scott Nelson:             Okay.

Zvi Mowshowitz:       And, you know, this process is obviously not cheap, that’s a lot of money for a lot of people, but for some people it’s not that much money, certainly relative to their health, and also relative to their healthcare and their healthcare costs. So if you’re deciding between very expensive procedures or the procedures that could potentially cause major effects on your life, you end up saving money rather than spending money…

Scott Nelson:             Right.

Zvi Mowshowitz:       …when you make sure you get it right. Getting these things wrong is ridiculously expensive.

Scott Nelson:             Right. And I think that that’s such a unique aspect of healthcare in that if the physician or the hospital where you go or whatever setting it is, if they do something wrong or if something goes bad and it’s potentially their fault, well, yeah, maybe there’s a lawsuit down the road, but in the immediate term, the patient is responsible for paying for that. You know, if it means multiple days in a hospital, etc., it’s not the hospital or the physician that pays for it. It’s the patient. And so you bring up a very good point that maybe there’s a higher upfront expense, but it could potentially be rewarding down the road for sure. 00:36:18 So in a typical-case example, do you give a quote upfront or is it as the case unfolds then you bill out a certain hourly rate, or how does that work?

Zvi Mowshowitz:       So we do charge for our time, right? The resource that we are spending is people’s time primarily.

Scott Nelson:             Got it.

Zvi Mowshowitz:       There are some minor expenses that we charge whatever we pay, but beyond that it’s mostly our time. However, we do work on the contract, you know, choose-the-amount-upfront basis, because that is what people are comfortable with. Different people have different budgets they can afford to spend on their care where they’re comfortable with, so we talk to you first about what you’d like from us. We tell you what we believe this will cost, and then we do the best shot we can with that amount available. Because one of the problems in healthcare is that these problems, you can always dig deeper.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       Right? You can always say, “I’m going to leave no stone unturned.” In theory, you could even fund your own labs, do your own experiments, you know, advance the cause of science.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       But you have to stop somewhere. So the way that people are almost always most comfortable is this is the problem at hand, and then we say, “Okay, in order to give you the type of health that you want, we think this is the appropriate budget for that,” and then we’ll agree on that budget, and then we’ll work to that budget.

Scott Nelson:             Got it.

Zvi Mowshowitz:       And then, in general, if it costs somewhat more than that in terms of what we would otherwise bill, we will do what we can to make sure that we go the extra mile.

Scott Nelson:             Okay.

Zvi Mowshowitz:       And if we had extra, then we’ll look in more detail at places that we would otherwise have looked in less detail and/or we’ll examine more issues that you have with the remainder of the budget.

Scott Nelson:             Got it.

Zvi Mowshowitz:       Because there’s always more to do.

Scott Nelson:             Okay. So almost like a personal health consultancy, I guess, to a certain extent. 00:38:25 With that said, this current model, do you see it evolving over time? And maybe the better question is, can you scale this up where maybe that price can begin to lower a little bit? Maybe speak to that.

Zvi Mowshowitz:       Right. So there are two types of scaling that can and need to be done. The first type of scaling is simply 10 [00:38:50] enough other people do what we are able to do. And this is very hard. To be able to properly evaluate the medical literature in this fashion and to work with all these problems requires a large number of skills that are rare, and so we have been slowly attempting to find the people who have what it takes to do that and we’ve been instructing them. And this is our biggest going forward in my opinion, is that we need to prove that we can scale in this sense.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       And so far, you know, we have myself and Sarah, who has handled most of the cases. We have several people I’m confident have been trained and can and will in the process of taking on cases themselves. Can we keep doing that as we need to reach out farther and farther into the world [00:39:45] and with people we’ve had less and less contact with and who share less and less of our mean space? And I am confident that we can do this, but it is the most likely problem that will ensue for us.

                                    The other type of scaling is, can we make this process faster through the fact that we’ve done it enough times and we’ve systematized it and we’ve created automated assistance and preexisting knowledge such that we can bring the price down?

Scott Nelson:             Got it.

Zvi Mowshowitz:       And the answer to that is absolutely yes. Not right away, you know, but every case we do, we bring the knowledge of every case we’ve already done, and [00:40:26] that means we can start at a farther-off point, we get to have better, more efficient procedures. We are innovating in this realm as we go. So every time we do a new case, we’re learning about the best way to do these cases…

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       …the best way to track down the right studies quickly and efficiently and not miss anything, that rightly differentiate where the highest value of information is and the right way to do all of these things.

Scott Nelson:             Got it.

Zvi Mowshowitz:       So we’ll get better at it, and we’ll also be able to design systems and have preexisting findings.

Scott Nelson:             Okay. 00:40:59 And so with that said, I mean, I can almost potentially see this becoming almost like a human-powered sort of Google for health, maybe similar to what Ben Heywood and their team is doing with PatientsLikeMe, but could you somewhat pull all of this data and knowledge from the case studies that you’re doing at MetaMed where someone could potentially pay for a service and almost do the research within MetaMed themselves? Do you see where I’m going with that?

Zvi Mowshowitz:       Yeah.

Scott Nelson:             00:41:31 Is that viable? Is that a viable option [00:41:32]?

Zvi Mowshowitz:       Well, so in my experience, right? With my family and my community, whenever anybody has had their own medical problems and they do the work themselves…

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       They will do what MetaMed does, but they will do it on their own behalf, or if they’re too sick to do it, their friends will do it, their family will do it on their own behalf, because it’s so important to consider this information and to get it right.

Scott Nelson:             Right.

Zvi Mowshowitz:       And then, so this is one of the inspirations for it, is people who have more training at this, who have more practice, more experience, can obviously do it better or can supplement, but it’s absolutely true that even now without MetaMed’s help you are very much incentivized by the system to do this yourself, and if you are capable of it, then you’ll be better off if you do it than if you don’t do it. It’s well worth your time.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       You know, because it’s your health you’re dealing with. You need to do this. It’ll make you better informed and you’ll often get information that you can pass along. So we can almost certainly provide both advice on how to do this, you know, guidelines for how to go about doing this yourself, and provide some part of a process for people who otherwise couldn’t afford the depth of attention that their case deserves.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       So I say absolutely, and I want to encourage everyone out there to do this themselves to the extent that their case is something they can handle or something that they can’t afford to have handled by someone like us when there’s enough high value, right? When you have to make a decision about your health, you have to make a decision about your health, you should gather as much information as you can.

Scott Nelson:             Mm-hmm. Got it. 00:43:18 We’re running short on time here, but before I ask you a little bit about your background, what do you see the competition looking like in another couple of years? Do you see MetaMed competing against another similar service?

Zvi Mowshowitz:       So there are similar [00:43:37] services that offer similar services that are out there today, but as far as I can tell, they are vastly weaker. They charge more money at the bottom end and offer much less. But I certainly expect as MetaMed grows, as MetaMed succeeds and paves the way for this, that others will attempt to follow us.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       And some of them will succeed. And I think that’s great. I think that competition is good for all involved.

Scott Nelson:             Yeah.

Zvi Mowshowitz:       And we will make them better and they will make us better, and they will show us new things and we will show them new things, and together we’ll [00:44:19] improvements and we’ll look into the results. You know, the patients that get our reports are free to share them, and we encourage them to share them with whoever they want.

Scott Nelson:             Mm-hmm.

Zvi Mowshowitz:       It’s their choice. It’s their information. They don’t have to if they don’t want to for privacy reasons or any other reason, but we hope that more people benefit from what we’ve found.

Scott Nelson:             Right.

Zvi Mowshowitz:       And if someone else is out there doing the right thing, benefitting people, we think that’s great. We think that we bring a lot of unique human capital and skills to the table that will be remarkably as hard to duplicate.

Scott Nelson:             Sure.

Zvi Mowshowitz:       And so we do think that we can maintain our edge over the course of a long time, and not just because we’re first movers, effectively.

Scott Nelson:             Yeah.

Zvi Mowshowitz:       Yeah. If someone beats us, that’s great.

Scott Nelson:             I can almost see some of the larger health systems, at least across United States anyway, almost either setting up their own MetaMeds or requiring a MetaMed-like shop within their own health system to really add more value to the patients that they could potentially reach. But anyway, that’s a whole other conversation. 00:45:35 Last question before we conclude here, because like I mentioned we’re running short on time. I gave a little bit of an intro, or I should say I provided a short bio when we first started this conversation, but you went from sort of the gaming space, and then your startup that sold to Pinnacle Sports, to healthcare. Why? Why that transition?

Zvi Mowshowitz:       Because, so I started out, you know, as a gamer, I majored in mathematics. I love solving interesting problems. I love figuring things out, figuring out proper procedures, optimizing [00:46:11] rule sets. That stuff really appeals to me, and the people who it appeals to are people that appeal to me as well. So I’m drawn to those communities, I’m drawn to those activities, and I excelled at those activities.

But there’s a problem with those activities, which is at the end of the day, when you develop a great strategy for playing a game and you prove it in competition against other people, everyone’s had a great time, but what have you done? What have you accomplished, right? You haven’t saved lives. You haven’t changed the world. And so at some point you have to take the skills that you’ve created and the connections that you made and all of the knowledge that you have out of the realm of a game, right? Or a sport, and into a realm where you can really make a difference.

Scott Nelson:             Got it.

Zvi Mowshowitz:       And in a realm where you can play on a larger stage where you have a chance to work on problems that matter. And so Vassar and I, especially he, came up with the idea for the company himself, and then brought me in as a cofounder, he asked the question, where can people with our types of skill sets—he comes from the Singularity Institute and a rationality-style background, which has a lot of the same problems—where can we really take our skills and make a difference and impact the world? And he said, well, you know, medicine is a place where people can see the value that we can provide and where we can provide a lot of value so that we can get people to agree to give us the equipment, the ability to go out there and do our work.

Scott Nelson:             Yup.

Zvi Mowshowitz:       And then where we can, you know, make a huge impact and save lives and help a lot of people. And so that’s why I’m here.

Scott Nelson:             Okay. Well, I’m going to leave at that, because I think that’s fantastic, the idea that—it sounds cliché, especially in the startup community, that, you know, go after something where you can make a dent in the universe or make a dent in the world, but you guys are certainly doing it with a very unique set of skills and applying it to a space that desperately needs it, at least in my opinion. So thanks a ton for doing this interview. I’m going to leave it at that. Can you hold on the line real quick?

Zvi Mowshowitz:       Absolutely.

Scott Nelson:             Yeah, and for those listening that have made it all the way through, thanks for your listening intention. Remember, you can subscribe to all these podcasts for free. Just go to iTunes or Stitcher Radio or whatever podcast app you have, type in “med tech” or Medsider, and the podcast will come up for free. Download it, and you’ll find that way, with every new episode that’s published, it’ll be downloaded to your smartphone with ease. So, anyway, that’s it for now. Until the next episode of Medsider everyone, take care.

[End of Recording]

 

More About Zvi Mowshowitz

Zvi Mowshowitz Solves Healthcare Information OverloadZvi Mowshowitz is the CEO of MetaMed. He is a world class strategist and gamer, and was a Magic: The Gathering World Champion and member of its Hall of Fame. After retiring from the game, he founded a highly profitable startup that was acquired by Pinnacle Sports, the world’s leading sportsbook for American-facing events, where algorithms and strategies he developed have been responsible for over ten billion dollars in transactions. He holds a degree in mathematics from Columbia University.

Can Medical Device Companies Increase Sales and Reduce Costs at the Same Time?

Medical Device Companies Spend Too Much Money on SalesWhat do Stryker, Biomet, Medtronic, and Boston Scientific all have in common? Yes, they all manufacture medical devices. But more specifically, all four of these medtech companies have implantable device divisions. And from 2005 – 2011, the implantable device segment has been the most consistent top performer relative to other categories including: in vitro diagnostics, medical consumables, medical equipment, and diversified life sciences.

But the times are quickly changing. Why? Well, the implantable devices segment has the highest SG&A expenses in comparison to the other previously mentioned categories. In fact, it’s estimated that orthopedic medical device companies spend $35B per year on sales support. Perhaps “bloated” is the best word to describe this situation?

But it’s not just the implantable devices segment that may be in a for a rude awakening. Many medtech companies spend anywhere from 200-500% more on SG&A versus comparable high tech firms. And as gross margins for medical devices continue to be squeezed, all medtech companies (regardless of the specific product segment) will need to reevaluate their SG&A spend.

One tool that may help in this process is MedPassage. In this interview with Gavin Fabian, cofounder and CEO, we learn how MedPassage is trying to build a more efficient medtech market through e-commerce and collaboration technologies.

Interview Highlights with Gavin Fabian

  • What is MedPassage and how does the platform work?
  • How the idea for MedPassage was born.
  • Can MedPassage be considered the “anti-GPO”?
  • How MedPassage is overcoming the “chicken and egg” problem as they build out their network.
  • How have hospitals, surgery centers, and other healthcare providers responded to MedPassage?  And what has the response been like from medical device companies?
  • What types of medical products are moved through the MedPassage platform?
  • What cost savings do healthcare providers experience through the network?
  • How MedPassage reduces price exposure issues for medical device companies.
  • How do medical device companies transition to the MedPassage platform?
  • Can medical device companies charge for service and support through MedPassage?
  • How is MedPassage different than services like Wright Medical Direct and Novation Aptitude?
  • And much more…

This Is What You Can Do Next

1) You can listen to the interview with Gavin Fabian right now:

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2) You can also download the mp3 file of the interview by clicking here.

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3) Read the following transcripts from my interview with Gavin Fabian.

Read the Interview with Gavin Fabian

I hate to have these interviews interrupted.  So before we dig in, listen to these quick messages:

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Okay, for you ambitious doers…here’s your program…

Scott Nelson:    Hello, hello, everyone.  It’s Scott Nelson, and welcome to another edition of Medsider, the place where you can learn from proven and experienced med tech and medical device thought leaders. And on today’s program, we’ve got Gavin Fabian, who is the Cofounder and Chief Executive Officer of MedPassage. He cofounded MedPassage with the vision of creating a smarter med tech market where device companies and medical centers could collaborate and exchange products more efficiently than ever before. Gavin graduated from Princeton University in 2007, and he has held various product management positions at NuVasive and SpineWorks prior to cofounding MedPassage. So without further ado, welcome to the program, Gavin.

Gavin Fabian:   Yeah, thank you, Scott. Appreciate it. Thanks for having me.

Scott Nelson:    Absolutely. 00:00:47 So let’s first start out with what MedPassage is, if you can provide a little bit of a overview there, and what you’re trying to do, and then we’ll dig in to how this idea was born, and then as well as some further detailed questions in regard to what your experience has been as you’ve launched this platform. So let’s start there.

Gavin Fabian:   Sure. Sure. You know, the concept was really to create a more efficient way to market and sell medical technology. So we were looking at the market and seeing more and more pricing pressure coming down from the hospitals, and we felt that for device companies to maintain margins and be successful with moving forward, they’re going to have to figure out more efficient ways to sell the product. And currently, just to market it and sell a product, you’re looking at salaries for salespeople, and then commission rates on top of that. If you can’t afford salespeople with 30 to 50 percentage points to get the product out—and we’re in a price-conscious market, increasingly price-conscious. You have to be able to commercialize your product more efficiently to be able to meet those pricing needs. So that’s really where the concept came out of, was just, hey, let’s get a product out using ecommerce and networking technology that allows these device companies to communicate the value proposition of their products and transact business at lower costs.

Scott Nelson:    Got you. Okay. So that’s the thesis. 00:02:14 Now, give us a brief overview of the what the platform actually is, without going into too much detail, because we’ll circle back around and dig into it, but give us a little bit of an overview of what this kind of looks like from a layman’s perspective.

Gavin Fabian:   Yeah. Sure. Layman’s perspective – it’s Amazon for implants. That’s really it. And it’s custom-built Amazon to process medical device transactions.

Scott Nelson:    Got it.

Gavin Fabian:   So if you look at a lot of these implants that are ordered, it’s not like you’re ordering one implant. Oftentimes, you’re ordering 50 implants, and you’re not sure which one you’re going to put in until you’ve actually cut the patient open. So you have trays, and some of the trays are on loaner, some of them are consigned. And so there are a lot of nuances to an implant deal, and so we’ve customized Amazon to meet the needs of implant transactions. And that’s really it. It’s Amazon for implants.

Scott Nelson:    Got it. So you’re looking at what Amazon is doing for consumers and how consumers interact with that platform and buy products or purchase products, etc., and you’re basically trying to adapt that same sort of concept to medical device transactions.

Gavin Fabian:   Yeah, I mean, you’ve seen it happen in a ton of industries over the years. So you have brokers years ago used to make 79 dollars a transaction. Now you go on E*TRADE and it’s 7 dollars a transaction. You used to have to go to a car lot to get a car and get sold on a nontransparent price, and now you can go to CarMax and there’s no price negotiation, the car is right there, and it’s simple. So we’re really just trying to repurpose technology that’s done wonders in other industries and just apply it to medical.

But, you know, medical is probably the most complex market of those, so we’ve really tried to make sure that we are aware of the nuances of applying this technology to the medical space. So we have physicians and nurses and OR staff that are guiding the software construction so that what we actually have meets their needs.

Scott Nelson:    Okay. Okay. So that’s a great overview, and like I just said, we’ll dig in to more specific and detailed questions in a little bit, but I’d like to first understand how the idea for this platform was born. And I mentioned sort of in the intro that you spent some at, I think, MicroVention, which is a Terumo subsidiary. You spent some time at NuVasive, which is a spine device company, for those who aren’t familiar with NuVasive.

Gavin Fabian:   Mm-hmm.

Scott Nelson:    00:04:59 Talk to me a little bit about how this idea came to be and what it looked like while you were sort of trying to put it together while at…and I’m not sure if you were still at SpineWorks at the time, but let’s start there.

Gavin Fabian:   Yeah, sure. You know, I was at NuVasive when I really started to understand the device industry, and NuVasive has resources that when I went to a smaller company I realized they didn’t have. And so NuVasive could spend quite a bit of money marketing their products, getting the biggest trade show booths at the shows…

Scott Nelson:    Mm-hmm.

Gavin Fabian:   You know, huge travel budgets, and they could hire the best salespeople in the industry and probably the entire country. And they did that and were able to get their products to market quickly. Not cost-efficiently, but quickly. And at a smaller device company, that’s not really an option. And so we felt like, let’s create a platform, level the playing field, and let the physicians decide what’s valuable to them. Is it valuable for them to do business with a [00:06:11] branded company? Then, they’ll pay a little extra for it. But if they just want a quality, FDA-approved lower-priced generic, then they can choose that.

And so we really wanted to just level the playing field and allow the physicians to make purchasing decisions based on their own value equation. And in the market right now, prices are transparent, and most medical centers don’t know about a lot of these smaller companies. So our platform really levels the playing field so that everyone has a chance to compete.

And what we’ve found is that when we put out our site, as much as it was designed for the device companies, the buyers love it because they get a one-stop shop for implants, it’s simple, it’s price-transparent, they don’t have to do a ton of contract work/negotiations. It’s really as simple as Amazon. If they like a product, they buy it. If they don’t want to buy anything, they’re not forced into buying anything.

So that was really the concept. We had experience working with big and small device companies, and just both Mike and I, my cofounder, felt that as a team we could build a more efficient way to get these products out. So Mike [00:07:29] is a product manager working on developing the product and commercializing it, and then Mike sold it. And so Mike understands the buyer side pretty well, and I understand the device company side, and so [00:07:45] strengths to build this company.

Scott Nelson:    Okay. 00:07:49 And so were you at SpineWorks then when you began to formulate an actual plan for the MedPassage platform?

Gavin Fabian:   No, I actually left SpineWorks and really didn’t start MedPassage for about six to eight months after that…

Scott Nelson:    Okay.

Gavin Fabian:   …and really, during that six to eight months, met with industry folks and people who knew the market and physicians, and made sure that if I was spending my time and risking my savings on this concept that there was actually some meat behind it. And so we developed a prototype for about 10,000 bucks. We went out and we showed this prototype, which wasn’t a working platform but it could demonstrate what we were trying to accomplish, and we showed to some angel investors, some device companies, and they said, “Yeah, this solves a need. We would use it.” And the investors said, “Hey, we’ll put some money into it.” And so that really allowed us to build a team around this concept, once we closed that funding, and then allowed us to commercialize a true working beta, which is what we have now. And we have physicians and device companies doing business on this platform right now and really taking the feedback and refining this thing. But it was a gradual process. It’s kind of  validating the market at each point where we chose to spend more money building the business.

Scott Nelson:    Got it. 00:09:29 And so this was 2012 when you decided to build out like a prototype platform to begin to show to health system buyers as well as medical device companies, physicians, etc., to see whether or not this idea was sticky?

Gavin Fabian:   That’s right.

Scott Nelson:    Okay.

Gavin Fabian:   Yup.

Scott Nelson:    00:09:46 So you felt strong enough about the idea that you then left your gig at SpineWorks to pursue this.

Gavin Fabian:   I actually had some consulting work in between SpineWorks that was not device-related. So, yeah, essentially I left having stable income to do this.

Scott Nelson:    Yeah.

Gavin Fabian:   Yeah. So we, my wife and I, burned through quite a bit of our savings in the process of getting this going, and we were very happy when we were able to get some investment money so that I didn’t have to continue doing that.

Scott Nelson:    Got it. Got it. 00:10:27 I’m not sure if you would consider it an angel round per se, but when did that initial investment money come in, in 2012 as well?

Gavin Fabian:   Yeah, it came in mid to late 2012.

Scott Nelson:    Okay. Okay. Mid to late 2012. I just want to give the audience a little bit of a timeframe as to when you had the original idea, when you and Mike began to formulate a plan and built up the prototype.

Gavin Fabian:   Got you.

Scott Nelson:    No, that’s a great story. So you’re obviously building out a platform of product that has two sides, right? And so you’re going to face the classic chicken and the egg sort of problem where from the buyer’s perspective or the hospital’s perspective, they want to be able to log on and see a wide variety of products so they can potentially purchase, but you’ve also got to go to the device manufacturers and sort of sell them on the idea as well. 00:11:28 So let’s dig in to that and how you’ve approached that chicken and egg problem.

Gavin Fabian:   Yeah, absolutely. That was a big concern of ours when we got going, and what was found most effective was just totally reducing the barriers [00:11:47] for both the buyers and the sellers. So, on the buyer’s side, we don’t charge service centers anything. Service centers and hospitals actually started to refer to us as the anti-GPO because we have no compliance requirements, no long-term contracts, and they don’t have to pay us anything ever. And so the service centers and hospitals love the idea that they can buy in that type of environment with transparent prices.

                           And then, on the device company side, we basically said, “We’re not [00:12:23] having you pay till you get paid. We’re confident enough that we can create an effective market where your products will sell, and if we don’t generate sales for you, then we don’t get paid.” And so [00:12:35] we created a situation or tried to create a situation where there’s a no-lose environment where we’re just out there to prove that, hey, we’re going to do it, we say we’re going to do it, and until we do that we’re not going to charge you anything.

Scott Nelson:    Got it. I love the fact that you brought up the anti-GPO, because from a device sales perspective, and I can speak to this directly, and so can you because you’ve seen it firsthand, a lot of the times when I’m negotiating with a particular hospital or health system, I almost prefer to work off the GPO because I can offer better pricing. And so I love the fact that you brought up the anti-GPO, because sometimes I wonder like, what is the real value that hospitals have with GPOs like Premier and Novation and HPG, especially the GPOs that really don’t drive compliance. It’s sometimes made for interesting conversation.

Gavin Fabian:   Yeah.

Scott Nelson:    So you try to reduce as much as friction as possible. 00:13:29 So let’s talk about how surgery centers and hospitals have responded to this platform, and then as a followup I’d like to ask you what’s the response been from medical device companies.

Gavin Fabian:   Yeah, absolutely. So the first question would be how are the device companies responding or how are the buyers responding?

Scott Nelson:    Let’s start with the buyers because, I mean, it’s a nice segue talking about sort of the network effect, the chicken and the egg problem. You’ve had to obviously go to both the buyers, the hospitals, surgery centers, and the product side, the medical device manufacturers.

Gavin Fabian:   Yeah.

Scott Nelson:    You mentioned that you’ve tried to make it very easy for surgery centers and hospitals, reduce as much friction as possible. So I presume the response has been good. 00:14:18 Have there been any issues that have come up? And what challenges have you had to overcome in respect to getting hospitals and surgery centers on board?

Gavin Fabian:   Yeah, you know, we haven’t gotten many nos. We’ve gotten, “Hey, we’ve got a lot of things on our plate but we’d like to continue discussions, but we’re not ready to sign up at this point.”

Scott Nelson:    Mm-hmm.

Gavin Fabian:   And a lot of that is because hospitals are focusing on EMR implementation for the meaningful use requirements, and they’ve just got enough on their plate right now. But as that requirement gets fulfilled by the end of 2013, we can talk to those hospitals and [00:15:03] start supporting.

What we’ve really targeted is the surgery center market. The surgery centers, 90% of them out there are physician-owned or have physician ownership, and our model really works when there’s physician alignment with [00:15:19] cost savings. A lot of doctors and hospitals, they have no idea what the products cost, and there’s really no incentive for them to get a more cost-effective product. And so there will eventually be incentives for doctors in hospitals and you’ll see more and more of that, but the surgery center market’s right for this right now, and we’ve had a lot of traction.

I mean, like take Medicare patients, for example. A lot of Medicare patients are declined at surgery centers because the costs of the implants make it a net loss to do that surgery, because the Medicare payment is just a lump sum payment versus [00:16:00] reimbursement from a private payer. So if the guy can do a knee replacement and the Medicare payment is 10,000 dollars, if that doctor spends over 10,000 dollars on that surgery, it’s taken out of his pocket.

And so this platform…and most products in our platform are selling at 40 to 60% off of standard industry selling prices—not list prices but selling prices—and these doctors look at this and they’re like, “Man, I can take these patients. I don’t need to dive in anymore. I can take these patients for a rotator cuff repair and I can use five anchors, and I’m not going to be in the red.”

Scott Nelson:    Mm-hmm.

Gavin Fabian:   So a lot of surgery centers we’re working with are adopting this and right out of the gate using it for their Medicare patients.

Scott Nelson:    Got it.

Gavin Fabian:   And so that’s been kind of the reception. I think that the hospitals are interested, but we don’t have the sales force power to really go after hospitals. It’s going to be a much longer sale cycle and there’s going to be a lot more bureaucracy, and there’s less alignment with the physician’s and the management’s goals.

Scott Nelson:    Right. Those are some really fantastic points and really too that stand out to me, and they’re fairly similar really in that you mentioned the idea that healthcare is moving more towards metrics around price and how efficacious these devices are in terms of cost and reducing the cost of healthcare, and it almost seems like a platform like this would almost help push that forward. And a lot of it has to do with the fact that because you’re targeting surgery centers and there’s more natural alignment because physicians typically have ownership, they recognize the cost savings that a platform like this would provide, versus in the hospital setting, most physicians are, like you said earlier, completely unaware of how much… They may be aware of the effort to reduce costs, but they have no idea how much one implant costs versus another. They may have a general idea, but there’s absolutely no transparency.

Gavin Fabian:   Yeah.

Scott Nelson:    So those are some fantastic points though, and something I didn’t realize in doing the research for this interview until you brought that up. But those are great points.

Gavin Fabian:   Mm-hmm.

Scott Nelson:    Huh.

Gavin Fabian:   Yeah, I agree with what you said.

Scott Nelson:    So the response overwhelmingly on the buyer side, I guess, on kind of the healthcare provider side, has been positive other than maybe the on-boarding time might be a little bit long because of other items on their plate, I guess, for lack of a better description.

Gavin Fabian:   Mm-hmm.

Scott Nelson:    00:18:44 But talk to me now a little bit about the response on the medical device side and what that’s been like as you’ve approached medical device companies about the MedPassage platform.

Gavin Fabian:   Sure. Well, I guess I’d start with it’s been positive. So, device companies, most of them see the surgery center market as a difficult market to address, and so our platform has a captive audience, surgery center buyers. And so in general there’s a lot of interest, like, “Can you guys help me get to those buyers at lower cost?”

I think that there is concern about having prices that are transparent out there. This is an industry where there’s been not a whole lot of transparency on a lot of fronts, and some people don’t want to be the first to step in and be the one to be transparent. So that’s a challenge, absolutely. I think that this market has to become more transparent.

Scott Nelson:    Mm-hmm.

Gavin Fabian:   So it’s going to happen, and we’re seeing companies do it without us too. I mean, there are tons—I shouldn’t say tons. There are many small companies now that are creating their own website and selling their products totally price-transparent. And those companies, I mean, that’s a no-brainer. They come on our platform very quickly.

                           Another  technology that we’ve built to protect the device companies from… You know, we would go to some small device companies and they’d say, “This is awesome. I have 0.1% of the market, and you can help me address the other 99%. But if I go with a transparent price and I lose that first customer I have because I’m selling on MedPassage for a thousand bucks but I charge that customer I have 5000 bucks and they may see that price, then the revenue I have coming in and the profit that’s paying the bills goes away. So how can I protect the business that I have [00:20:53] high margins?”

Scott Nelson:    Mm-hmm.

Gavin Fabian:   And so basically what we’ve done is we’ve created technology that we call exposure controls, and your exposure controls allow device companies to go in and pick and choose buyers with their own network that they want to do business with, and by default, all the buyers are blocked. So someone comes in and creates an account to sell their product, no one can see their products, and they’ll go into these exposure controls and pick the ones that they want to sell to and not sell to.

                           So let’s say they have great pricing in California and they don’t want to lose that, and they have a great distributor in California, well, they can just never turn California on but turn on the Midwest and the Northeast, and they can get as granular as the actual center. So that’s really something that is… It sounds like a small technology, but those exposure controls have opened up a ton of doors for us because it truly creates a no-lose situation, because all we’re doing is we’re saying, “Hey, we don’t want to interfere with existing business. If you have great distributors in certain areas, use them, totally fine. But if there’s any part of the market you don’t have coverage of, we can do that for you,” and all the revenue at that point is just incremental.

Scott Nelson:    Yeah.

Gavin Fabian:   So you have to offer a lower price, you know, if the screw cost you 50 bucks to make and you could sell it for 200 instead of 400, I mean, it’s revenue, and it’s not revenue you were getting before. And so that’s really been what’s opened up the eyes of some of these device companies and got them interested, the idea for incremental revenue gains with very little risk…

Scott Nelson:    Got it.

Gavin Fabian:   …with interfering with the existing business. So that’s kind of a broad picture of what we’ve experienced with the device companies, and…

Scott Nelson:    00:22:43 And that component of your system, the price exposure component, was that something that you had built in when you initially launched or is that something that you built in after the fact…

Gavin Fabian:   After.

Scott Nelson:    Yeah, due to responses that you were getting from medical device companies. 00:22:59 So you sort of had to, not necessarily iterate per se, but add that as a core feature because of the feedback that you were receiving?

Gavin Fabian:   Yeah. Yup, exactly. So a core tenet of our business is that if you’re going to sell a product on our site, every buyer deserves the right to the same price, and we get buyers because they love that. So we can’t compromise on that, but what we did say is, “Look, if you don’t want to expose your product on MedPassage to this buyer, you don’t have to. But if you are going to have a sale with one of our buyers, it’s always going to be at a price that’s available to all our buyers.”

Scott Nelson:    Okay.

Gavin Fabian:   But yes, we were getting certain device companies who were like, “Look, the risk of being transparent is [00:23:43] me losing margins on some of my high-paying customers.” And so we came back to that after we built the technology, and they said, “Okay, I’m ready to go,” because now that’s not a concern and the technology literally cuts off that concern, because now they don’t even need to expose themselves.

Scott Nelson:    Got it.

Gavin Fabian:   To those buyers.

Scott Nelson:    Got it.

Gavin Fabian:   Does that make sense, the problem and the solution?

Scott Nelson:    Yeah, absolutely makes a ton of sense, and it’s a brilliant sort of feature to your platform because I have to think most device companies are concerned not only with price exposure, but if they have—and you mentioned this earlier, you kind of called this point out—if they have an existing rep or distributor in place in a certain geography and business is doing well there, why try to fix what’s not broken…

Gavin Fabian:   Exactly. Exactly.

Scott Nelson:    …sort of an idea. So, no, that’s a great… It would seem like there’s not a lot of holes in that particular feature set, for device companies anyway. 00:24:43 But how do you respond to the buyer, or what’s your response been to the idea that if I’m the medical device company and MedPassage, or one of your core tenets is that my price has to be the same to all buyers, well, what if a buyer in rural Midwest doesn’t do as much volume as a center in Metro Chicago or something along those lines? Pick your city, I guess, of choice. How do you respond to that, the different volumes that different centers do and the fact that maybe some surgery centers deserve lower pricing based on their volume?

Gavin Fabian:   Yeah, so currently the thought process here is that, let’s say you get a membership to Costco, right? You pay 50 bucks, you get your card… You’re familiar with Costco, right, Scott?

Scott Nelson:    Right. Mm-hmm.

Gavin Fabian:   Okay. So you get a card at Costco. And you go into Costco, well—I have a Costco card, and I don’t buy a ton of grocery. You know, it’s just my wife and I.

Scott Nelson:    Yeah.

Gavin Fabian:   But when I go to Costco, I’m in there with restaurant owners who are buying loads and loads of food, and I’m getting the same price as those guys. But the interesting thing is, the prices are so good and the buying environment is so refreshing that those restaurant owners are still in there buying the product. It’s just easy, it’s great prices, the quality, the service. And so that’s really the model on our platform. It’s, “Look, let’s not complicate things. We’re already giving you a 60% discount.” I mean, the prices are so low at this point that it’s like we could create an option where you could offer a 5% additional discount, but what we’ve found is that even the large hospitals and the surgery centers are all happy with the prices, and that hasn’t been an issue.

                           Now, if we add or develop something like that where there are volume-based discounts, it would just be along the same lines where you have to be transparent about your volume-based discounts. So if you’re going to make a volume-based discount applicable to Dr. Joe in New York, you have to make it available to Dr. John in Kansas.

Scott Nelson:    Got you.

Gavin Fabian:   But to date it really hasn’t been an issue. The prices are really good and people have been pretty happy with it.

Scott Nelson:    Gotcha. And in regard to pricing, you mentioned earlier that a lot of times you’re able to reduce pricing anywhere from 40 to 60% not off list pricing but off the ASP.

Gavin Fabian:   Mm-hmm.

Scott Nelson:    That seems like an enormous reduction. 00:27:34 Is that really legit, those sort of discounts?

Gavin Fabian:   Yes. Yeah, absolutely. I mean, if you look at a cervical cage, for example, average list price with your top four industry players is 2750. The average selling price is 1250 dollars. And buyers are very aware that list price doesn’t mean anything.

Scott Nelson:    Right.

Gavin Fabian:   It’s just a starting point so that the device company can market a big discount. And so at 1250 being the average selling price, our prices on our platform are between 500 and 900 dollars, on our platform. So the 500-dollar brand is going to be a smaller company, and then the 900-dollar brand tends to be a more named brand that the doctors are familiar.

Scott Nelson:    Okay.

Gavin Fabian:   And then there are options in between.

Scott Nelson:    Okay.

Gavin Fabian:   And that trend is pretty applicable throughout our various product categories in spine and ortho and disposables.

Scott Nelson:    Okay. Wow, that’s a significant discount, and as a salesperson, that tells me that I either need to bring a lot more value to my customers or I don’t know if there’s an alternative if you want to maintain those margins.

Gavin Fabian:   Yeah, you know what? We actually had been approached by distributors and have accounts for distributors. So distributors, you know, we’re just responding to a market need. We’re not driving prices down.

Scott Nelson:    Mm-hmm.

Gavin Fabian:   We’re just responding to what the market wants. I mean, the market has had pricing pressure long before we came into the business, and distributors out there have been watching this happen. And if they’re used to get 2000 dollars for that implant, now they’re getting 800, all of a sudden that two, three hours you’re spending in the operating room is not a very good use of their time. If you’re making 80 bucks to stand in an OR for three, four hours, distributors are looking for ways to automate that.

Scott Nelson:    Okay.

Gavin Fabian:   Distributors [00:29:54] have a price test and they said, “Look, can I put my product lines in your platform?” And for distributors when I don’t need to be in the OR, I can train my physician staff how to [00:30:03] order through this and replenish their sets and do these types of things, and that way I can spend more of my time hunting than sitting in the OR for four hours making 80 bucks.

Scott Nelson:    Right.

Gavin Fabian:   Now I can just automate that and I can go out and get new business. I think that’s really… That was an unexpected market for us distributors.

Scott Nelson:    Yeah.

Gavin Fabian:   But…yeah.

Scott Nelson:    I can see how that would be the case because that’s surprising to hear that, but after your explanation, it does make a ton of sense, and if you’ve ever been in the shoes of a salesperson, I mean, a lot of times you almost feel like you have to be in those procedures, and you’re not necessarily delivering a lot of value. And maybe the physician is probably thinking the same thing, it’s just sort of you’re there out of routine, where…

Gavin Fabian:   Yeah, it’s a courtesy. Yeah.

Scott Nelson:    Yeah, yeah. You know, from the physician’s perspective, they maybe could very well do this case all on their own, and they would like the idea that they can save some money, especially if there’s natural alignment through some sort of ownership. And from the rep’s standpoint, you’re thinking, “Well, yeah, I don’t think necessarily need to be here. I’d rather be out trying to find new business or convert new business.” So that makes a ton of sense.

                           Let’s segue into products. 00:31:19 And I presume that you started off in the spine market just because that’s what your familiar with, but can you give me a little bit of an overview of what products are being purchased through the MedPassage platform?

Gavin Fabian:   Sure. Yeah. So we have a variety of spine and orthopedic [00:31:43] disposable products. We also have some soft goods with braces, although that’s not really a big focus of ours, but we do have soft goods there, and we’re just starting to get into the vascular market.

Scott Nelson:    Okay.

Gavin Fabian:   So, coils and stents and catheters. But if you look at spine, you know, we have your cervical cages, cervical plates, biologics, pedicle screws, a lot of interbody cages. We basically have everything except for the [00:32:16] very service, technical-intensive products, so we would advise a device company to not put a motion preservation device on our platform at this point, or a procedure that is very new.

Scott Nelson:    Mm-hmm.

Gavin Fabian:   Because our platform is really built to automate the sales and transactional process of what we call routine surgeries. So we will not have like dynamic stabilization, and all the investigational stuff, we won’t have those products on our platform.

Scott Nelson:    Got it.

Gavin Fabian:   And that same trend applies in orthopedics. We’ll have all the platings of distal radius plates, small and large frag sets, shoulder anchors, ACL grafts, tendons, but anything that’s very technically intensive we do not provide on our platform.

Scott Nelson:    Okay. Okay. So really, it’s either commoditized products or products that are sort of on the downward slope of the bell curve, basically.

Gavin Fabian:   You know, I actually wouldn’t say that. You know, we just say the products where the technique is stable.

Scott Nelson:    Okay. That’s a good way to put it.

Gavin Fabian:   So let’s take for example like [00:33:38], right? Like if you go to [00:33:41], you’ll see 400-dollar drivers, and then you’ll see like the 50-dollar drivers, and they look very similar and you swing them the same way, but the 400-dollar driver’s a lot better. It has better alloys. It has more research behind it. The [00:33:56] shaft’s better. But at the end of the day, the technique is stable.

So what we say is… We don’t want to insult the device companies, because we think we have great products on our site, and some of them are totally cutting edge, but the technique is stable. So when I say we won’t have investigational products on our site, I’m primarily focusing on ones that have techniques where a sales rep absolutely has to be there to walk the doctors through that case. I mean, if you think about like [00:34:27] I used to be a product manager for NuVasive, like that would not be something you’d want to put on this platform. You really need a lot of support, and that’s just not a market that we are addressing with this.

Scott Nelson:    Got it.

Gavin Fabian:   It’s primarily routine surgery.

Scott Nelson:    Got it. And speaking of support for cases, I think I read this in a previous piece in doing some research for this interview that you mentioned that device companies have the option of using service and support as a line item charge for that particular order.

Gavin Fabian:   Mm-hmm.

Scott Nelson:    So as an example, if someone’s ordering, and my wheelhouse is more the vascular space, so I’m a little bit unfamiliar with spine, but if someone is ordering some spine products for a particular case and they actually want to have the rep come for support, that particular physician prefers that, that rep support, that device company can add that in as a sort of a line item charge. 00:35:27 Am I understanding that correct?

Gavin Fabian:   That’s correct, and the device company can dictate the charge of that. So let’s say if that support is 1500 dollars, then they can list that line item at 1500, [00:35:40] if it’s 500, it’s 500, and then the buyer can choose if they want that service or not.

Scott Nelson:    Okay. Okay. That makes sense. And then, in regard to the on-boarding process for medical device companies or what it takes for them to kind of get on the platform, in my experience anyway, a lot of large strategics, the Medtronics, the Boston Scientifics, the Covidiens of the world have pretty archaic [00:36:06] back-in systems, so I would guess, right? I would assume that it would be somewhat difficult to sort of create almost an API between MedPassage’s platform and that device company. 00:36:19 Am I assuming wrong or can you talk a little bit more about that?

Gavin Fabian:   Yeah, we don’t do the on-boarding process by integrating with other people’s systems.

Scott Nelson:    Okay.

Gavin Fabian:   We literally have a drop box where we have a packet that they need to fill out. So there’s a spreadsheet with all [00:36:42] their part numbers, product descriptions, prices, and then we get all the images, the video files, the marketing literature, FDA documentation, everything we need to create their product advertisements. And we get that in a drop box, and then we take that information and we do all the product uploading, so that the device company is not becoming a specialist in our software.

Scott Nelson:    Okay.

Gavin Fabian:   We make it very simple. So we do all the on-boarding, we create all their advertisements, we set up their account. We even create a private account for them so that they can send their buyers directly to their products, and it’s branded. Like if it were a Medtronic, it’d be Medtronic powered by MedPassage, and it’s just totally their site, even with their own URL. So we really do a lot of work setting them up for success, and we don’t demand much from them. So we set up the account, usually takes about two weeks, and then we allow another two weeks for feedback and for their improvement.

So let’s say I turn an account over to Scott, Scott can go through it, check it out, [00:37:50] can see some issues with it, like the products aren’t marketed right or you’d like something structured differently, we take two weeks and we make sure that we meet your needs, and then you go live, and then you choose which centers in our network you want to start with, and that’s really it. So it’s really a low… We call it white-glove ecommerce.

Scott Nelson:    Okay.

Gavin Fabian:   So it’s not like you’re doing everything yourself. We really hand-hold these device companies through it.

Scott Nelson:    Got it. Okay. That’s a great little tagline, white-glove ecommerce. I like that. And so in terms of a business model, you mentioned that you don’t charge anything to buyers or healthcare providers. 00:38:28 I presume you even take a cut of whatever’s sold through the MedPassage platform?

Gavin Fabian:   Yup.

Scott Nelson:    Okay.

Gavin Fabian:   That’s correct.

Scott Nelson:    00:38:35 And does that vary depending on the particular product or how much margin is built in or what does that look like?

Gavin Fabian:   No…

Scott Nelson:    00:38:41 Can you speak to that all, I guess?

Gavin Fabian:   Yeah. So we apply the same rules that we demand the sellers. You know, we ask the sellers to give transparency on their prices to the buyers, and we do the same thing with them. So our commission rate is 10%. We charge 10% if it’s a buyer that we’ve brought into the platform. And if it’s existing business without selling that they want to run through MedPassage because they see some efficiency in it, it’s 1 to 3% based on transactional volume.

Scott Nelson:    00:39:15 Okay, so explain that a little bit for them. It’s easy to think of the 10%, but you said for add-on business? Can you give an example maybe or explain that?

Gavin Fabian:   What happened is we started working with device companies that were selling to some of our buyers, and they’re like, “Man, this system is awesome. I love the way that I can market my products through this. The way the transactions flow, it’s really smooth, the value add to my customers. Can I bring some of my own customers here?” you know?

Scott Nelson:    Oh, okay.

Gavin Fabian:   And we’re like, “Well, sure. That’s no problem.” And they were like, “Well, I’m uncomfortable paying 10% though because you’re not doing any selling at this point. You’re really just offering me the software.

Scott Nelson:    Okay.

Gavin Fabian:   So we said, “You’re right. So what would be a rate that would make sense?” And what we have really determined is that 1 to 3% for that type of business makes sense, and it drops from 3 to 1 at the volume increases.

Scott Nelson:    Okay. Okay. Yeah. No, that helps me understand a lot better. Okay. 00:40:20 And then, as we towards a conclusion because we’re approaching, I don’t know, what is it, 45 minutes maybe, like 40, 45 minutes, something like that,  it’s been a very interesting conversation, but what is your take on what I would perceive as competitors to the MedPassage platform? For example, Wright Medical, even though I think I just read that they sold their hip and knee business, but I’ve recently read a piece about Wright Medical going direct to consumers, through, I think they were referring to as Wright Medical Direct; the Novation Aptitude platform, which I don’t know a lot of details other than Novation the GPO’s kind of come out with some sort of platform that would maybe resemble this. Can you speak to a couple of those different avenues? I’d love to get your take on how you view…

Gavin Fabian:   Yeah. Well, first of all, the US implant market is 43 billion dollars, so it’s not like one of these competitors you mentioned is going to take all 43 billion dollars, and the way we view it is these [00:41:25] models are validating that the way we look at the market is pretty accurate, that the buyers want more value, cost efficiency, and they’re willing forgo the in-person service for products that don’t require. And so really for us it’s validation that we’re doing the right things, and we just believe that the way we’re doing is a little bit better.

And so the models you mentioned like Wright Medical Direct, I mean, there are a lot of device companies that are going direct and have their websites where they’ll sell direct, and actually we welcome those companies to come into our platform. I mean, there’s no reason these companies can’t have their own website and then also offer the products through ours, and we’ve actually seen that happen where device companies that have their own direct model will also use us. And then your GPOs, I mean, the whole Novation Aptitude launch, my understanding of that from our buyers that we have on our platform that are customers of Novation, essentially tell us that it’s just a more efficient way to run the GPO model, and we’re very different than a GPO.

Scott Nelson:    Right.

Gavin Fabian:   But I think that there’s a lot of focus around delivering cost efficiencies on the implant side, and we view these as validation that we’re doing the right thing. I mean, it’s so early on that I think the more and more physicians and device companies that see models like this coming about, it just helps our cause when we introduce our concept.

Scott Nelson:    Got it. No, that makes sense. Makes a ton of sense. Okay, cool. 00:43:10 Before I ask you this last question, which is more of a personal question, if folks listening to this want to learn more about MedPassage or reach out to you, where would you direct them, before I ask you this last question?

Gavin Fabian:   Yeah, so they can go to our website and sign up, and the signup process is just [00:43:33] an opportunity to connect over conference call, or they could email me directly. I mean, we’re not a huge company. We operate like a startup. So my email is gavin.fabian@medpassage.com. And that’s the fun thing about having a startup, is we are very close to all our customers and we’re very approachable. So I think anyone that want [00:43:59] us would have no problem.

Scott Nelson:    Got it. And for those listening, you can read the transcript, of course, to get that link, but also in the show notes for this particular episode I will link up to MedPassage, of course. But it’s M-E-D-P-A-S-S-A-G-E, MedPassage.com, for those listening. And then my last question, like I said, is more of a personal one. [00:44:24] You went to Princeton, correct, Gavin?

Gavin Fabian:   Yup.

Scott Nelson:    Obviously, had some quality experience at NuVasive, at SpineWorks, etc. You look like you are on a nice little career trajectory within a large device company. 00:44:48 Why did you pursue the entrepreneurial adventure? And then, as a followup question, I guess, what would you say has been the biggest thing that you now know that you wish you knew maybe back in 2011 or 2012 when you were thinking about this idea?

Gavin Fabian:   Yeah, sure. I think you really want to be doing…whatever you’re doing, you want to be passionate about, and I’m really passionate about making healthcare more efficient and helping our healthcare system be the best in the world, and I felt that there was a real lack in our ability to deliver products efficiently. And so I guess I decided to do this just because I saw an opportunity and I wanted to make something better. And I get it, I mean, I like to disrupt…

Scott Nelson:    Mm-hmm.

Gavin Fabian:   …and kind of be a renegade and go after things that I think are real. And so we’ve validated this market, and we were all fired up about it. And I don’t have kids or an expensive lifestyle, so I was able to do this. Now, if this was five years from now, that might be a different story, but I was at a place in my life where I had enough industry experience where I felt like I understood this market and had some ideas on how we can make it better, and I really just enjoy the process of working with a small team to make something better. And we’re all really passionate about what we’re doing.

                           I don’t know if you guys have seen… Scott, have you seen the TED Talks Why video?

Scott Nelson:    Like “ask the question” why?

Gavin Fabian:   Yeah. It’s like, when you’re selling a product or you’re starting a business, what’s more important to your customers is the why than the what. And so we always focus on selling the why, you know, that we want to make healthcare better and deliver high-quality products more efficiently and really focus on the why rather than the what, like rather than, say, “We have an ecommerce platform for medical devices.” Because that’s not that exciting. What’s really exciting is that there are some young guys who are aggressively trying to make something better, and we’re really passionate about our business. And so I think that’s what drive us, is the whole why statement.

                           And then your last question was…

Scott Nelson:    No, go ahead. Is it a series of TEDx Talks? I’ve heard about that one particular. I have yet to watch it, but yeah, it’s another reminder for me to check it out, I guess. 00:47:53 But my other question, and you somewhat answered it already, but is there one thing that sticks out that you know now that you wish you knew maybe two years ago when you were first sort of launching into this endeavor?

Gavin Fabian:   Yeah. In general, I think that there are a lot of great ideas out there, but what really makes a great idea come to life is execution.

Scott Nelson:    Mm-hmm.

Gavin Fabian:   And getting the shuttle off the ground is not simple, and it’s really tough. I mean, you have to make sure that your market actually wants what you have, that they’re willing to pay for it. You have to segment your market so you don’t waste your time selling to the wrong people. You need to make sure you’re capitalized so you can actually execute your plan and have the resources to do it. And then you need a really good team around you. And those are all things that when I got started I didn’t really understand. You know, I just had a concept that people in the industry validated, and I just went after it.

And if I understood those things out of the gate, I probably would’ve been a whole lot more efficient in the way I raised money, the way we brought our customers and targeted customers. You know, it’s only into the last four months when we decided we’re only going to focus on surgery centers. If we had made that decision a year ago, we would’ve probably saved a ton of time and money.

So I think just in general, some of these problems are unavoidable. It’s like a catch-22. You have to do it to learn these things. But there are some great books out there. For anyone that’s getting a startup going, they should read before they try to execute their plan. And one of them is The Art of the Start by Guy Kawasaki, is a phenomenal book. Another book’s Crossing the Chasm, talks about kind of how you flow through your market segments, and then Blue Ocean Strategy is another one. So I [00:49:56] general education. When I got started, I was just a guy that was excited about a concept and [00:50:03] because [00:50:04] just having passion.

Scott Nelson:    Got it. Great, great.

Gavin Fabian:   So, I hope that answers your…

Scott Nelson:    No, no, it does. It does a lot. And back to the point you made earlier about the fact that ideas are sort of a dime a dozen, it’s really about execution. That’s so, so important. It always amazes me how many people want someone to sign an NDA or a nondisclosure agreement, and it’s almost foolish.

Gavin Fabian:   Yeah, exactly.

Scott Nelson:    [Laughs]

Gavin Fabian:   I remember the first time I brought an NDA to a VC, and they just laughed. They’re like, “Come on. I can’t sign that.” And you mentioned competition, and I think you asked the question on a previous conversation we had like, why can’t someone else go out and do it?

Scott Nelson:    Mm-hmm.

Gavin Fabian:   And I would say that the idea of having an Amazon for implants, I mean, although I’d like to take credit for a great idea, I mean, I’m sure hundreds of people had that idea, but it’s all about execution.

Scott Nelson:    Mm-hmm.

Gavin Fabian:   And so what keeps us up late at night is, are we going to execute better than anyone else who wants to be this? And I think that’s really what it takes to get most ideas off the ground. I mean, rarely do you have IP that can’t be [00:51:24]. I mean, I know in the device world we were always looking at IP and then finding just little nifty ways to get around it, basically compete in their space. So it’s just all about execution in my opinion.

Scott Nelson:    Right. Right. No, it’s great stuff. And anyone that was listening or wants some book recommendations while we’re on that topic, I recently just finished a book called Running Lean, I’m not sure if you’ve heard of it, it’s by Ash—I don’t know how to pronounce his last name—Ash Maurya.

Gavin Fabian:   That’s next on my list. I too just got that.

Scott Nelson:    Yeah. It’s a fantastic book. I’m sure everyone’s heard…or most people have heard of the lean startup, but it’s a more tactical approach, sort of more tactics versus theory in terms of kind of the lean startup movement. But that’s a great book. So let’s go ahead… I mean, anything else you want to add before we go and finish this up?

Gavin Fabian:   No, I just appreciate the opportunity to have the conversation with you and be a part of your program.

Scott Nelson:    Yeah.

Gavin Fabian:   I really appreciate.

Scott Nelson:    No, absolutely. Really enjoyed the conversation. I think it was great. And for those listening that have stuck with us for the course of this 45 minutes or so, thanks for your listening attention. Remember, if you’re listening to this audio podcast or this audio episode, you can always subscribe to the Medsider podcast for free. Just do a search on Medsider or Stitcher Radio or Downcast, whatever app you prefer, do a search for “medical device” or Medsider, it’ll come up, and you can subscribe for free. Or jump on the website to subscribe to the email list, and you’ll be notified when a new episode goes live. But anyway, thanks for your listening attention. Until the next episode of Medsider, everyone take care.

[End of Recording]

 

More About Gavin Fabian

Gavin Fabian Reduce Medical Device Costs and Increase SalesGavin Fabian is the Cofounder & Chief Executive Officer of MedPassage. He cofounded MedPassage with the vision of creating a smarter medtech market, where device companies and medical centers could collaborate and exchange products more efficiently than ever before. Gavin graduated from Princeton University in 2007. He held product management positions at NuVasive and SpineWorks prior to forming MedPassage.

Can Nurep Solve the Inefficiency Problem in Medical Device Sales?

Medical Device Sales EfficiencyPicture this. You’re a medical device sales rep covering a procedure in one part of your territory. But unexpectedly, you get a call from a physician needing case support on the other side of your geography. What do you do?

There’s no way you can cover the case, right? The drive-time won’t allow you to get the hospital in time. Perhaps your only option is to provide phone support?

Enter Nurep, a unique mobile platform that allows medical device reps to support physicians in a virtual fashion. Think Skype on steroids. And then apply that thought to the medtech space.

In this interview with Paul Schultz, Cofounder of Nurep, we learn more about their novel platform and how it can foster increased efficiency within the medical device sales channel.

Interview Highlights with Paul Schultz

  • Where did the idea for Nurep come from?
  • The unique way in which Paul and Adam met their first advisor, Dr. Edward Bender.
  • The challenges within the medtech space that Paul and Adam saw when formulating their MVP (minimum viable product).
  • Why did Nurep decide to develop for iOS vs. Android?
  • 4 key features of the Nurep platform: Product Feeds, Call Pulse, Live Video, and Analytics.
  • How have medical device companies responded to Nurep? What has been the response within the healthcare provider community?
  • Features of Nurep that we’re likely to see in the future.
  • Paul’s thoughts on their experience in Blueprint Health.
  • Why did Paul leave behind a solid gig at Cambell Alliance to embark on an entrepreneurial adventure?
  • And much more!

This Is What You Can Do Next

1) You can listen to the interview with Paul Schultz right now:

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2) You can also download the mp3 file of the interview by clicking here.

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3) Read the following transcripts from my interview with Paul Schultz.

Read the Interview with Paul Schultz

Before we dig in, you need to listen to these 2 brief messages.

Meaningful discussion and debate.   Job leads.  Opportunities to network.  Access to specialized groups.  Sound interesting?  Then you should check out the Medical Devices Group on LinkedIn.  It’s the industry’s only spam-free, curated forum for intelligent conversations with medical device thought leaders.  Not only that, but it’s the single largest medical group on all of LinkedIn.  Medical device professionals worldwide are invited to join the Medical Devices Group to help build their personal and corporate brands.  Check it out: http://medicaldevicesgroup.net

As a reminder, Medsider is on iTunes.  Just go to http://medsider.com/itunes and you can subscribe to the podcast for free.  That way, all the new episodes will automatically download to your iTunes account.  It’s super easy.  Also, if you like the podcast, don’t forget to rate it.  That really helps us out.  Again, that’s http://medsider.com/itunes.

Okay, for you ambitious medical device and medtech doers, here’s your program…

Scott Nelson:    Hello, hello everyone.  Welcome to another edition of Medsider. This is your host, Scott Nelson, and on the program today we’ve got Paul Schultz, who is the cofounder of Nurep, which is a mobile platform for medical device companies that allows on-demand virtual device support to physicians in the operating room. So welcome to the call, Paul. Really appreciate you coming on.

Paul Schultz:   Thanks, Scott. It’s a pleasure to be on.

Scott Nelson:    00:00:29 Okay, so let’s first start with what is Nurep, what is this platform that I just mentioned, and then I’d like to dive into how the idea for this platform was born.

Paul Schultz:   Sure. So Nurep is a mobile health technology platform and what it does is bring the live remote medical device rep into the operating room to a physician’s own mobile device for guaranteed 24/7 support. It’s initially on the iPad and it allows medical device reps to support more physicians by supporting them remotely, and it offers physicians guaranteed 24/7 medical device support.

Scott Nelson:    Got it. Got it. 00:01:10 So in layman’s terms it’s like a GoToMeeting for the operating room basically.

Paul Schultz:   Yeah, you could consider that. I mean, there’s definitely a lot of features that differentiate it from consumer-based products, you know, such as GoToMeeting or Skype. It’s a secure and HIPAA-compliant video service and we’re really changing the customer engagement model in the medical device industry, which is currently a one-to-one, and we’re switching that to a one-for-many by allowing physicians to get in contact with the best rep in the US based on location availability and connectivity. And so we’re essentially connecting that physician with the best rep, giving him the comfort and convenience of accessing the entire rep force media-wise.

Scott Nelson:    Got it. Got it. Okay. So that’s a real decent overview and I definitely want to ask you more questions regarding what this platform looks like, but I think the audience will have a good understanding of kind of what we’re dealing with here in Nurep. 00:02:19 So before we get into the specifics of the product, let’s go back to where this idea initially came from, where it was born.

Paul Schultz:   Sure. Yeah, so myself and Adam John, the cofounder, we were both working as management consultants at Campbell Alliance towards the beginning of 2012, and we were working with Genentech. Genentech [00:02:42] is a pharmaceutical company and we were working with them on a mobile strategy project for one of their top oncology products, Avastin, and during that engagement we were helping them define how to sell to an oncologist with an iPad, selling complex oncology products. During this engagement, we felt that a company as innovative as Genentech really wasn’t harnessing the power of mobile technology to address some of the challenges they were facing with regard to interacting with physicians. They were really doing more of the same, converting print material to digital material, and mobile technology, mobile health technology specifically, really wasn’t their core competency. They’re really focused on building the best groundbreaking drugs, and technology wasn’t their focus.

Scott Nelson:    Mm-hmm.

Paul Schultz:   So we really during this engagement felt that there was a need for a company to really improve the interactions between healthcare professionals and the life science representatives they were relying on through mobile technology, and that was how the vision for Nurep was born.

Scott Nelson:    Okay.

Paul Schultz:   So…

Scott Nelson:    Go ahead. Go ahead.

Paul Schultz:   I was just going to say, yeah, we were really focused broadly across the entire life science industry initially, but our physician advisor, Dr. Edward Bender, really honed in on the pain points in the medical device industry and we confirmed that through several initial rounds of market research.

Scott Nelson:    Got it. You just answered my question, is it started out in pharma or kind of the biotech space but you’ve now begun to focus on the device space. You just answered my question.

Paul Schultz:   Okay. Yeah, I know. I mean, Adam John, he carried the bag as a sales rep at Johnson & Johnson and at Merck, and so he actually felt the pain as a rep. And our physician advisor, who is extremely [00:04:35] with the current support model, really proactively came to us and expressed [00:04:35] the pains that he was feeling as well.

Scott Nelson:    Got it. Got it. Now, that’s interesting. 00:04:46 And the physician advisor, you said Dr. Bender, he’s a cardiac surgeon, correct?

Paul Schultz:   Correct. He’s a 35-year cardiac-thoracic surgeon, Chief of Cardiology at St. Francis Medical Center. The interesting thing about him is he actually codes on his own, so he has developed 25 iOS applications specifically for cardiac surgery on his own. So he’s kind of known to do surgeries by day and code by night.

Scott Nelson:    Got it. Yeah, that’s fascinating. I had no idea. 00:05:20 And so I guess let me ask you first, how did you connect with Dr. Bender then?

Paul Schultz:   So he’s an innovator, he’s an early adopter of technology, and I was looking for the latest thing. We had a landing page, kind of a launch page on our site online when we first started out, and he reached out to us, he was one of the first people to ever contact us actually, saying that he was really excited about our vision. And so he actually—he lives south of State, West Missouri, and he went to the Worldwide Development Conference by Apple, the big Apple conference in San Francisco, and that’s where we met. So we actually met at this conference and we had a conversation around our vision and a lot of excitement around the possibilities and opportunities in the medical device space.

Scott Nelson:    Oh wow, that’s fascinating. 00:06:09 So how did he come to find out about your landing page?

Paul Schultz:   That’s a good question. I guess through just natural search. I would have to ask him that. I’m not quite sure specifically, but he somehow was able to find us. [Laughs]

Scott Nelson:    Yeah. No, that’s a fascinating story. I would presume he’s pretty dialed in to like the tech space, especially where it intersects with medicine. So cardiac surgeon in St. Francis, he’s probably got a very keen awareness of what happens in the operating on a daily basis. 00:06:44 I want to go back to where you started in your consulting relationship with, is it Gentech? Am I pronouncing that right?

Paul Schultz:   Genentech. Yeah, Genentech.

Scott Nelson:    Genentech. One of my friends, Joe Hage, who runs the Medical Devices Group on LinkedIn, he made a comment once I thought was really funny. It’s that the Internet forgot about the medical device space, and in this case you could say technology forgot about the healthcare space in general because it seems like so many companies that are so high-tech in respect to the life sciences, it’s almost like they are clueless when it comes to technology that you and I are both familiar with that allows for more efficiencies in the business model. So that’s an interesting point.

Paul Schultz:   Yeah, and I think that’s why digital health and mobile health are becoming such a booming industry right now because of what you just mentioned, the industry kind of forgetting about the medical device and the healthcare space, and now a lot of problems that haven’t been addressed are now being really looked at with a different eye, with technology being the potential solution for some of those issues.

Scott Nelson:    Yeah. Yeah. Well, that’s interesting. So you connect with Dr. Bender and then you discuss where to maybe start with a minimal viable product. 00:08:08 When you initially began to explore the fit kind of within the device space, you mentioned Adam John, your other cofounder, had carried the bag before, but did it surprise you how much reps are involved in procedures on a daily basis in what kind of goes on inside the operating room or the cath lab or the interventional suite?

Paul Schultz:   Yeah, that was a real eye-opener. I mean, even working as a consultant in the industry for five years, I wasn’t as familiar with the medical device sales space and it was extremely surprising. And doing the research and finding out that a rep is physically present in the operating room for the majority of medical-device-related procedures was really interesting, and every time we have to bring awareness around this as something that’s commonplace, not only in the US but globally, and a lot of people are surprised by that.

Scott Nelson:    Yeah. Yeah, there’s no doubt, and I think you were recently quoted in another piece as kind of the dirty little secret in healthcare is that [laughs] reps are actively involved in these procedures, but to be candid, I think that would surprise the general public a lot if they knew how involved reps were. But on the flipside, in a lot of circumstances reps are absolutely needed because they bring the expertise to that specific case because that’s their little world, that’s their little niche where maybe a physician has to perform a wide variety of surgeries and they don’t get to see all of the complex cases and where certain technologies may fit. 00:09:50 So this will provide us a good transition to the actual product, the Nurep platform, because I want to talk to you about what specific challenges and pains that you and Adam saw in conjunction with Dr. Bender and others specific to the device space, and then where Nurep fits in or where you see it fitting in.

Paul Schultz:   Yeah, definitely. Yeah, so the end-person model is great and physicians respect that, and if that could exist onwards that would be the best approach, but unfortunately there’s a lot of changes in the healthcare environment that are making the in-person model no longer sustainable, specifically the medical device tax, uncertain and declining reimbursement on medical device products and cost pressures in hospitals. All these factors are causing device companies to look for ways to improve efficiency, and in doing so they’re reducing the number of headcount to support physicians out in the field. And so physicians aren’t used to the same level of support today as they once were used to, and this is having an impact particularly in rural areas where physicians are reliant on the physical presence of one rep who typically had a broad geography. And now [00:11:06] their peers are getting [00:11:07] fired and that rep is asked to cover an even broader geography, so they’re struggling to meet the demands of their customers and physicians are being frustrated as a result because they’re either having to delay cases until the rep is physically present in the operating room or even worse proceeding without the rep, so they’re proceeding without the optimal [00:11:31] team present, which can lead to [00:11:33] patient care and [00:11:35] admissions. So a lot of factors that are causing just a general decline in the number of reps available [00:11:44] that’s really impacting physicians’ ability to provide quality patient care.

Scott Nelson:    Great. And I can certainly attest to those things you just mentioned, and they really go hand-in-hand. I’m sure you’ll agree they go hand-in-hand with so many headwinds facing the med tech space.

Paul Schultz:   Right.

Scott Nelson:    And often headwinds are costly and equate to less margin, so the natural inclination is for a lot of device companies to reduce costs, which in a lot of cases has reduced the sales force, the sales and marketing headcount, which then equates to bigger geographies and bigger bags of product. So I think it’s definitely a huge, huge issue, and that’s where personally I think what you’re doing with Nurep is really cool.

Paul Schultz:   Thank you.

Scott Nelson:    So those are some of the big challenges. 00:12:40 And so when you began to kind of create your MVP or your minimum viable product, what did you see as like the primary things that you wanted to address upfront?

Paul Schultz:   Yes, when we first started, we really just kind of laid out all the features that we thought would be useful and there were quite a few features. Initially, we just wanted to get everything out of the bag that we thought would be important for a rep and a physician during a remote case. So when we came up with all the features, we realized that a mobile product really couldn’t support all those features. And through [00:13:23] lean startup methodology we honed in on four key features for our launch platform, and those features are product feeds, which provide all the medical device content to prior to a procedure; a call pulse, which connects the physician with the best available rep in the US using a proprietary algorithm, and we can talk about that; and then live video, so a HIPAA-compliant mobile live video infrastructure; and then the last one is analytics, so being able to record some of the analytics from the case as well as a rating for the physician to rate the quality of support provided.

Scott Nelson:    Got it. Okay. Okay, so those four key features. 00:14:14 And those are the four key features that are built into the product as we’re recording this interview today, correct?

Paul Schultz:   Yeah. They’re going through some iteration right now in terms of user interface as well as kind of adjusting them to meet the needs of our initial customers, but those are the key features for the MVP.

Scott Nelson:    Got it. Got it. I’d like you to break down those four different features in a little bit more detail…

Paul Schultz:   Yes, definitely.

Scott Nelson:    But before we do that, you decided to launch on the iOS system or the Apple system, the Apple network, platform, however you want to describe it. 00:14:52 Why was that the case, and then will you eventually develop for the Android platform?

Paul Schultz:   Yeah, it’s a great question. So we looked at this really carefully before we decided to make a decision to go with Apple, and the latest research from Manhattan Research Group, which came out in March of this year states that 72% of physicians own a tablet for professional purposes and that that trend is increasing, and their primary platform is the iPad or the iPad Mini, if not the iPhone as well. So we made a decision based on that to go with iOS. And we also found that the top 25 medical device manufacturers, all of them have their sales and support staff in the field on iPads.

So it was a pretty obvious decision to go with that as our launch platform, but the challenging decision was to go iOS native or to go HTML5, which is kind of cross-platform. We made the decision to go iOS native because the look and feel and the simplicity is going to benefit the physician. So it’s much more dynamic, much more intuitive and easier to use if we build natively as opposed to building non-natively.

Scott Nelson:    That’s an interesting point. 00:16:17 Why don’t you real briefly explain the differences between that native and HTML5? Because it seems like a lot of applications are moving in the direction of HTML5 for the cross-platform functionality, but expand on that a little bit.

Paul Schultz:   Yeah, I mean different companies are making different decisions, and I think Facebook made the decision to get rid of the HTML5 and go native. So there are a lot of different opinions on that. But in short terms, what iOS native is is you’re building it in the code Objective-C for iOS specifically, so its own language essentially. When you build an HTML5, it’s essentially a website that you can wrap, what they say wrap, you can wrap the application into an Android app, an iPhone app or an a web app.

Scott Nelson:    Okay.

Paul Schultz:   So you can code it once in HTML and wrap it. There are limitations in the user interface and some of the structure, and as a result some people even build hybrid apps between iOS and HTML5.

Scott Nelson:    Hmm. Okay. Interesting. But needless to say, I think you made the correct choice in developing or at least starting out with iOS for sure. I mean, I can’t remember the last time I actually saw a rep that carried a non-iOS tablet.

Paul Schultz:   Great.

Scott Nelson:    In fact, I don’t know if I’ve ever seen a rep carry an Android tablet that was provided by the company, and I guess the same thing applies for physicians too. Only like the geeky tech nerd physicians would maybe try… [Laughs]

Paul Schultz:   [Laughs]

Scott Nelson:    …I mean, I’ve seen maybe have or carry like one of the newer Android tablets. But yeah, interesting nonetheless. 00:18:15 So let’s dig into those four key features, and why don’t you start—we’ll just follow the same order—why don’t you start with the product feeds or the content, and then move on to the call pulse, the live video, and then the analytics?

Paul Schultz:   Yeah, sure. So when the physician and their operating room staff are preparing for a procedure, they can pull out their iPad in the operating room in a sterile low-cost sleeve and open up the Nurep platform, and prior to the procedure they can select the devices that they’re preparing to install or implant or use during that particular case. When they select the devices, product-specific feeds load onto their main dashboard on their device, and these product feeds contain all the content related to that particular device right at their fingertips. So IFUs, product manuals, surgical training techniques, animations, really any digital content that the manufacturer wants to provide to the physician that’s quickly accessible, and they can review multiple products right there.

                           Now, when they need support in the operating room or the cath lab, they can select an on-demand call button, then when they select this they can do one of two things. They can select a specific rep [00:19:43] they have a relationship with, preserving that one-to-one relationship, or they can select the best available rep. And this is really the power of our platform and how we’re changing it to a one-to-many relationship.

Nurep first identifies the location of the physician and then connects them with the best rep in the US based on location, availability and connectivity using our proprietary algorithm. Once they’re connected, the physician instantly obtains live video support in a secure and reliable connection right within the operating room. Once the call is complete and the support has been provided, all the analytics for the case are recorded into a secure database and provided back to the medical device company. The physician can also rate the quality of support provided, and that information is also provided back to the device company. That’s really a high-level overview of how the platform works.

Scott Nelson:    Okay. Okay. I think for the most part each of those features makes a ton of sense, and you probably chose for a reason, right?

Paul Schultz:   That’s right.

Scott Nelson:    Because they’re fairly easy to understand, they address a lot of the major challenges. But in terms of the product feeds and the content, that first feature you mentioned, so that’s basically all of the content that the manufacturer or the medical device company wants to provide the physician specifically for the case support.

Paul Schultz:   Right.

Scott Nelson:    So a video animation of the device, IFUs potentially, product brochures maybe…

Paul Schultz:   Right.

Scott Nelson:    00:21:20 I mean, that’s basically what…

Paul Schultz:   Yeah, we built it robust enough to allow a number of different file formats.

Scott Nelson:    Mm-hmm.

Paul Schultz:   And we’re really building this up to be very robust, so we’re going through an iteration right now to improve the robustness of the product feeds to allow for more content and in different tiered levels of content to align with some of our early customers’ needs.

Scott Nelson:    Got it.

Paul Schultz:   But yeah, essentially, the content management system on the back end, it allows the manufacturer to manage that content in real time for their customers.

Scott Nelson:    Got it. Okay. 00:22:02 And then the call, you referred to that button, you know, if I’m a physician or a tech in the OR, the cath lab or something like that and I actually want to get in contact with the rep, it’s the call pulse button you mentioned, is that what you were referring to…?

Paul Schultz:   Yeah, that’s right.

Scott Nelson:    Okay.

Paul Schultz:   Call button. On-demand call button.

Scott Nelson:    Got it. 00:22:21 And so it’s interesting because I can understand the idea of preserving the one-to-one relationship where you basically directly connect that physician with the rep that they’re typically used to working with, but help me understand how you came up with the concept of finding the best available rep.

Paul Schultz:   Yeah, this really comes back to the issue of device manufacturers reducing their headcount in the field. So when that local rep is too far away because they have a broader geography and they’re having to travel much more and they’re unavailable, this allows the physician to get in contact with one of their peers because the local rep is no longer available to support them. So it’s essentially potentially giving that physician the comfort and convenience of getting the support they need when they need it from the best available representatives, whether it’s their local rep or another rep. And so it’s essentially a support system to kind of piggyback on the local rep and give the physician the support they need.

Scott Nelson:    Okay. 00:23:37 Two followup questions there because I think this is starting to make sense why you built that feature, because correct me if I’m wrong, but in a lot of situations, particularly with a device maybe that’s not often used, that hospital may not know who their existing rep is. Maybe there’s been rep turnover or they don’t even know who that rep is, so that would be the idea behind it.

Paul Schultz:   Mm-hmm.

Scott Nelson:    It would connect him with the best available rep, and that device company on the other side could basically somewhat route that call to whoever is currently covering that territory.

Paul Schultz:   Right. So if the local rep can’t take the call, it continues to pulse out kind of in a sonar-like fashion until the call is connected with a rep. And so it’s really helping out the system. It’s really improving the value of the device manufacturer support to the end user, which is the physician. It’s going back to why physicians are frustrated right now because they’re having to reschedule cases around the availability of their local rep, and that shouldn’t be the case. They should be able to proceed with procedures when they need to have them scheduled, and that’ll increase the throughput, increase the efficiency of the hospital system by allowing them the comfort and convenience of getting support whenever they need it.

Scott Nelson:    Got it. Yeah, makes a ton of sense. 00:25:03 And then also, two other sort of questions around this, kind of one and the same question really, but would it be possible to potentially connect, you know, if I hit that call pulse button, to connect with like an internal, like an inside clinical specialty team in a sense? And then as a followup, would it be possible to connect with maybe a KOL that is on contract, a physician thought leader that’s on contract with that device company, to almost facilitate the conversation there? Do you follow me?

Paul Schultz:   Yeah. No, that’s a great question. We’re investigating both of those right now. So the power of our kind of communication algorithm if you will is that we can triage the request any way that the device manufacturer wants really, whether if it’s the pulse to the local rep and then to the clinical specialist in-house after or if it’s just the rep force out in the field, maybe even a call center if the reps are unavailable. There’s a lot of different use cases that we’re investigating from that angle.

                           Going to the KOL angle, that’s something we’re really looking into right now, sort of a specialist on-call, if you will, feature.

Scott Nelson:    Yeah.

Paul Schultz:   And we anticipate having that rolled out sometime early next year.

Scott Nelson:    Yeah, I can see there being a ton of value around that, about being able to facilitate that sort of conversation, or that sort of engagement anyway.

Paul Schultz:   Yeah. Going back to that physician-to-physician support, there’s a lot of interest in the med tech space for providing that type of solution in emerging markets, and so we’re looking at that as well.

Scott Nelson:    Oh yeah. Yeah, that’s a great point, something that I didn’t even think of before you mentioned it. Yeah, because that typically amounts to [laughs] a physician flying in to Latin America or something like that and doing some training, but then what happens after that, after the initial training, which oftentimes is not enough…

Paul Schultz:   Right.

Scott Nelson:    So, cool. For the sake of time, let’s move on to the other two features, the live video and then the analytics. The live video I think makes a lot of sense other than in an environment like an OR setting for example, maybe not the cath lab setting, but in the OR there’s a lot of fluid involved. It’s not the cleanest environment for gadgets. 00:27:39 What’s your solution around that?

Paul Schultz:   Yeah, so right now we’re kind of building out a prototype. It’s a low-cost sterile plastic sleeve similar to the x-ray [00:27:50] that you would see in an operating room that basically protect the iPad and keep it in a sterile environment while preserving the resolution of the cameras on the iPad. There are also slits on the plastic sleeve that allow it to connect to an IV arm so it gets it out of the way. And then when the rep needs to get a better view of the procedure, one of the OR staff or the OR nurse or the cath lab tech can grab the iPad and maneuver it so the rep can get a better view.

This is our early way to get to market. It’s kind of a low-cost easy solution. We don’t want to get into the hardware business right away, but we’re also looking at prototypes for kind of carbon fiber iPad arms that connect to the bedside and a couple of other potential hardware solutions.

Scott Nelson:    Got it. Okay. Cool. And then lastly, the analytics. 00:28:47 Explain the analytics feature again, because I know you mentioned the ability to provide feedback as well as sort of a built-in rating system as well. So expand on that a little bit.

Paul Schultz:   Yeah, so the analytics are going to be pretty basic at first. We’re just collecting basic data initially, so you know, how long was the case, what rep or reps and what physician were on the call, what location. And then, as you mentioned, the quality. So device manufacturers can provide a couple of metrics that they want to rate their sales and support staff on such as quality of support, customer service, clinical knowledge, etc. And this is an optional rating feature to give the physician the ability to kind of get some real-time feedback on the quality of support.

All this information is really just collected in a secure database and provided back on a quarterly to the device manufacturer. In doing so, we’re hoping that this will improve the quality and then allow manufacturers to really hone in on where the training needs are, where the gaps are in knowledge, etc., something that they don’t get today.

Looking in the future, we want to be able to record these cases actually recording to video and storing those videos, which could help hold a variety of different applications. And so that’s something in the future we want to make sure that we have the [00:30:30] regulatory and kind of we’re in safe harbor essentially to do that, so we’re still working on that.

Scott Nelson:    Got it. Huh, my brain is starting to think about this a little bit more. The wheels are starting to churn, I guess is the better description there. But yeah, there’s a ton of value around being able to provide feedback there. So an in-house training team or even from a management perspective, you can get a better idea of where that particular person who helped out on that case could shore up some of their clinical knowledge and get a better idea of where the focus needs to be from an education standpoint. That’s interesting.

Paul Schultz:   Definitely.

Scott Nelson:    Yeah.

Paul Schultz:   Yeah, it’s definitely not a tracking tool or anything like that. It’s very basic analytics that are recorded in real time and provided back, so it’s really meant to try to improve the model and give device manufacturers some data that they’ve never seen before.

Scott Nelson:    Got it. Got it. Cool. 00:31:33 I want to ask you this question now before we get to your proposed business model and then what the response has been within the industry, but while we’re on the topic of product, what other features do you see building in at some point into the future?

Paul Schultz:   Yeah, so we’re currently looking at different features and prioritizing those for future releases, and it really comes down to some of the specific needs for particular applications in different therapeutic areas. For example, [00:32:08] orthopedics, spine-related procedures, there are a lot of different devices and utensils on many different trays. Typically the device rep comes in with a laser pointer to point out particular items. We want to replicate that in a digital form, allowing the rep to essentially annotate video with their finger in real time on the iPad and then send a screenshot of that to the OR staff so that essentially it replicates the laser pointer in the operating room. That’s one feature we’re really excited about.

                           And then, another feature is really just to be able to share content in real time with the OR staff, so whether it’s the rep showing them a visual of the device and explaining how to implant it to a number of other applications. That’s another really important feature as well.

Scott Nelson:    [00:33:04] Almost like taking what we now consider like an in-service but making that virtual as well.

Paul Schultz:   Yeah.

Scott Nelson:    Yeah.

Paul Schultz:   Yeah, you could essentially use our platform for that. That’s not the major use case but it can definitely be used for that type of in-servicing.

Scott Nelson:    Got it. Cool. And sort of that overlay feature, that would be similar to what we see in an NFL football game where one of the commentators basically in essence draws on the screen, is how we kind of see it on the other end of the TV.

Paul Schultz:   Right, right. Exactly, because the OR staff doesn’t really necessarily need to see the rep on the other end all the time unless they’re physically trying to show them something, so you can essentially see the rep’s face being replaced with a screenshot that gets flashed over in real time with those visual annotations embedded over the screenshot.

Scott Nelson:    Got it. Yup. Okay, cool. 00:34:07 I know we’re running short on time here, so let’s briefly discuss kind of what your proposed business model is and then kind of what the response has been within kind of the medical device industry from a company perspective as well as from an individual rep perspective, and then we’ll talk about what healthcare providers think about the Nurep platform as well. But let’s start with the business model.

Paul Schultz:   Yeah. Yeah, so right now we’re currently actively investigating the best [00:34:39] market strategy and business model. We’re looking at two different approaches and one is a price per call, so a fee for every time a call is conducted or a case is conducted over Nurep. The other business model is a licensing model, so an annual license for use over the platform. We’re leaning more towards a licensing approach initially so that we can get it out in the market [00:35:07] concepts and really start to hone in on what the ideal pricing structure business model would look like.

                           We’ve received phenomenal response from medical device manufacturers [00:35:19] probably launch the demo mobile. We’re receiving one to two inquiries a day from interested medical device manufacturers and they’re looking at using Nurep for a number of different purposes to address some other challenges. But that’s really where we’re at with that.

One of our biggest challenges right now is figuring out how to go to market with healthcare professionals because it is easy for us, relatively straightforward for us to implement on the medical device side, but we want to make sure that we are very strategic with how we market with the healthcare professional side. So that’s something that we’re working with [00:35:58] so far with our early customers right now.

Scott Nelson:    Got it. [00:36:01] On that note, because this sort of fits under the business model as well as what you just mentioned, going to market within the healthcare provider community, who do you envision, who’s responsible, I guess, for supplying the hospital or the surgery center, wherever the case is going on, with the actual hardware, the iPad in this case? And then who do you envision being responsible for sort of training the healthcare providers, the techs, the nurses, in some cases the physicians?

Paul Schultz:   Yeah, so the first question you asked, we really don’t have a good answer for you on that quite yet. That’s something that we’re still working through. So yeah, we don’t really have a formal position on how we’re going to get mobile devices to the physicians. Either it’s going to be on their own mobile devices or dedicated devices under the [00:36:59] level.

                           Your second question… Sorry, what was your second question?

Scott Nelson:    [00:37:06] Who’s responsible for kind of training the healthcare community in how to use the app?

Paul Schultz:   Yeah, we’re anticipating the app to be as intuitive as possible with some overlay training on how to use it, but we’ve really built this app using Apple [00:37:24] guidelines into consideration to really provide an off-the-shelf instantaneous user experience where physicians can download Nurep and already know how to use it just through intuitive Apple development.

Scott Nelson:    Got it. Got it. And those are, in my opinion anyway, relatively small hurdles because, I mean, like you just mentioned, 70% of the physicians I think based on that Manhattan Research have tablets and the overwhelming majority are Apple tablets.

Paul Schultz:   Right.

Scott Nelson:    iPads or iPad minis.

Paul Schultz:   Yeah.

Scott Nelson:    And then with increased usage I think it’s been my experience that healthcare providers are becoming more and more used to moving around within the iOS or the iPad or the iPad mini.

Paul Schultz:   Right. Yeah, there will be some training on the rep side because we need to make sure that they’re operating within HIPAA-complaint bounds, and there’s going to be best practices on how to use Nurep, where not to use Nurep, etc. So there will be some training in the implementation on the medical device side.

Scott Nelson:    Got it. Got it. Cool. And then you mentioned that the response on the medical device company side has been overwhelmingly positive. 00:38:52 Have you had any actual device reps sort of respond in a negative way, thinking that you’re encroaching on their neighborhood, [laughs] on their [00:39:03]?

Paul Schultz:   Yeah. Yeah. No, we’ve definitely had those. We’ve definitely had those, but those have been not the norm. So the majority of reps we have spoken with have seen this as an opportunity to drive more business and see more physicians and address some of the challenges that they’re facing with respect to the current model. So the reps out in the field that are really trying to drive business are going to see this as an opportunity to increase their compensation and support more of their customers.

Scott Nelson:    Sure. 00:39:40 And then also, have you had any device companies respond in a way that surprised you? Like they weren’t interested or they didn’t see the potential value in something like this?

Paul Schultz:   I actually haven’t seen that specific negative response. We’ve had a lot of interesting use cases that we weren’t anticipating that they’re currently assessing in the field with some of the reps to see if there’s a viable business model around that. For example, just going to a completely repless model in certain areas where they have no reps just to [00:40:16] growth. So they don’t want to increase their headcount but they want to try and increase the growth of their business, so they’re looking at potential ways to sort of use Nurep as an extender, if you will, into areas where they don’t currently have any customers or support.

Scott Nelson:    Oh yeah, I would think that would be a huge win if you could utilize that, utilize a platform like Nurep for those sorts of situations.

Paul Schultz:   Definitely.

Scott Nelson:    Yeah, cool. So as I mentioned—do you still have a few minutes? We’re running kind of longer than I…

Paul Schultz:   Yeah. Yeah. I have a call at 11, but yeah.

Scott Nelson:    Yeah, okay. Cool. So a couple of other questions sort of in conclusion. 00:41:00 Real briefly, can you talk about your experience at Blueprint Health, maybe what stood out? Were there any surprises that you experienced during your time at Blueprint?

Paul Schultz:   Yeah, Blueprint was phenomenal. It was the healthcare accelerator with the largest mentorship community specific in the healthcare industry, and really the best part of that program was being exposed to other likeminded entrepreneurs. We were in a class with 11 other companies, and getting to work with them and face some of the same challenges and learn from each other, that was really the best experience, is really being embedded in the community and working side by side with other entrepreneurs that are trying to address problems in healthcare.

Scott Nelson:    Yeah. 00:41:53 And other than your own company, did you have any favorites that you [00:41:58] saw? [Laughs]

Paul Schultz:   [Laughs] You know, I don’t…I mean all the companies there were…

Scott Nelson:    I’m putting you on the spot, Paul. [Laughs]

Paul Schultz:   Yeah. [Laughs] All the companies were high-caliber to be honest. They do a superb job of selecting companies that have a solid team addressing a real problem and have the opportunity to really build a great solution in a large market. So they’re a great [00:42:27] and hats off to Brad Weinberg and Matt Farkash for really leading the way there.

Scott Nelson:    Yeah. Cool. 00:42:34 And then, real quickly, in regard to your background as well as Adam’s, and you recently brought on another member of your team, Nick—I’m going to mispronounce his last name. How is his last name…?

Paul Schultz:   Damiano.

Scott Nelson:    Damiano you said?

Paul Schultz:   Yeah.

Scott Nelson:    Got it. So you mentioned that you and at least Adam knew each other through your background at Campbell. [00:42:56] So real quickly, you and Adam are early on in what appear to be successful careers. Why did you pull the trigger and go in this direction of starting your own company, and all of the risks that coincide with that you decided to go down this path?

Paul Schultz:   Yeah, I think it really just had to do with a lot of the trends that we were seeing in the industry that pointed to a need for our solution. When we did the investigation, nobody out there was really doing this and it really got us excited that we could create a new marketplace, a marketplace where providers and suppliers are communicating to each other in a remote fashion over secure video. Nobody was doing this. Telemedicine was out there but nobody was taking it to the next level to improve patient care from the medical device space. And that was really what got us excited, and when we visualized the product and the solution, we really felt that this had legs.

                           And Nick, we consider him, you know, he’s a third cofounder. He’s a dedicated member of our team. We met him at a Hackers and Founders Meetup pretty much a couple of months after we incorporated and he was a perfect match for our team. He aligned with our vision and was an expert in medical device engineering. He has a Master’s and Bachelor’s Degree from Stanford in Engineering and was working in a medical device [00:44:39] startup developing complex algorithms for a [00:44:42] pacemaker. So his experience in that really helped us develop our communication algorithm from the proprietary technology that we have today.

Scott Nelson:    Yeah. Cool. Cool. Well let’s end it on that note. Thanks a ton for your willingness to come on and tell us a little bit more about Nurep as well as what the experience has been like thus far.

Paul Schultz:   Yeah, thanks Scott. No, it’s been a pleasure having me on board and it was really great speaking with you as well.

Scott Nelson:    Got it. And I’ll have you hold on the line here in a second, but for those of you listening, thanks for your ear through the entire, what are we on, close to 40, 45 minutes now? I really appreciate your support in listening to this program. And remember, if you’re listening to this online, we do have a podcast. Just go to iTunes or Stitcher Radio or Downcast and just do a search for Medsider or “medical device” and you’ll find the podcasts. You can download it for free, or subscribe for free, I should say. That way, all the interviews will automatically be delivered to your device of choice whenever there’s a new one posted. So, anyway, that’s it for now. Until the next edition of Medsider, everyone. Take care.

[End of Recording]

 

More About Paul Schultz

Paul Schultz Nurep Medical DevicePaul Schultz is the cofounder of Nurep. He has over 5 years of experience supporting life science companies with their product launch strategies. Formerly a manager at Campbell Alliance, Paul holds a MBS from Keck Graduate Institute and a BS in Biotechnology from Washington State University.

Nurep is a mobile platform for medical device companies that allows on-demand virtual device support to physicians in the operating room. For the first time, Nurep allows medical device representatives to support physicians in the operating room remotely, enabling them to see more physicians and guarantee 24/7 support.

Social Media Best Practices for Marketing Medical Devices

Social Media Best Practices Medical Device MarketingDid you know the FDA recently issued a multi-million dollar contract to a private company that will be charged with monitoring social media? Yes, multi-million. Needless to say, that’s a significant amount of money.

Although many would argue the FDA has not been very clear regarding its guidance towards social media, you can’t deny that the FDA is beginning to take social media more serious than it ever has.

In this interview with Dr. Mukesh Kumar, Senior Director of Regulatory Affairs for Amarex Clinical Research, we’ll discuss common issues, misconceptions, and possible solutions in regards to using social media to market and sell FDA-regulated medical devices.

Here’s What You Will Learn

  • Why one particular company received a warning letter from the FDA for clicking the Facebook “Like” button.
  • Trends and recent discussions regarding the FDA’s overview and enforcement of social media as it pertains to marketing medical devices.
  • Risks and benefits: FDA guidance documents regarding the distribution of information via social media.
  • Best practices for managing social media within the medical device space.
  • If a patient submits a question regarding a medical device via Twitter, how is it possible to present balanced information given the 140-character limit?
  • If unidentified patients post comments regarding adverse events on a website not controlled by the medical device company, is that company required to report the event to FDA or attempt to contact the patient?
  • And much more!

This Is What You Can Do Next

1) You can listen to the interview with Dr. Mukesh Kumar right now:

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2) You can also download the mp3 file of the interview by clicking here.

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3) Read the following transcripts from my interview with Dr. Mukesh Kumar. 

Read the Interview

Before we dig in, you need to listen to these 2 brief messages.

Meaningful discussion and debate.   Job leads.  Opportunities to network.  Access to specialized groups.  Sound interesting?  Then you should check out the Medical Devices Group on LinkedIn.  It’s the industry’s only spam-free, curated forum for intelligent conversations with medical device thought leaders.  Not only that, but it’s the single largest medical group on all of LinkedIn.  Medical device professionals worldwide are invited to join the Medical Devices Group to help build their personal and corporate brands.  Check it out: http://medicaldevicesgroup.net

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Okay, for you ambitious medical device and medtech doers, here’s your program…

Scott Nelson:    Hello, hello everyone, welcome to another edition of Medsider. Of course, this is your host Scott Nelson, and for those of you who are new to the program, Medsider is the place where I interview medical device and med tech thought leaders on a wide variety of subjects. And in this particular episode, we’re going to cover all things social media as it pertains to FDA-regulated medical devices. And the guest on the program today is Dr. Mukesh Kumar, who is the Senior Director of Regulatory Affairs and Quality Assurance for Amarex Clinical Research. Dr. Kumar, his key expertise is in global, regulatory and business processes for medical and diagnostic products. He’s a well-known expert in global drug approval processes as well and has been involved in clinical trials in more than 60 countries. And lastly, Dr. Kumar is a PhD in Biochemistry with a specialization in Virology, Gene Therapy and Molecular Biology. Hopefully I got all that in, but welcome to the program, Dr. Kumar, really appreciate you coming on.

Mukesh Kumar:        Thank you, Scott. It’s a pleasure being here.

Scott Nelson:    That was a rather long-winded intro but I needed to make sure I fit in as much as possible in your background because it’s pretty impressive. And I just mentioned, we’re going to talk about all things social media as it pertains to medical devices, medical products, etc. that are regulated by the FDA. But before we dig in specifically, I think you’ve got an interesting story in regard to a device that was recently on Grey’s Anatomy as it pertains to social media, so why don’t you go and explain that story?

Mukesh Kumar:        That is correct. Well, first of all, thanks for having me here, and it’s a pleasure to talk about a topic that comes on and off more often these days regarding the use of social media to market medical products. It’s not just true for medical devices but any kind of product and any kind of marketing for a given product that’s non…more and more people are using social media, and when we think of social media we typically think of Facebook and media like that, Twitter and Facebook. But social media is bigger than that. Social media is anything that is in the public domain, on a website or on a TV or radio program that could be considered as an advertisement or marketing of a given product.

                           You mentioned that interesting story, there was a warning letter issued by FDA to a manufacturer of a medical device in California. And I won’t [00:02:41] the names, it’s public information, but what happened was this company was working on a cardiac medical device and they were conducting clinical trials with it. And their principal investigator knew someone, one of the writers on Grey’s Anatomy, and he plugged the device on one of the episodes of Grey’s Anatomy, in which the actors in the plot of the soap opera, the actors used that device to treat a patient. And the PI acted as a consultant and the PI also had a brief appearance on that episode.

Somehow FDA got to know about it and they company got a warning letter for advertising their product, their investigational product, on a national TV program. It came as a bit of surprise to people like us who follow the industry and follow the FDA’s rulings because this is the first time ever we have seen FDA go after something so vague like that, something where… A TV episode is obviously highly edited and the information on it is really, really very brief about any device, and it’s really hard for patients to recognize a device based on its description on a fictional TV program, but FDA considered that as a risk.

There have been many other episodes, mostly related to Facebook pages and Twitter, where actually FDC just yesterday relieved a new guidance on mobile advertisement, advertisement that appears on telephones and smartphones and so on, which is very interesting to see. But that, I mean, let’s go into the specifics of the process, but it is getting into a lot of areas where regulators traditionally did not go, and they are regulating more and more aggressive about enforcing these new not-yet-described regulations on a case-by-case basis.

Scott Nelson:    Yes. That’s interesting because it would seem that that is a fairly innocent sort of occurrence for a device if you sort of plug or showcase it in Grey’s Anatomy, but it’s clear that the FDA is watching and taking action in this particular circumstance, as you just mentioned, because the manufacturer received a warning letter, which is interesting.

Mukesh Kumar:        Yes, and FDA also actually recently, actually this week FDA gave contract to a private company to monitor social media, to monitor Facebook, Twitter, and all that. FDA actually gave formally a contract, I think about two million dollars per year to an advertising company to basically go out and monitor and Twitter and Facebook and LinkedIn and any other social media, TV, radio, [00:05:41] for seeing incidences of product placement, product advertisement, product promotion. So we could expect a lot more aggressiveness from the agency in the coming times.

Scott Nelson:    Yeah, yeah, no doubt. I have not read about that release in regard to the issuing of that contract, so that’s definitely interesting. So let’s go and dig in. There are clearly risks and benefits to utilizing social media if you’re a medical device manufacturer, so let’s dig in to some of those risks and then contrast those to the obvious benefits of utilizing some of these channels.

Mukesh Kumar:        Sure. So, well, okay, in terms of…let’s look at the intent of regulators. The regulators are very concerned about off-label use of devices, off-label use of any product for that matter, but let’s look at devices because it’s more prone in devices than in other products. What the agency wants to make sure is that manufacturers, first of all, say whatever they want to say about their device in a way that’s non-misleading, and when something is presented in a brief format, when something is presented on Twitter where you have a very short message that needs to go on, and even on a website where the consumer has to scroll or has to sometimes hit multiple links before they get all the information about a given product, it is possible that because humans may not know everything about a device or a product before they decide to use it.

So for that reason, all the regulations, I mean so far there is no written regulation, it is more on a case-by-case basis, there are two guidance documents in the works that the agency has assured will relieve the fear, but they have been still enforcing the advertisement using [00:07:42] regulations for the last at least two, three years. But what they have been asking the manufacturers is to assure that all the disclaimers, all the pros and cons, all the risks and benefits of a given product are adequately informed to a consumer in any form of advertising. And it is very, very hard for manufacturers to do that on something like Twitter or even on Facebook where you have very little control on what’s going to get posted by your users, by your connections. For example, there was one letter given out in September of 2012, I think, sometime last year, where a manufacturer got a warning letter for hitting like on a comment.

Scott Nelson:    A what?

Mukesh Kumar:        So there was a Facebook page for a product and the consumer posted some benefit that they got from using the product. So they posted a comment and the manufacturer hit like on that comment, and FDA gave a warning letter saying that by hitting like the manufacturer was endorsing that off-label use. Now, you can imagine, I mean this is something that could be again that’s extremely [00:08:53] as you know, they found a comment that was very favorable to their product and they hit like on it, and FDA took it as endorsement of that comment, which was off-label use of the device.

                           So, because again, coming back to the intent, the agency is very worried that manufacturers would mislead the consumers because since it was off-label, and by definition off-label means that this is a use that has not been thoroughly reviewed by the agency in terms of its risks and benefits, so they’re worried about manufacturers telling consumers something that they have not vetted, and because of that they are getting extremely aggressive on anything that they feel would do that. And because social media is very new, the agency acknowledges, the agency even uses, I mean, FDA has all kinds of applications of social media. FDA uses Twitter itself to release information. They use Facebook. They have blogs. They have all kinds of ways to talk about their initiative. So they are very aware of the power of social media, and because of that they are also very aware of the potential for misuse of this media and kind of going around the agency, talking about things that they don’t want people to talk unless they have verified it.

So in terms of…FDA has released a couple of guidance documents. One of them was specifically about off-label use, which goes at length about how to address a use that has not been approved by FDA. There are certain advantages to the consumer about these off-label uses. Many medical devices have off-label uses. So FDA does acknowledge, and actually the FDA Commissioner, Dr. Hamburg, actually went to a congressional hearing and very vocally said that the FDA does not want physicians to not be able to use a product off-label if they feel a patient can benefit from it, but they certainly want manufacturers to not use that information for financial gains. So agency has been saying that while they are okay with off-label use as they know off-label uses exist and they know these uses benefit patients, but they do not want those uses to be commercially used by manufacturers.

Scott Nelson:    Okay.

Mukesh Kumar:        So today, what [00:11:12] done right now is if an off-label information is generally known and physicians do it on their own without any active inducement by the manufacturers, then there is no problem with off-label use. Problem happens when manufacturers go out and actively talk about that off-label use without getting the agency’s blessing on it.

Scott Nelson:    Got it.

Mukesh Kumar:        So there are guidance documents that talks at length…it’s a pretty detailed guidance document and it covers all kinds of FDA regulatory products, and it talks about the rules that the manufacturer has to follow when they encounter an off-label use of a product.

Scott Nelson:    Got it.

Mukesh Kumar:        The one that I talked about, the one that was released by FDC on 26th of March just a couple of days ago, that talks about…it’s called a dot-com guidance, and in this guidance the FDC actually is talking about in what [00:12:11] forms…what should be the font size, what should be the [00:12:14], what should be the positioning of text when looked at on mobile devices. So they’re talking of on smartphones, they know lots of people see a lot of information on their smartphones. They read emails. They watch webpages online.

So this whole guidance, this is a 50-page guidance that came out of FDC, this talks about promotion of products and having disclaimer information available. And it is assumed that FDA did play a big role in writing of the guidance, and this FDC guidance, a lot of it is going to deflect in the FDA’s guidance that is expected later this year.

Scott Nelson:    Okay. Okay, so basically there are two different documents or guidance documents to date, but there’s going to be a third guidance document that the FDA will hopefully release later this year in 2013 to…

Mukesh Kumar:        That’s right.

Scott Nelson:    …to shed more light on this topic?

Mukesh Kumar:        Yeah, there are two guidance documents that are directly going to be in this domain. One is going to be a domain on social media use, Facebook, Twitter, and all, and the other one is specifically on mobile applications…

Scott Nelson:    Okay.

Mukesh Kumar:        …on apps that you have for smartphones or iPads or on tablets. That guidance is also in the works, which will specifically address how should those applications be designed so that they can still be useful without again misleading the consumer.

Scott Nelson:    Got it, got it. Yeah, and that’ll be interesting, I almost wonder if we should have a followup interview later down the road when the FDA initially does release that guidance document. But for now, I want to go back to a couple of comments that you made earlier in regard to the fact that a medical device manufacturer needs to sort of empathize with the FDA in terms of how they’re viewing social media. And so correct me if I’m wrong, but it sounds like the FDA’s main concern is not initially the consumer, especially as it pertains to off-label promotion of products, of medical devices, but it sounds like they’re trying to take existing requirements, like an existing paradigm through traditional marketing channels and trying to apply that to social media, which is really quite different and very…iterative. Sorry, I [laughs] [00:14:41] say that word this afternoon. But social media changes so often, it’s really more about listening to customers versus actually marketing, so that seems like a rather difficult task to accomplish for medical device manufacturers to stay within the traditional confines of FDA regulation as it pertains to medical devices that somehow being able to utilize social channels to engage with potential patients, potential customers. So with that said, are there some best practices that you’re seeing or maybe that you encourage some of your clients to take on in terms of utilizing the various social channels to market or to promote medical devices?

Mukesh Kumar:        Yes, yes. Actually FDA is not averse to manufacturers using social media to market their devices, [00:15:37] but I did not know about it. So what we do advice is, of course, submitting everything to the Office of Prescription Drug Promotion or actually the Office of Device Promotion within the CDRH for medical devices. If you are planning to have a Facebook page, for example, for your product, and many products do have Facebook pages, if you’re planning to have that or if you’re planning to have a website dedicated to your product, then submitting all the content that’s going to appear on the website and actually submitting a potential website with all its color schemes and all the different links on it, submitting it to FDA’s advertisement division for review before releasing them is always a very good idea.

If you are going to allow consumer forums, if you’re going to allow things where people can post comments, either on your website or on your Facebook, then you certainly want to make sure to have some kind of control, some kind of review of any information. So, for example, we talked earlier about somebody hitting like on a comment on your Facebook page. So of course they don’t know this could be considered as a bad thing, but now that we know, companies should have standard processes for managing their information outlets, no matter what they are.

So having standard processes, so first thing, of course, when you initiate something, having the agency look at it and let you know if there is anything objectionable, and obviously, listening to them and revising it. And second is to have standard processes where you define what are your dos and donts for your information outlets. And third thing is to have individuals who are experienced and who are trained to monitor those things, to look for those kinds of red flag issues. For example, if you see an off-label promotion, an off-label use of a device being discussed on a forum that you run, then it’s very important for someone within your staff, because this is your website, to post right away a disclaimer information that this is off-label and the company does not endorse it.

And actually they do mention that in their off-label promotion of label guidance that whenever a manufacturer encounters or becomes aware of off-label information, either from a public or a private…somebody individually contacting the company [00:18:16], any of the ways, if the company becomes aware of an off-label use, they are supposed to provide full disclosure to the requester of the off-label information, which includes providing…first of all telling them that this is not something that has been approved by FDA, so there could be risks that they are not aware of. Second, directing them to R&D staff and not to marketing staff in terms of the tone of the information that goes out, and also providing other information that the manufacturer may be aware of, even information that may not be favorable to your device, providing all the information, and then documenting it in detail.

So there is a very formal process out there to manage off-label information, and very similar rules apply to social media. When you encounter something off-label in social media, then you want to certainly address it. Now, I should point out that although I keep mentioning off-label use, even for on-label use, it’s very important to have certain rules when you talk about social media.

Scott Nelson:    Okay.

Mukesh Kumar:        Another fraud alert, actually there was a fraud alert that came out of the Office of Inspector General within the DHHS yesterday, March 26th, which talks about physician-owned distributorships of medical devices and products. Now, for medical devices, it’s very common for physicians to invent medical devices. Many medical devices are invented by doctors who use them on their patients. Many medical devices are sold to physicians through manufacturers. Manufacturers usually go to a physician and offer them a device and so on. So any time a physician has a stake in a medical device, as an investor, as somebody who gets a commission on sales of devices, or any other financial relationship for the distributorship of a device, even if it is on-label, there’s a fraud alert, a special fraud alert by OIG especially discouraging that practice, especially talking about when a physician…

Because what was found was, in cases where physicians are also distributors of a medical device, they were giving the device a lot more, they were prescribing the device a lot more than it was necessary. There were unnecessary operations, there were unnecessary sales, there were times where sales where very highly aggressive on the consumers. So this actually plays into the anti-kickback laws that exist in this country, under which anybody who gets a kickback for sale of a device, either as a commission or any other…that’s considered illegal for medical products. So there is a special precaution for all medical device operations. When you talk to your sales agents, when you have marketing people go out and get physicians on board to sell your devices, make sure that those are looked at by lawyers and looked at by somebody, an anti-kickback specialist, to make sure that you’re not getting in that gray area where you could get in trouble.

Scott Nelson:    Sure.

Mukesh Kumar:        The Office of the Inspector General is investigating those things very, very closely.

Scott Nelson:    Got it.

Mukesh Kumar:        So it’s not just off-label, even on-label. So if you have a physician…many physicians have Facebook pages, many physicians have websites where they talk about what they do or whatever, and they make presentations on there or any kind of expertise [00:21:55] they attain, just make sure that those also get reviewed because they do impact your device.

Scott Nelson:    Got it, got it.

Mukesh Kumar:        And if [00:22:02] you would be liable for it, according to the FDA.

Scott Nelson:    Okay. So let’s go back to some of these best practices that you mentioned. Just to review, number one was submit all content that you’re building out for your social media site. Whether it’s YouTube Facebook, Twitter, etc., submit all that content for review by the FDA or by CDRH. The second best practice would be to have standard processes in place internally for your social media outlets, and then third would be have experienced people on hand that are ready to monitor your various social media channels in order to make sure that you as a company are abiding by the FDA’s standards when it comes to both on-label and off-label promotions. Did I sum that up okay?

Mukesh Kumar:        That is correct.

Scott Nelson:    Yeah. So I want to actually ask specifics, because this question actually came in from our audience in advance of this interview. And just for this listening, if you do have a question in advance of the interview, there’s a new tab on Medsider.com that’s going to allow you to actually submit a question in advance for the interview. But this question comes, and I’m just going to read it here to you Dr. Kumar, is that if a patient submits a question regarding a device via Twitter, how is it possible to present balanced information on indications, risks, benefits, etc. given the 140-character limit? How would you best answer that question?

Mukesh Kumar:        Very good question. Very good question, and actually there is a very direction from FDA in that. The direction is you reply to it by directing them to the right department at your organization.

Scott Nelson:    Okay.

Mukesh Kumar:        So you don’t have to give them all the response. What you do is you tell them, “Please contact this individual in our R&D department to get the complete information.” Don’t try to reply with anything other than that. Actually, they even provide examples of the kind of language they want to use, which should be pretty much nonsoliciting, noncommitting in any direction.

Scott Nelson:    Got it.

Mukesh Kumar:        So that’s a simple rule for something like Twitter, and that applies to even Facebook comments. When you get a comment, there is a limit as to how big a text you can type into that box and there would be always a problem. So you always send them the contact information and tell them, “Please send your question to this individual at this email address and we will send you the detailed information,” and only [00:24:40] that information.

Scott Nelson:    Yeah. No, that’s great stuff. So instead of feeling like you have to respond and actually answer that question via Twitter or through the limited number of characters on a Facebook comment, for example, it’s best to either direct them to a certain department, or maybe even direct them to a particular webpage that has content that’s already approved?

Mukesh Kumar:        Yes. Yes, absolutely. Yeah.

Scott Nelson:    Would that be another way? Okay.

Mukesh Kumar:        Yes, that would be another way. Absolutely. I mean, anything that’s already you know it’s [00:25:08], you know it’s kosher, send it to the address site and send them to that location instead of trying to respond right there.

Scott Nelson:    Got it, got it. Okay. And I guess this is a nice segue to another question that came in advance to this interview from the audience. I’ll read it to you again here. If misinformation, or let’s call it maybe off-label information, is posted on a site for a particular medical device, is it the company’s responsibility to address it even though they maybe aren’t the owner of that particular website?

Mukesh Kumar:        Well, it’s a gray area. If the website is owned by the manufacturer, then yes they need to respond because they are responsible for anything that’s posted on the website.

Scott Nelson:    Okay.

Mukesh Kumar:        But if the information is posted on a publicly-held website, something like, let’s say there’s a consumer forum and within that forum people post information about a device or a drug, the company does not have any liability so long as it does not participate in those responding, if they do not say yes or no or anything like that. If they do not support and if they do not say anything in either way, being negative or positive, they stay out of it, then they don’t have any…because there are several consumer forums on the web, online, which may talk about many different uses, and it is not reasonable and actually the agency agrees that it is not fair to expect the company to know everything that’s out there on the billions of pages out there.

Scott Nelson:    Got it.

Mukesh Kumar:        So what they do expect, if it’s your website and somebody posts on your Facebook page or your website or a forum that you created, then yes, you should address it, you should correct it. As I said earlier, respond by posting a note saying that this information is off-label and has not been [00:27:04] by FDA so that it’s clear that you are not endorsing it. But if it is not controlled by you or if it’s a public blogosphere somewhere, then you don’t have any liabilities.

Scott Nelson:    Got it, got it. Yeah, that makes sense. So it’s not like a device company or a pharma company, whatever umbrella you fall under, it’s not like you have to feel like you have to monitor every single web property on the Internet. It’s just basically the web property that you own and produce content for, you need to make sure that everything is legit and approved by the respective regulatory agency.

Mukesh Kumar:        That is correct. That is correct.

Scott Nelson:    Got it.

Mukesh Kumar:        You know, there was recently another congressional hearing where the CDRH’s director was asked the question that many a time device manufacturers are well aware of an off-label use of their device, and how does the agency approach it? And the answer was that unless a device manufacturer goes out and actively markets a device for off-label use, there is no restriction on doctors using a device in an off-label fashion. So even though the manufacturers may be aware of it, they don’t have to go out and specifically get an approval for that off-label use or do anything else other than not participating in marketing.

Scott Nelson:    Okay.

Mukesh Kumar:        The FDA is very clear that they do not want to restrict doctors from using any product that could help a patient. The only condition they have, which is what I talked earlier about the physician-owned distributorships, and they call it POD, the physician-owned distribution, P-O-D. And in the case of a POD, agency certainly considers the physician now no longer a physician but actually a manufacturer or a distributor, so their liabilities change.

Scott Nelson:    Okay.

Mukesh Kumar:        Other than that, if somebody, if a physician is using your device for off-label and you know that it can be used but there’s nothing you can do, you’re not marketing it for that purpose, you don’t have much liability in that case.

Scott Nelson:    Got it, got it. Okay. And I want to go back to kind of the second best practice that you mentioned earlier in regard to having standard processes in place. Now, in your experience in helping some of your clients deal with this issue, with social media and marketing of FDA-regulated products, without going into I guess too much detail, are there some standard processes that come to mind or that are worthy of commenting on right now?

Mukesh Kumar:        In terms of social media, there are certain things I always advise people not to do. So I advise them to stay out of Twitter because it’s very restricting in terms of how much you can post and it always hurts you. So I always tell people that don’t use Twitter too much to market your device, actually stay away from it, and tell your management and your personnel to not use that to talk about your products.

I also tell my clients to stay away from solicited blogs, blogs that you pay for, you have a paid author blogging about your device. I do tell them to stay away from it because it can be, you know, somebody saying something… Unless you control every word somebody writes, it could potentially lead to some landmines for you later.

A third thing that actually is going to also become much less now because of the Sunshine Act, within the Affordable Care Act there is a provision for Sunshine disclosures where manufacturers are supposed to disclose any payments made to physicians, any payments of any kind, including payments for clinical trials. So it’s a very, very expanded Sunshine Act, expanded in terms of what used to exist in certain states, where when physicians are involved in talking about your product, it could lead to issues for the physicians and for the manufacturers’ legal liability issues.

So, in general practices, I tell people to stay away from these three things, stay away from Twitter, stay away from solicited blogs, and stay away from hiring physicians to talk about your product because even a good product could get bad name because of bad practices. Other than that, as I said earlier, having the content reviewed by the agency, having the practices to avoid any kickback issues, and training people appropriately addresses most issues.

Scott Nelson:    Got it. Got it, okay. Okay, and as we reach towards a conclusion here to this interview, there’s another question that I want to make sure I answer that I thought was really good, that one of our audience members submitted in advance, and again I’ll read it off here to you. Of course, we all know medical device companies are required to report adverse events to the FDA. If unidentified patients post comments regarding adverse events on a website not controlled by the medical device company, is that company then required to report the event to the FDA or attempt to contact the patient?

Mukesh Kumar:        Well, yes and no, and I’m sorry for being so vague about it. In terms of liability of a manufacturer for an unidentified patient, an anonymous patient posting an adverse event, legally there is no liability for the manufacturer. Manufacturers are supposed to report any complaints they get directly, but not what somebody posted on some website that they don’t even know who’s the poster. But at the same time—so that’s why my no answer.

                           In terms of if the complaint is similar to what they have heard from other patients that did report to the manufacturer directly and the manufacturer becomes aware of some additional complaints out there that they cannot verify but they may be out there, they should discuss their post-marketing plans. They should look at their post-marketing commitments, what they made to the agency, if they made any, about what their commitments are, because if the post-marketing commitment is to collect all safety information and let FDA know, then they may have to make a [00:33:44] submission to the post-marketing study letting the agency know that they have become aware of this adverse event, that they are trying to verify but they don’t know what it is about. It is very similar to when you do clinical trials and you have lost to followup.

Scott Nelson:    Mm-hmm.

Mukesh Kumar:        [00:34:03] all the time that a patient has an adverse event, somebody called, maybe the patient himself or herself called you and said, “I don’t want to come again because I had this adverse event,” and the patient refuses to come back to you and you call the patient multiple times, you try to reach out to the patient but the patient is not traceable. And what we do in that case is we actually let the agency know that we did all things reasonable to contact this patient but we’re not able to, so we’re calling it lost to followup.

Something that is similar applies to this kind of side effects that you talked about.

Scott Nelson:    Got it.

Mukesh Kumar:        So the case is there where manufacturer may have to do something more. I would advise them to talk to their regulatory consultants and see what’s the right approach depending on the adverse event. I mean, the more severe the adverse event, the more worried should be you. Simple as that. If it is something like somebody dies or somebody’s claiming that they have like severe disability which would be considered as a major adverse event, then I would suggest, for your own sake, try to find out if you can.

Scott Nelson:    Got it, got it. Okay, very good. And then lastly, before we end this interesting interview, it’s obviously a challenge for medical device companies to utilize social media, a lot more difficult than other verticals. If they [00:35:28] for education or name your other vertical, it’s a lot more challenging for device companies. Having said that, there appear to be a lot of benefits, too, to utilizing social media. So what’s your take in summary in regard to medical device companies and whether or not they should jump in to social media?

Mukesh Kumar:        Oh, I think you cannot hide from it. Social media is here to stay. I mean, these people are going to talk about your product on Facebook, on Twitter and on everywhere else, and you should certainly take advantage of this very, very valuable tool to talk about you.

Scott Nelson:    Mm-hmm.

Mukesh Kumar:        Absolutely. I encourage people to use any technology out there to talk about their product, with all the precautions that I mentioned, taking care that you don’t get accused of doing something that is illegal.

Scott Nelson:    Yeah.

Mukesh Kumar:        But social media is something that is going to stay. I mean, I don’t think a company can hide from social media.

Scott Nelson:    Yeah.

Mukesh Kumar:        Even if you don’t have your own Facebook page [00:36:39], you would still want to have a website, I’m sure. Most products have websites these days. You want to control information. I think it’s very, very important for a manufacturer to realize that in this information age you want to control information, both good and bad, because what you don’t want is somebody badmouthing about your product on a social media indirectly, somebody saying something bad about your product which is not true. So it could be used in both positive and negative ways.

So you should certainly…I think the first thing we should do is definitely look at what are the most appropriate social media tools for you. I’m all for websites. I’m all for having YouTube videos talking about uses. I’m all for having Facebook pages. I’m a little biased against Twitter because of the limit of the amount of information you can post. So only thing you can post on it is a web link or contact information due to the limit in characters.

Scott Nelson:    Mm-hmm.

Mukesh Kumar:        I’m also a little skeptical about any other media which controls the accuracy of information. If it is uncontrolled information, there is good chance of error in that information. So I think companies should certainly investigate and try to have social media departments within themselves where they have individuals who help them come up a social media plan, individuals who monitor social media and also who make sure that whenever needed they get appropriate approvals and are trained to do those kinds of things.

Scott Nelson:    Yeah.

Mukesh Kumar:        So, I mean I personally believe that if you are not going to do it, you are probably going to get hurt more than you want, because it is here to stay.

Scott Nelson:    Yeah. Yeah. No, no, that’s a great summary, and like you just mentioned, I think if device companies don’t jump on board, they’re certainly going to be much farther behind in comparison to their competitors that have already embraced social media but are doing it properly and under the correct guidelines and requirements as introduced by the regulatory agencies. So cool, very good. Well, let’s [00:39:02] call it good, Dr. Kumar. But for those listening that have stuck through and listened this far to the interview, where’s the best place for them to learn more about Amarex, to learn more about you? Where do you want to direct the audience to?

Mukesh Kumar:        Well, if you are going to give out…I would say going to the website of the company is a good place to know what Amarex does. My contact information, please make it available, and if somebody has a question that I can help with, I’m more than happy to do that.

Scott Nelson:    Okay.

Mukesh Kumar:        There are seminars that I have done on this topic, so if you Google my name and social media, you’ll probably find links to those webinars. These are web-based seminars that I have done on this topic talking about the FDA’s guidances, and there are others that I am planning to do in the near future. So I would say there are several ways to reach out to me and my company to find out more about it, about these things. We do consult with many clients on these aspects these days because this is very, very important for pretty much every aspect of this industry, from clinical trials to marketing and post-marketing and so on. And actually, this is considered a very important marketing technology these days, particularly in the international scene because we have way too many clients who are based in one country but they have customers based in other countries who found out about them from websites by searching. So it has certainly a significant benefit to the users, to the manufacturers.

Scott Nelson:    Got it.

Mukesh Kumar:        Of course, everything comes with its own limitations if not used properly.

Scott Nelson:    Sure, sure. That makes sense. So just to those listening, yeah, I mean I certainly did the same. You can certainly Google Dr. Kumar’s name and social media and there’ll be a whole list of various websites that he’s been featured on or done presentations for or webinars for. It’s Dr. Mukesh Kumar, M-U-K-E-S-H is his first name, last name is Kumar, K-U-M-A-R, and I’ll of course link up to the website for the show notes for this particular interview. And then Dr. Kumar, why don’t you go and give the website for Amarex?

Mukesh Kumar:        Yes, it’s www.amarexcro.com, and my direct email is mukeshk@amarexcro.com.

Scott Nelson:    Got it. Okay. So it’s just your first name and then k, mukeshk@amarexcro.com.

Mukesh Kumar:        That’s right. That is correct.

Scott Nelson:    Got it. Very good. Well, thanks a ton for coming on the program, Dr. Kumar. Really appreciate your insight. You could tell that you’ve spent a lot of time studying this topic and are very knowledgeable in regard to the use of social media pertaining to a highly regulatory industry like the medical device space. So thanks again for coming on. Really appreciate it.

Mukesh Kumar:        Thank you, Scott. It’s a pleasure.

Scott Nelson:    Alright, sounds good. And for those listening, thanks for hanging with us this long, and for additional interviews you can of course go to Medsider.com/interviews. You can also find the podcasts through iTunes. If you just do an iTunes search for Medsider, M-E-D-S-I-D-E-R, you could find our podcasts there and subscribe for free. So until next time, thanks everyone for listening, and make it a great day.

[End of Recording]

 

More About Dr. Mukesh Kumar

Mukesh Kumar Medical Device Social MediaDr. Mukesh Kumar is the Senior Director of Regulatory Affairs and Quality Assurance for Amarex Clinical Research. His key expertise is in global regulatory and business processes for medicinal and diagnostic products. Dr. Kumar serves on the Board of Editors for the Regulatory Affairs Professionals Society (RAPS). He is also the President of the Global Alliance of Indian Biomedical Professionals. Dr. Kumar holds a PhD in Biochemistry with specializations in virology, gene therapy, and molecular biology. He has worked as a research scientist at the NIH, Baylor College of Medicine in Houston, and premier institutions throughout India.

The 6 Key Digital Marketing Options That All Medical Device Companies Need to Consider

Medical Device Digital Marketing OptionsIn the mad rush to arm your medical device sales force with the latest iPad apps, have you stopped to consider whether your digital marketing efforts truly align with your overall marketing and sales objectives?

It’s a mistake that a lot of medical device companies are making.

Perhaps more important, have you placed enough emphasis on training your sales force how to properly use the expensive digital tools you’ve provided them with?

In this interview with Asher Cameron, VP of Account Services for Infuse Medical, we learn how to differentiate between “marketing digital” and “digital marketing” in an effort to define a strategic digital marketing plan for your medical device company.

Here’s What You Will Learn

  • The 6 digital marketing categories that medical device companies should consider.
  • What digital marketing option carries the most potential for disrupting the traditional medical device sales channel?
  • The anatomy of effective medical device mobile applications.
  • What is the #1 digital marketing request from physicians?
  • And much more!

This Is What You Can Do Next

1) You can listen to the interview with Asher Cameron right now:

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2) You can also download the mp3 file of the interview by clicking here.

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3) Read the following transcripts from my interview with Asher Cameron.  Also, feel free to download the transcripts by clicking here.

Raw Transcripts of Interview

Scott Nelson:    Hello everyone, it’s Scott Nelson, and welcome to another edition of Medsider.  This is the place where you can learn from med tech and medical device experts on your own terms without going to school.  And on today’s program we’ve got Asher Cameron, who’s VP of Account Services for Infuse Medical.  Thanks for taking some time out of your busy schedule, Asher.  Welcome to the program.

Asher Cameron:       Thanks, Scott.  I appreciate being here.

Scott Nelson:    Okay, so it was either last week or the week before, you presented at the Medical Devices Digital Marketing Conference hosted by ExL in Minneapolis and you started out your presentation with digital marketing or marketing digital, and I thought that was an interesting phrase.  Can you expound on that a little bit more?

Asher Cameron:       Yeah, it’s a great question.  One of the things that we’ve noticed, as technology expands across the entire not just medical devices but across any industry that’s benefitting from mobile technology in particular, is that it’s very easy to be so enthralled by the technology that we get in the mode of rather than continuing to focus on our marketing plans, marketing sales and training objectives and matching those objectives with the best option digitally, that sometimes we can fall into the trap of not doing digital marketing but marketing digital or marketing a digital solution, pushing a tool or application out because it’s cool and it’s neat and it’s high-tech versus ensuring that we are lining all the tools that we’re developing to meet our marketing and sales objectives.

And so that’s why I felt like at the conference starting out with that.  But it’s important that, again, the iPad hasn’t changed marketing, and the iPad 12 with Siri and hologram Siri or whatever technology may come out here 10 years from now is not going to change marketing.  We still have the same core marketing objectives, it’s just we have a lot more effective tools now digitally to achieve those objectives, and so I feel it’s important to continually focus on the marketing plan rather than on the digital.

Scott Nelson:    Sure, and I completely and wholeheartedly agree, and as we discussed kind of on the pre-interview, I myself, and I’m sure there are people listening in the audience right now that have received the same, you know, the latest and greatest app from their large medical device company whether it’s Medtronic or Covidien or Boston Scientific, I’m not naming names in particular, but you received the same, you know, this nice-looking and well-done iPad app but it’s like, “This is really cool and thanks, but I’m not entirely sure if this is going to help me move the needle anymore than the [00:02:43] traditionally behind print-based brochure,” and so I love that point, marketing digital or digital marketing.  So with that said, in terms of aligning some of the digital marketing options, in terms of aligning those with the currently existing marketing or sales plan, can you speak to a few that are currently available…?

Asher Cameron:       Yeah.  No, it’s a good question.  There are six major categories of digital marketing options out there, and I can provide this information to you, Scott, that you could post on your website just to help the listeners to have a guide as they’re evaluating what digital marketing options that would best help them meet their objectives.

Scott Nelson:    Sure.

Asher Cameron:       There are really six categories:  Interactive sales tools, mobile management, immersive interactive, medical education, technology visualization, and web and email, and I’ll just briefly just touch on each one of those.  Interactive sales tools are any type of sales tool that you’re producing for a mobile base or mobile sales force that would enable them to better help display features and benefits and differentiate their product against the competition.  Previously, that has taken the form of print brochures, or maybe even a PC module that somebody would open up a laptop, and now obviously with the introduction of the iPad over the last couple of years, there are very highly interactive sales tools that support and enable the sales reps in a very compelling way when they’ve got 90 seconds at the scrubs sink outside of the OR to grab the surgeon to be able to in a very short period of time very quickly get out the key value proposition of their device in an interactive way through these types of interactive sales tools.  So a lot of mobile applications have been developed.  That’s the interactive sales tools.

The second area is mobile management, and it again is a category of something where technology is going to change over time but there’s still going to be a need to continually provide a way to get information to field-based representatives and be able to manage content on the devices that they’re using.  So mobile management is everything from using AirWatch and mobile iron from a device management standpoint, to app stores, enterprise brand app stores for app distribution as well as content management on mobile devices, so pushing documents and interactive content dynamically to mobile devices and controlling that content is a key area.

The third key area is an emerging area called immersive interactive, and what we’ve seen, and Infuse Medical has been fortunate to participate and be an innovator and leader in this new field, and that is the development of surgical simulations, virtual procedures and product simulations for the Nintendo, Wii and Microsoft Kinect.  And so these are ways, technologies that enable much more immersive training and learning environment for clinicians, for sales reps, and again, we see a lot of interesting things coming out from a technology standpoint in this area to make it even much more virtual and interactive in that space.

The fourth area is medical education, and this is an area, again, that’s never going to go away, that will always be training reps [00:06:11] as medical device marketers, not only internally training but also training clinicians as well.  And so there are a number of options to provide and deliver medical education, everything from learning management systems all the way to other web-based tools, mobile tools, so a number of different platforms.

What’s been interesting is there was a recent learning management conference that our VP of creative services attended in which they talked about an entirely new platform for learning management systems now, which is called Tin Can.  For the last 15 years, most learning management modules on learning management systems or LMSs have been developed under a paradigm called SCORM or SCORM-compliant courses.  There are a lot of limitations with that, and so they have an entirely new paradigm or architecture that’s going to undergird learning management in the future called Tin Can.  It’s going to provide a much more interactive way to deliver learning management as well as get metrics out of that interaction with that content.  It’ll be much more robust.

The fifth area is technology visualization, and this area, traditionally it’s 3D animation but there are other ways as well now through video, through motion graphics, anything visual, technology that enables somebody to watch and visualize, technology to visualize anatomy, and that’s technology visualization.  Again, we joke about it but it really is true that we expect holograms and those types of technologies to come out one day and really be useful in a medical setting.  At the very least, we’re seeing 3D right now and we expect those types of technologies to continue to develop.

And the last area is web and email, and again, going back to that whole notion of marketing digital and digital marketing, Twitter and email and website didn’t create communication.  Obviously, we’ve been communicating for a long time now in the medical device industry and getting our message out there, but these technologies enable us to form communities and to deliver messages and manage conversations with communities of not only sales reps and not only internally now but with physicians and with patients even.  A lot of innovative stuff is going on in the social media space with developing communities around device users, patients and physicians and those who want to interact and talk about their experiences and utilization of devices.

So those six categories we’ve seen are going to be persistent over time.  The technology will change within the categories, but those are six major areas we see of digital marketing where medical device marketers can evaluate options in those six areas to meet their marketing sales and training objectives.

Scott Nelson:    Okay, great.  I’ll give you a second to breathe or maybe even get a drink, but that’s good stuff.  And just as a review for those listening that maybe were taking notes or just want a little refresher, the six categories, interactive sales tools – mobile management, immersive interactive, medical education, technology visualization, and then the sixth being web and email.  That’s great stuff.  Thanks for sort of breaking that down from a numbers standpoint.  Real quickly, in regard to technology visualization, that category, do you have like an example of what that would be?  I mean, I know you mentioned holograms but I’m trying to—how is that different than, say, immersive interactive?

Asher Cameron:       Yeah, that’s a good question.  So most of interactive is much more on a platform basis like Nintendo, Wii or Kinect, and again, the technology is going to change over time.  There are virtual reality glasses and other ways for people to have an immersive experience.  Technology visualization are things like, for example, the traditional, the primary technology or visual marketing option is 3D animation, and the reason why we call it technology visualization is that many times, in particular when you have a procedure that’s happening internally, in internal anatomy, you’re needing to be able to zoom in very closely to something that’s happening in that surgical procedure, being able to control what the viewer is seeing, the level that they’re seeing it at and control the entire experience of what they’re viewing is what technology visualization is about.  So it’s 3D animation, would be the best example of technology there, is the ability for somebody, a developer, a digital agency, to be able to help you control and help a user completely visualize a procedure all the way down into its microscopic or even molecular level.

Scott Nelson:    Okay.  Okay.  That makes sense.  And when you look at these six categories, I mean, I guess two followup questions.  One is, I’m curious as to what your favorite is, what you continue to be wowed over by, and then second, what category do you think has the most potential or most disruptive potential in terms of the traditional sales and marketing channels that medical device companies have utilized for the past 50 years or so?

Asher Cameron:  Yeah, so I think in terms of the different areas of technology, I think one of the things is a really important point in this, and that is that those six areas really should be viewed as an integrated whole from a marketing standpoint, meaning that one of the challenges, as we know we have medical devices, we don’t have pharma budgets.  We don’t have multimillion-dollar budgets to go out and do major advertising campaigns and develop very expensive programs, and so many times we’re dealing with 15,000-, 20,000-, 25,000-dollar budgets to be able to develop somebody’s tools.  So one of the most important things I think, not only from just a practical standpoint but also from a cost standpoint, is to make sure that we’re leveraging the content that we’re creating across the different platforms.

So, for example, if I’m creating some content that’s part of a learning management system module, I should look at reutilizing and repurposing those assets in a mobile application or on my website.  And so really there’s an integrated whole.  My entire marketing program or digital marketing program then involves a number of these different technologies, but it’s across the platforms that I want to be using and repurposing these assets so that I can have a consistent message across whatever platform I’m using.

Scott Nelson:    Okay.

Asher Cameron:       So I think that’s the important point on this as well as to—it’s really not about picking one of these areas, it’s more about here are the various options you can consider, but make sure to really evaluate that you’re leveraging content and what you’re doing across these different areas, not only again from a cost standpoint but from a consistency of message standpoint.  I think one of the things we talk about here at Infuse Medical, our company is a reflection of what our customers want us to be, and our customers and clients have wanted us to be focused on recently mobile application and mobile development.  That’s been one of the major areas of what we’ve done.  So we did a lot of 3D animation and learning management modules and PC-based stuff up until a few years ago, and then mobile really has changed a lot of our focus and what our clients are asking us to do.

So we continually see right now that mobile hasn’t gone away.  There have been innovators in the market that we’ve worked with, the Medtronics, Boston Scientifics, St. Judes of the world,  Bard, Terumo and others, but there are a lot of companies out there that are still trying to figure out what direction they want to go, whether they should purchase iPads for their sales force or not, if they do what applications should they do, etc.  And so we still see mobile as being the main area of digital marketing where there continues to be a lot of focus in terms of developing tools in those areas and making decisions around what platform to go with and how to build a mobile platform and deploy it across a corporation.

Scott Nelson:      Sure, okay.  And do you see, when looking at especially maybe the immersive interactive category and/or the technology visualization, [laughs] I’m struggling to pronounce visualization, but when looking especially at those two categories, do you think either of those has the potential to almost provide a different way for sales reps to interact with physicians?  So let me give you an example.  So instead of a device sales rep driving one or two hours to help cover a procedure, help cover a case, perhaps they could do it virtually through some sort of platform where the hospital has access to it as well as the rep in wherever location they’re at?

Asher Cameron:       Absolutely.  That’s a great example.  Particularly, we’ve talked with capital equipment manufacturers.  It’s very expensive to have capital equipment in the field and maintain it for sales reps to do demos.  And so having, using some of these immersive interactive tools as you mentioned—and again, it could be multi-platform, so I’m not really talking specifically.  I mentioned Microsoft Kinect, Nintendo, Wii, but there are a lot of other platforms.  It’s not as much as the hardware as it is kind of what your objective is and who you’re trying to reach and the best platform for that objective, but that’s exactly right.  So it’s some way for you to be able to have a virtual classroom or a virtual suite, a training suite or something where you could deliver content virtually or deploy training virtually and have for example a virtual simulation or virtual procedure being done rather than having somebody have to go to a cadaver lab or have to bring in any other type of simulations, physical simulations, for somebody to be able to conduct or get training on procedures.

Scott Nelson:    Sure.  Okay.  And kind of moving beyond these six categories, perhaps we can draw back to that list, but at that ExL conference I think you shared or at least provided some information regarding the anatomy of an effective medical device mobile application, can you share that, what exactly does that look like, the anatomy of an effective medical device mobile application?

Asher Cameron:       Yeah, absolutely.  We’ve been fortunate enough to work with a lot of different clients and we’ve done—currently, our agency, Infuse Medical, has completed over 125 custom iPad applications for medical device companies and one of the benefits of being able to participate in part with clients and doing those projects over time is that many times we’ll go out and help our client launch the app at a national sales meeting.  And so we interact with a lot of these sales reps and we get feedback from them and from their marketing colleagues as to what’s working and what’s not working in the field.  And over time we’ve found that there are common elements to what was an effective medical device application, again going back to that whole notion of instead of doing an application and pushing it out there and having the sales rep say, “Okay, here’s your app and you guys figure out how to use it,” we really will sit down with our clients.  I think [00:17:14] do this from a principled standpoint in marketing is meet with your sales advisory board, meet with various sales reps, travel with your sales reps, understand their sales call, understand the challenges they have not just in presenting the information but what are their sales administrative tasks and other things they’re doing, and really develop a tool to mimic and align to the way the sales rep is selling rather than putting a tool out there that may be cool and have some cool things in it but doesn’t necessarily align with they’re selling.

So we thought there are four common categories of elements of what we’ve seen to be very effective iPad applications, medical device iPad applications.  The first is dynamic content management, which is really the foundation.  So what that means is an ability for an administrator such as someone in marketing to be able to push or deploy content dynamically that syncs with the sales of iPad apps.

So typically for us, for example, at Infuse Medical, we have what’s called our Ether Dynamic Configuration Platform or Ether DCP.  It’s a mobile platform that enables an administrator to log into a web-based system, upload content into the system, and that content then dynamically and wirelessly syncs over the air with all the sales reps’ iPad apps.  That’s been critical because the sales reps need the information now.  They need it as a one-stop shop.  They don’t want to have to call marketing or track down the email that was sent out three weeks ago.  They want the latest and greatest information and they want it at their fingertips, and so that’s why that really forms the foundation of being able to dynamically sync content with all the iPad applications we have in the field.

The second one is sales presentation tools.  So what we heard from sales reps is, “Hey, it’s great.  I absolutely need to be able to have my PDF and my videos and my documents and other even dynamic content sync with the iPad, but I also need the presentation tools.  I need this to really be a tool to help me sell.  Again, if I’ve got that 90 seconds at the scrub sink outside the OR with the surgeon, I need to be able to quickly get out my key message, my key value proposition.”  So that second area is our sales presentation tools, so interactive tools where they can visually show features and benefits, visually show a competitive comparison how their device compares with another device in a very interactive way, engage the physician, surgeon or clinician and be able to display that information.

One of the things that we found that’s so important about having that is that not only does it help the sales reps to deliver their message but it also helps to ensure from a marketing standpoint that we as marketers are delivering much more consistent methods in the field.  We’re not as reliant upon the top sales reps and their ability to retain information, their skill set versus the bottom reps who don’t really get it or are really struggling with training them.  The tool enables the sales force to be much more consistent in how they’re presenting message to our clinician customers.

The third area is sales productivity.  So this gets back to the comment I mentioned previously of making sure that we really understand the sales call of our field-based sales reps, understand the channels that we’re using to sell and really understand what are some of the administrative tasks that they’re doing that are taking a lot of time.  So our sales reps, for example, if they’re trying to configure a product for a customer, they bring up a massive spreadsheet with the drop-down menus that was built by some Excel wiz in marketing that’s kind of clunky.  It doesn’t provide the best user experience in terms of presenting that to the commission.  Is there a way for us to streamline some of these processes and develop tools that really enable the sales reps to much more effectively sell?  So there are many tools as an agency that we’ve been involved with, things like dynamic database with references, being able to reference product codes, reimbursement codes, configure products, do product configurations and send those quotes in a PDF to customer service.  So all of those types of productivity tools that make the sales rep much more effective.

And then the fourth area is training.  So, as we know, sales reps are busy and many times training is done through a learning management system that’s web-based, and so a sales rep needs to go home at night and at six o’clock and kids running around and the dogs barking and they’re trying to take a learning management module versus being able to deploy training on the iPad so in the 15 minutes between a case a sales rep could get into the iPad and get into that learning management module, [00:21:54] not need an Internet connection, be able to take it offline, complete course, and then when the iPad gets an Internet connection the course then syncs with the learning management system and you still have visibility of all those metrics.

But those four areas, again, is what we’ve found apps will have either one or more of those elements, dynamic content management, sales presentation tools, sales productivity, and training.

Scott Nelson:    No, that’s great stuff, and thanks for the review.  That’s really great stuff.  And hopefully everyone that’s listening, that provides a nice platform to at least begin to research some of these digital marketing options and what you potentially need to have when beginning to build out the marketing plan when it comes to everything digital.  That’s great stuff.  And then speaking of the anatomy of the effective medical device applications, in sort of the apps arms race that you could probably testify to this that we’ve seen over the past several years within the medical device space, what’s your advice for companies that are struggling with, “Okay, we like everything that you’re saying, Asher.  We see the potential.  We love the potential but we have no iPad-ready content.”  The flipside is a company that says, “Let’s put everything we have on the iPad.”  How do you balance the two?

Asher Cameron:       Yeah, it’s a great question, Scott, because we come across a lot of companies that say, “Listen, I’m not Medtronic,” or “I’m not Boston Scientific and I don’t have that marketing budget, and where do I even begin with this whole thing?”  There’s no question of how there is somewhat of an ego thing to have an application and be able to say, “I have my own iPad app and that’s my iPad app that we’ve done,” and so it’s cool to have an iPad, there’s no doubt, but there really is a justification for doing these mobile tools because of, again, the ability to meet your marketing objectives.

So the first thing I would say to anybody who kind of feels overwhelmed and says, “Gosh, it seems like I should be doing something and I’m getting pressure here from the sales force or from my boss to say, ‘Okay, what are we doing in this whole digital marketing space and should we be getting iPad to the sales force?  What should we be doing here?’” is first of all, again, don’t be intimidated by what anybody else is doing out there because this is all about your marketing plan and what you need to do to meet your objectives.  What may make sense for one company may not make sense for another company because maybe you have a capital equipment product and your sales force is selling capital equipment, somebody else is selling disposables, and that again creates a difference in terms of how you’re selling.

So first of all, again, don’t feel pressure that just because other people in devices have spent a lot of money in building out these tools that you need to do all that and have something.  It’s very easy to start small and I think hopefully, again, by going back to this notion of, “Okay, what are my key marketing objectives?  What do I need to do?” that you could start with that primary objective.

One of the questions that we ask clients when we sit down with them, again going back to this whole foundation of an effective iPad app or effective mobile application, is to say, “How are you currently distributing information to your sales force?”  Again, that’s not a digital marketing question.  That’s a marketing question.  It’s part of what we do in marketing, is we get our message out to the field.  We provide the tools necessary to market our device.  And typically that question [00:25:36] spawns a good conversation to say, “Okay, well, how am I getting information out to the sales force?  Well, I’m getting PDFs and brochures and I’m emailing that,” or, “Maybe I have an internal portal that I’m updating, and actually, to be honest with you, I’m really not updating it and marketing never updates it, and the sales force is supposed to log into it and they never log into it.  So nobody ever updates.  So really, we just email out stuff or we have binders of information or whatever we do, we get it out there, but it’s not the most effective way.”

So you can start right there with that marketing objective, is, “Okay, let’s evaluate how we’re delivering our message to the field, how we’re utilizing our sales channel.  Is there a more effective way for us to get information to them in the field?  Let’s figure out the best way to do that.”  So I definitely would start with those core objects in marketing of, what’s the biggest challenge you’re facing?  Is it sales productivity?  Is it getting your information out to the field?  Is it clinician training?  What is that objective?  Let’s start with that.  And that really is going to be the best first step in terms of evaluating the best digital marketing option to go with.

Scott Nelson:    Gotcha.  No, I really like your approach of going back to the basics, the basics of marketing and how are you currently distributing your content versus just jumping on the iPad or the mobile bandwagon and sort of running with the hype or running with the crowd without really having a solid game plan moving forward.  And I know we don’t have a ton of time left, so I’ve got to be selective with my questions because there’s a whole host that I’d like to continue to ask you, but really quickly, have you seen a problem with some medical device companies committed to—they have allotted a relatively large amount of money to developing some mobile tools, or some digital marketing tools I should say is probably the better description, but yet they don’t do a good enough job or they don’t focus enough on actually training the sales force how to actually use the app or the tool effectively?

Asher Cameron:       Yeah, it’s a really great [00:27:32] place and we’ve seen that before, and again I think it gets back to this whole digital marketing versus marketing digital that I think it’s really important for us as marketers.  I can say personally one of the biggest mistakes I made earlier in my career as a medical device marketer was assuming I knew what the sales force needed.  And sometimes it was offensive to me when I’d go to a national sales meeting and I’d show them, “Here’s my launch packet or something, a tool I’ve developed and I put in my blood, sweat and tears to create this,” and the sales reps say, “Hey, Asher, this is great, but there are just a few more things we need,” or, “This is not exactly what we need.”

So one of the things, as I’ve said, in talking with clients is, the judge of whether a tool is effective is not the toolmaker but the tool user.  So even though you’ve got a very large budget and you’ve got a lot of tools out there, it’s very important for you to understand the tool user, and that’s that sales rep.  So traveling with the sales reps and understanding those sales calls, working with sales advisory board.  Don’t just work with the top reps as well.  Work with some reps who are struggling as well.  Get their feedback.

And to ensure that just like we get design inputs when we’re developing a medical device, get design inputs for these projects to ensure that the tools align with how your sales reps are selling.  I think when that happens the training becomes a lot easier because it becomes intuitive and the sales reps can see, “Hey, this is a much effective way of doing what I’m already doing,” versus, “You gave me a tool that’s forcing me to do something completely different.”  We even had a client recently who part of the application that we developed was an entire physician interviewer algorithm that a sales rep could walk through in a very consultative sell to say, “Okay, I’m going to walk through this interview with you now, doctor.  Tell me what you’re currently using.”  “Okay, based on what we’re currently using, have you seen this technology?” or “We’re currently using that.”  And it really was an algorithm that mimicked exactly the element they wanted to do.  To me it was a great example of marketing, not just digital marketing but a great example of marketing of then providing a tool matched up exactly with how they want their sales reps to sell.

All of that again is a longwinded way of saying when that is done, then training becomes very easy, so when you go to the national sales meeting or have the webinar and deploy the tool to the sales reps, the 45 minutes you’re spending or an hour you’re spending with the sales reps walking through the tool, they get it right away because, again, it mimics their existing sales call and sales process.

Scott Nelson:    Gotcha, and I especially like your comment about when you’re basically studying the sales force, how they potentially use a certain tool, don’t just ride along, of course interact with the sales leadership council or whatever you want to call them, but make sure you ride not only with the top reps but also those reps that maybe are having an off-year or maybe that are kind of the median level, I guess, for lack of a better description.  I think that’s an important fact that companies would be wise to consider for sure.

So in our time left I definitely want to ask you a few questions about Infuse as well as your background before you made the move over to Infuse Medical.  But real quick, was there anything that stood out in regard to the data that I believe James Avallone, I’m not exactly sure how to pronounce his last name, with Manhattan Research, the information he presented on how physicians are responding to digital tools?  Was there anything that jumped out to you that you walked away surprised with in regard to the content that he presented?

Asher Cameron:       Yeah, there was.  And just for the listeners so they have the background, so Manhattan Research is a research firm that is really in my opinion one of the leading firms in terms of understanding the adoption of digital tools and mobile tools in healthcare, so they’ve got a lot of research over physicians’ use of iPads and the use of mobile technology and other digital technologies in healthcare.  The thing that really jumped out to me, Scott, was something that I actually saw Manhattan Research present last year at the digital marketing conference, and that was that the number one request from physicians of medical device companies is to have more information on the medical devices that they are prescribing for their patients, more tools, more ways for them to present to a patient, resources that the patient can access why the physician is using this device and why this probably is going to be of benefit to the patient.

So I think it kind of gets back to this whole notion of really we’re starting to form a community now in medical devices where we’re not just in our separate [00:32:14] of the device manufacturer and physician and patient, but really we’re becoming this one big connected network here where patients are asking for much more information, “Hey, what is this thing implanted in my body?  And I want to share my experience with other patients and I want kind of a forum or I want a community here where I could talk about it.”  And physicians are saying, “Hey, listen, I’m almost an extension of your company here as your prescriber, so I need the tools to better help convey the benefits of this medical device to patients.  I want much more information.  I want to be able to go to your website.  I want mobile tools.  I want other ways for me to educate myself on your device, and then be able to educate my patients.”

So that was something that physicians were asking for last year and that they’re asking for this year as well, so I think it’s a great opportunity for medical device companies to evaluate, “How can I better partner with physicians and provide them information that they need to better educate themselves and their patients as to why they should be using my device and how it’s going to benefit them?”

Scott Nelson:    Gotcha, and you couldn’t have said it better.  I mean, I think on my notes I had one of the things that stood out from those data points was the unmet needs in regard to the sales service and support and engagement, the unmet needs in regard to what the physician is looking for, but you said it better, and I think that’s a huge—the common [00:33:39] would be that physicians maybe do not want [00:33:42] with too much messaging when in fact it’s maybe opposite.  They want more tools, more engagement that they can deliver to their patients, which is a very interesting point.  So, great stuff.

As we kind of conclude this interview, Asher, Infuse Medical, one of the things that I was surprised with that I was checking out at your website was that you’ve got some—very cool website, by the way—percentages there listed around the main page:  100% of Fortune 500 medical device companies and 75% of Fortune 1000 medical device companies do business with Infuse Medical.  Those are really impressive stats.  What are like one or two reasons why you have such a high percentage of those Fortune 500 and Fortune 1000 medical device companies?

Asher Cameron:  Well, thanks Scott, and we feel very privileged and I say that in all sincerity.  We feel very privileged to work with many of these major medical device companies.  We love what we do at Infuse Medical.  We love seeing the impact of these tools for our clients.  I think our ability to and the opportunity that we’ve had to work with such a large group of some of the leading medical device manufacturers has come from a couple of reasons.

First is that Infuse Medical is a comprehensive digital agency, and what that means is that we have strategically decided that we are going to be a one-stop shop for all of the needs of our medical device clients.  So we do everything from the front end creative content development all the way to back programming and systems integration, for example, integration with salesforce.com, SAP, etc., and we felt that that’s been a very effective model for medical device companies because many times the nature of their projects is such that they don’t want to have to go to a 3D animation vendor to do their 3D and a software company to do their programming and a creative agency to do all the creative content.  They want to be able to go to one agency that can do all that, and we’re pretty unique in that regard that we’re a comprehensive digital agency and have all of those technical as well as creative capabilities.

I think the second area that has been important for us that has made us unique as an agency and been a real benefit to our clients is that we are exclusively focused on the medical device industry, so our entire company is structured to serve medical device companies.  I think many times a lot of the agencies that some device companies may come across are focused on pharma, and so many times we’ll hear from device companies, “Gosh, I got this just crazy quote for an iPad application.  They said it was going to cost me 80,000 dollars to do this iPad application.”  And many times what we’ve found is that you’re typically talking with a firm that’s focused on the pharma area and they’re dealing with bigger budgets and there’s a higher cost structure there, but we provide a lot of value and really have structured ourselves to serve the unique needs of the medical device industry, which includes budget as well as scope and timeline.

We get a lot of requests for, “Oh gosh, six weeks away from now we need to able to get something out,” and we have the flexibility to do that.  So we feel very fortunate to have had an opportunity to work with all these companies, and again, I think it’s because of the fact that we’re a comprehensive digital agency and we’re focused exclusively on the medical device industry.

Scott Nelson:      Very good.  Yeah, and I can certainly testify to seeing some of those apps and tools that you’ve developed, and I think in fact Greg Benz with Boston Scientific, I believe, shared some examples, and correct me if I’m wrong but I think you helped build some of those tools.  They were very impressive to say the least.  And then, just even going on your website, and I encourage everyone to check it out, I mean, some of those videos that you have, especially regarding kind of the immersive interactive category as well as the technology visualization category, that’s really cool.  Personally, as I watched some of those videos, I was like, “Wow, you could really begin to see what you could do in terms of getting your message out to more physicians in a new and a different way.  That was very, very cool.”  So good stuff, Asher.

Last question I have for you is in regard to your background.  You mentioned earlier that you’ve spent—I think you mentioned earlier [00:38:02] this anyway, from 10-plus years as a medical device marketer, I’m looking at your LinkedIn profile now, from Hill Rom to Medtronic to Bard, etc., and now you made the jump back in 2011, I think, over to Infuse Medical.  I’m curious—I’m sure that gives you a unique take for sure—but why the jump from medical device marketer to Infuse Medical?

Asher Cameron:       Yeah, that’s a good question.  I’ve been fortunate to work for some of the best medical device companies in the world and really enjoyed my experience at all three of those.  One of the things that was enjoyable for me as a medical device marketer in those various product management and other roles is to have been able to work for a capital equipment medical device manufacturer, a vascular medical device manufacturer as well as an orthopedics for Medtronic Spine, and that’s been interesting to see, again, the differences across more kind of a disposables versus orthopedics versus capital equipment medical device sale, and the differences in marketing those different types of devices and working with the sales force.  And so that’s been an interesting perspective in coming to this role of Infuse Medical.

So, as I mentioned, I was a client of Infuse Medical’s [00:39:22] at Bard several years ago and had an opportunity to come and really help with the experience and background that I have, help Infuse Medical’s clients to translate their marketing objectives into the most effective visual tools, and I’ve found this as just an exciting opportunity to be able to continue—I feel like I’m a marketer at heart—to be involved in helping to translate strategy into the most effective tools, and to be able to [00:39:54] some of the leading medical device companies on an ongoing basis is just such so much fun for me and so much for our company.  And again, being able to see I think both sides of the table, having been a client and having been in a medical device marketing role, I feel like there’s a real connection or relationship that I can develop with clients that is helpful for them and helpful for us as a business in really creating a partnership.  And so I’ve really enjoyed doing that and I’m having a lot of fun.

Scott Nelson:      Sure.  Great stuff.  I can’t thank you enough, Asher, for coming on the program.  And for those listening that want to learn more and reach out to you or learn more about Infuse Medical, where’s the best place they can go?

Asher Cameron:  Yeah, so our website, infusemed.com, and my email address is asher@infusemed.com.  And I enjoy connecting with everyone in the industry, and so feel free to reach out to me if there are any questions or any other request for information.

Scott Nelson:    Gotcha.  Very good.  And for those listening, if you’ve hung on this long, hopefully, one, you’ve enjoyed a lot of this content because certainly Asher is an expert as you probably have experienced over the past 30 minutes or so, but for those listening, real quickly, if you want an easy way to consume these interviews, you can subscribe to the Medsider podcast for free.  Just go to iTunes, do a search for Medsider and that podcast will show up.  Click to subscribe for free.  That way all these new interviews will download to your iTunes account for free.  We’re also on Stitcher Radio now as well.  So you can either read the text interviews online or you can listen to the audio interviews when you’re out and about or have got some windshield time.

Asher, thanks again for doing this.  Really, really good information, and I’m certain that you’ll have some people reach out to you.  And hopefully, if you’re listening, reach out to Asher and tell him that you enjoyed the interview and reach out to him with further questions and ideas.  So, cool.  Thanks again, Asher.  Really appreciate you coming on.

Asher Cameron:       My pleasure, Scott.  It’s good to be with you.

Scott Nelson:    Alright.  And I’ll have you hold on the line.  And for everyone listening, thanks again for your attention, and until the next episode of Medsider.  Take care.

[End of Recording]


 

More About Asher Cameron

Medical Device Digital MarketingAsher Cameron is the VP of Account Services for Infuse Medical, a comprehensive digital agency focused exclusively on the medical device industry. Prior to joining Infuse Medical, Asher spent nearly 10 years in senior marketing roles at Hill-Rom, Medtronic, and C.R. Bard. Asher has led the development and launch of over $200 million in new medical devices and has managed over $600 million in medical device product lines. While at C.R. Bard, Asher launched several digital marketing initiatives involving mobile applications, interactive training modules, and web-based tools. Asher holds B.S. and MBA degrees from Brigham Young University.

How to Better Engage Your Physician Customers Through a Unique Learning Platform

How do you add value to your physician customers? How do you get doctors to “lean forward” in a conversation? Stop right now and take 10 seconds to think about those questions. If your answer is to offer lower pricing, you need to think again.

Let’s face the facts. Medical device sales and marketing is incredibly competitive. We’re operating in an age where it’s a dog fight just to get a few minutes of time with a physician. If you’re savvy enough to get those precious few minutes, what are you doing with them?

Are you earning the doctor’s attention? Will that physician even remember you by the end of the day?

What if you could deliver a resource that actually helps doctors learn faster, deeper, and more memorably? Something that would cause them to say, “I wish I had this in med school.” Do you think they would remember you then? Would that sort of resource help you to stand out versus your competition?

Better Engage PhysiciansWell, Dr. Doug Seifert has developed that resource. He’s the Founder, President, and CEO of Syandus. Healthcare companies partner with Syandus to offer doctors a faster, more memorable way to improve their clinical skills, using an active “learn by doing” approach. Dr. Seifert holds a PhD in biochemical engineering from Lehigh University and a BS in biology from Bucknell University. Prior to Syandus, he led large, complex projects at Merck Research Laboratories.

In this interview with Doug Seifert, we learn how the Syandus platform can help to change physician behavior through experiential promotional learning.

Here’s What You Will Learn

  • The challenges and problems Doug experienced that led to the creation of the Syandus platform.
  • How Doug has helped healthcare companies overcome their “technology allergies” in order to adopt the Syandus platform.
  • What does it take for physicians to change or re-evaluate their treatment approach?
  • How do experiential simulations work and why are they so much better?
  • How does the Syandus platform add value to physician interactions?
  • Why is Syandus extending their platform to patients and how did this come about?
  • Doug’s advice for ambitious medtech doers.
  • And much more!

This Is What You Can Do Next

1) You can listen to the interview with Doug Seifert right now:

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2) You can also download the mp3 file of the interview by clicking here.

3) Don’t forget – you can listen to this interview and all of the other Medsider interviews via iTunes.  And if you get a chance, leave us an honest rating and review on iTunes. It really helps out.

4) Read the following transcripts from my interview with Doug Seifert.  Also, feel free to download the transcripts by clicking here.

Read the Interview with Doug Seifert

Scott Nelson:    Hello, everyone.  Welcome to another edition of Medsider.  This is your host Scott Nelson.  For those of you who are listening to the show for the first or the second time, the goal is simple.  I bring on dynamic and interesting med tech and medical device stakeholders with the simple goal of learning as much as possible, to glean insights, to glean experiences, learn from successes and failures so we can take that knowledge and apply it to our own careers, our own little ecosystem, so that we can become better and become the linchpin with whatever aspect we’re in in terms of our job.  So today’s guest is Doug Seifert.  He is the President and CEO of Syandus.  So welcome to the show, Doug.  Appreciate you coming on.

Doug Seifert:    Oh, thank you very much, Scott.

Scott Nelson:    Okay.  So let’s first start with Syandus, and then we’ll learn a little bit about your background, and then we’ll dig in to the rest of the content of the interview.

Doug Seifert:    Sure.  Over the last 10 years at Syandus, I’ve been immersed in how to use and advance digital technology and engineering design to really support healthcare professionals and patients for improved outcomes.  I believe that my academic training as a PhD in Biochemical Engineering, BS in Biology, really has given me a different perspective and approach to the problem.

Before Syandus I was at Merck Research Labs for 12 years, ran their various departments in the bioprocessing/engineering area, and also launched several vaccines and the championed the design of their biologics pilot plant there, and it was there where I really realized the challenges of communicating complexity in life science and how some of the entertainment technologies available then could be really leveraged to enhance that and address problems.  So I decided to climb my scales in a completely different way and started Syandus, and that’s how Syandus began.

Scott Nelson:    Okay.  So Syandus 10 years ago, that’s like a hundred years in terms of the technology world.  So that’s quite a while ago, a lot of change, and I have to think going back to 10 years, what were some of the main challenges and problems that you saw in educating and teaching healthcare professionals back when you were working at Merck?

Doug Seifert:    Yeah.  I think we saw first the complexity of just life science and medicine in general, and I think the example would be that we often apply linear solutions to highly nonlinear problems.  It sounds like something an engineer would say, right? [Laughs]

Scott Nelson:    [Laughs]

Doug Seifert:    And so, you know, for example, a physician can go through one case study, a second case study, a third case study, and when that patient comes in their office it’s not going to look like any of those case studies, so that knowledge really isn’t translated into practice.  So then if you look at, you know, how can you apply some modern game technologies, which just have advanced even further over the past decade, and if you combine kind of the [00:03:11] Syandus game engine technology with systems engineering, it could allow us to approach a problem in a completely new way.

For example, in that case, instead of having these separate case studies, now imagine that we immerse the doctor in an environment, or a system if you will, where they can create what-if scenarios and create different types of patients and see how those different patient types create different types of patterns, and they can see the system as a whole rather than from a linear case study.

Scott Nelson:    Okay.  I like the description, linear versus nonlinear.  When you first said that I thought, “Oh no, you’re going to have to do a little explaining.  That whizzed by my head.”  But the example that you used of case study after case study after case study and then in comes a real patient, and a lot of times that learning is hard to apply to the real patient when just looking at text and pictures and images from various case studies, can you go into that in a little bit more detail?  Why do you think that’s so hard to translate, and why did you choose kind of the gaming environment in building out the platform at Syandus?

Doug Seifert:    Yeah.  So our ultimate is really to be able to support the healthcare professionals in their practice, and now patients, and we’ll talk about that hopefully a little further down the line.

Scott Nelson:    Mm-hmm.

Doug Seifert:    And what we [00:04:44] very powerful technology, it’s real-time interaction that it actually is responding in intelligence ways, and even as an entertainment, as a game, it’s responding in very intelligent ways to underlying algorithms.  So what we’re doing is we’re changing those algorithms from being a game and what we’ve developed is nothing like a game, but we’re applying that same technology in the underlying algorithms now are about the systems and the medical science.  And so it allows us to create these virtual experiences that they can learn virtually.

Because if you think back to even thousands of years ago, how do humans learn?  Well, the apprenticeship model, where you’re actually learning a craft alongside an expert.  And so what we do is we capture that knowledge of that expert in software, and then allow others to then virtually manipulate that world to see different outcomes, for example, a differential diagnosis.  You can [00:05:49] build hundreds of different patients that like they be a certain diagnosis versus something else, and so you can actually help them understand the patterns that would create that sort of diagnosis versus it being something else.  So that’s really the power of the technology and allowing them to create a virtual experience that really wasn’t available really before game technology, and it’s just been further advanced.

Scott Nelson:    Okay.  And so a virtual apprenticeship, is that maybe like a two-word description maybe of the goal that you’re trying to accomplish with Syandus?

Doug Seifert:    Exactly.  Exactly.  We’re using what we consider an intelligent simulation platform to really create that.  You know, virtual apprenticeship is a very good way of describing it.  It’s very similar to a virtual preceptorship, which is done in healthcare.  And so I think that’s a fair description.

Scott Nelson:    Okay.  And so when you started building out this virtual apprenticeship, this technology, the Syandus platform, that was nearly 10 years ago.  I’m sure it has evolved quite a bit.  I don’t necessarily want to get into systems engineering and whatnot but…

Doug Seifert:    [Laughs]

Scott Nelson:    But in healthcare I’ve heard the quote being used that people in healthcare are allergic to technology, and I’ve certainly seen that firsthand.  I’m sure you have.  Did you experience that early on when you were building out this platform, and maybe even still experience it today when the traditional approach to educating physicians, whether it’s med school or residency or fellowship, has been a certain way, and then trying to apply virtual sort of gaming methodology to that?  Did you see that?  Do you still see that today?

Doug Seifert:    Sure.  Yeah.  I think very much so.  I think at the beginning we were very far ahead of the curve and we really didn’t appreciate how far ahead we were at the beginning.

Scott Nelson:    Mm-hmm.

Doug Seifert:    And I think, fortunately, now that the industry is catching up very quickly, and I think it’s catching up in—there are a couple of different pieces to it.  When we first started out, one of the biggest barriers was technology.  If you were to think back 10 years ago what type of software, what type of hardware would you need to run a [00:08:06] technical game, it was more of high-end software or high-end hardware.  Now, virtually most computers have no problem—none of them really have any problem running playing games.  In fact, they’re now being translated onto tablets and even mobile devices.  So that’s all progressing and the technology piece is not a barrier at all.

So the second piece to that is then this whole concept of a different approach to learning and structure with a challenging upfront, and there are two ways that we address that.  First was we’ve received an initial grant from the National Science Foundation, an SBIR grant, and then we’ve received several awards since then.  Typically, these awards are very hard to obtain, less than 3% of the companies that go through the two-phase process for an SBIR award, and we’ve gone through that process three times.

And so that’s allowed us to build a very robust platform, and with that we found some early adapters within the pharmaceutical industry that were themselves ahead of the curve, and we’ve collaborated on building these early intelligence simulations and building up a platform.  And that’s really how we got started.

Scott Nelson:    Okay.  Excuse me for the pauses, I’m just jotting down notes as you speak here.  So the grant from the National Science Foundation, collaborating with pharmaceutical companies, and your customers now, are they primarily pharmaceutical companies that are leveraging your platform?

Doug Seifert:    It’s growing more diverse.  I mean, we started out with pharmaceutical companies being the typical sponsor, but we have other sponsors now, medical society sponsors, and we’re also speaking with managed care or from more the patient education side as well.

Scott Nelson:    Okay.  And you mentioned that you were able to collaborate with some pharmaceutical companies that were ahead of the curve themselves, and so obviously the interest, the passions, were aligned.  Can you pinpoint a few things that, speed up to five years down the road, and maybe even over the past five years when you’ve been able to bring on more healthcare clients, are there a few things that come to mind in terms of other companies catching up to this new wave of education, physician education?

Doug Seifert:    Yeah.  Yeah, I think that where we see some of the changes is really catching up to digital.

Scott Nelson:    Okay.

Doug Seifert:    And that’s really where we have the digital solution.  One of the challenges was, okay, we’ve built one of our intelligence simulations, great.

Scott Nelson:    Mm-hmm.

Doug Seifert:    How do we get it to the doctors?  How do we get it out there?  How do we use it?  And so what we ended up doing was building a delivery platform and then the back end.  So there are a few things they want.  One, how do we get it to doctors?  And we just built that delivery platform that allowed it to be distributed very easily electronically and integrated into all their marketing digital channels as well as nondigital channels.  We have a technology called a web code, which is a very simple four-digit code that you can attach to any nondigital, advertise it through…it could go to a sales rep, it could be incorporated into any written material, and they can go to [00:11:52] livemed.com and they can enter the code and they would be able to quickly download the resource.  So we have provided that sort of delivery mechanism.

And then the second thing is the analytics, the back end analytics to measure results.  So we now have the capability of measuring all the results of what’s happening and the educational experience so that it can be optimized over time.

Scott Nelson:    Okay, so that pharmaceutical company that maybe said, “You know, Doug, I don’t know if we’re necessarily ready for that,” well, fast forward five years, they see that you’ve made the content, in essence, or the platform available through a number of different ways and accessible from pretty much anywhere.  And then the second part would be that they can see the ROI on—maybe that’s not the best description but for lack of a better description I should say they can see the ROI on in partnering with the Syandus platform.

Doug Seifert:    Yes.  Mm-hmm.

Scott Nelson:    Is that right?  Okay.  Very good.  Okay, let’s jump in to that example, ABC Pharmaceutical Company or ABC Healthcare Company, whoever wants to leverage your platform.  What’s in it for them?  Their goal is to of course educate physicians about a certain therapy for a patient or a certain disease state, and they of course have products that probably meet that in the form of a therapy.  So they want more or less increased sales, increased market share, etc.  So what’s in it for that pharmaceutical company?

Doug Seifert:    Yeah, I think where we come in is when there’s complexity out there, and when they look at their brand and they look at, what are the barriers, the clinical barriers, to them adopting our therapy or adopting our device or adopting our test?  And when you identify those clinical barriers, they’re complex barriers, that really becomes the foundation of what we can help them provide, is to be able to provide intelligent simulation that would help the physician through pattern recognition recognize how to overcome that barrier, whether that barrier’s a differential diagnosis, how to incorporate a particular device into their treatment protocol, when to apply a certain diagnostic test.  We can provide that experience to help the physician learn virtually how to actually do that and to understand maybe the disease state, some of the new aspects of a disease state, which then allow them where this new device or the new therapy now integrate very well, and they just don’t understand those advances.

And so we can provide that level of making that complexity very simple to understand and communicate in a simple and exciting way.  And I think what that is is it provides valuable content and it allows the physician, when they see it they tend to lean forward because they see after their interacting with it that there is something underneath.  It’s responding in ways that do feel intelligent, that is providing additional information and layers of information.  And that’s really what intrigues physicians and gets them excited about it, and that’s really what drives a sustained interaction.  The fact is running on a game engine I think helps with upfront engagement, but a sustained engagement really comes from adding the underlying algorithms that create kind of the intelligence where they can interact and learn.

Scott Nelson:    Okay.  And for those of you who are kind of catching this mid-interview, I’m with Doug Seifert.  He’s the President and CEO of Syandus.  And in looking at your website, you’ve got a couple of different quotes from customers, one of them in particular, there are a couple that stand out but one of them I just got here on my notes, “These tools are helping us have longer, deeper conversations with our docs.”  I’m sure that’s from one of your customers that you captured that quote from…

Doug Seifert:    Mm-hmm.

Scott Nelson:    …but that’s interesting because that’s a challenge, whether it’s in terms of sales in marketing, whether you’re a pharmaceutical company, a med tech company, whether you’re health IT, medical device, etc., you’re trying to capture the attention of your physician customers and be able to engage in a conversation versus a pitch, a sales or marketing pitch.  And so do you have a couple of examples of how your platform actually enables healthcare companies to have that sort of engagement with physicians then?

Doug Seifert:    Yeah, we have probably several. [Laughs]

Scott Nelson:    [Laughs] Right.  Maybe one, you know.  I don’t want to make it too complicated, but maybe just one example that really rings true for those in the audience that are kind of wondering, “How can I leverage a platform like Syandus to experience that same sort of thing, the engaged physician that I’m looking for?”

Doug Seifert:    Yeah, I think of the things that it is is that when you look at a lot of what is out there it’s created on some of the same platforms and that are out there and available to everyone, so everything looks the same and kind of behaves the same way, and what we’re providing is very unique and different and I think it provides that deeper learning experience because the underlying technology is much deeper than, let’s say, comparing it to something that you have on a webpage or flash or something like that.  It’s much more deeper than that.

Scott Nelson:    Mm-hmm.

Doug Seifert:    And to give you an example, some examples, we can even go back to something, you know, where pharma has been battling with in the past has been how to get physicians to dinner meetings.

Scott Nelson:    Yeah.

Doug Seifert:    Now it’s very difficult to get physicians to dinner meetings, but back then it was, how do you get physicians to dinner meetings?  I mean, we’re just doing PowerPoint slides.

Scott Nelson:    Yeah.

Doug Seifert:    So they were starting to use our simulations in these meetings and it was just ramping up the audience attendance, and also the audience responses from the events were great.  We were talking to one speaker and he said, “I definitely had the audience and they were all really in tune with what I was presenting, and then I looked along the back and the whole wait staff of the restaurant,” wherever he was presenting, “was also in the room looking.  They were looking at [00:18:47] and what’s going on.  They’d never seen anything like this before.”

Scott Nelson:    Yeah.

Doug Seifert:    And so I think it does attract that attention, and that really led us to when we saw that the dinner meetings were dying down, and then you’re saying, “Well, now what are we doing?  Well, we’re putting these PowerPoint slide presentations on the web.  Now, how are they going to be any better there?” [Laughs]

Scott Nelson:    Yeah.

Doug Seifert:    And so what we did was we’ve created what we call simulation events, so you can actually go into a simulation and physicians, a speaker, can join a session, and physicians from all over the country, let’s say 10, could get together, join a session and be led through the session with the speaker.  It’s all using multiplayer game technology so it’s all being synchronized.  And now that you can actually experience going through with a speaker, at any point the speaker can then say, “Okay, now let’s release control.  I’m going to release control to you, let you go ahead and you look at the next patient or put the disease in this new state,” and let them now work on their own, ask questions.  And so now they really become like kind of the apprenticeship model where they can ask questions, and then at any point they can take control back and continue on.  So it can become a very intimate type of interaction between peers and it’s online, and so it creates a new way of interacting in the digital study.

Scott Nelson:    I love that example.  I mean, it’s that one extra piece that would allow for a lot of fodder, a lot of discussion, a lot of interest at that example dinner meeting that you just provided.  And I don’t want to overdo the quotes here but it brings me to the other one that I saw in your website as well, and it’s, “I wish we had this in med school.”  And I’m sure you probably get that reaction a lot, but in terms of the experience level of physicians, do you find that younger physicians, just out of residency for example, would get more value out of the Syandus platform or is it all over the map?  I mean, you’ve got both young and veteran docs that can appreciate and learn a thing or two that they may not have otherwise known.

Doug Seifert:    Yeah, I think that it’s true that a younger audience would get technology faster, but I think like the average gamer today is 35…[laughs]

Scott Nelson:    [Laughs]

Doug Seifert:    …so that [00:21:27] puts us yet in the middle.  I mean, I think you cover a pretty wide range, and I would also say that we did a lot of work with speaker training and I think the demographic there was more experienced leaders, and I think it adapted very well for that audience.  So I think it does go across all the different demographics as well.

Scott Nelson:    Okay.  Is this platform being used at conferences, at some major medical conferences?  I mean, there [00:22:07] aren’t so many anymore but is it actually being used for podium talks?

Doug Seifert:    It’s been used for podium talks.  It’s also been used on the event floor, you know, just showing on the big screen, and then they can be giving up what I mentioned for the web code cards to say, “Now you can have your own copy.”  And so it can be used that way, so it’s been used in both venues.

Scott Nelson:    Okay.  Very cool.  So before we transition to kind of the side topic, which is taking the Syandus platform and applying it to patients, is there anything else that we haven’t covered that you want to mention in regards to using the Syandus platform to help engage physicians at a whole new level if you’re a healthcare company?

Doug Seifert:    You know, I think it really comes down to, what we’re about is really using the technology and the platform to really create pattern recognition so that we can help physicians and patients to be able to recognize new things and integrate new things into their thinking through virtually interacting…

Scott Nelson:    Mm-hmm.

Doug Seifert:    …and that’s kind of why we’ve gone from the physician side and looking now on the patient side as well, because of the attributes of the platform I think work very well with patients, particularly in the patients with chronic diseases.

Scott Nelson:    Sure.  That provides a good segue, and that’s actually how we first came into contact, is I think I read a piece about your applying your platform to the patient community for further education.  Can you explain like maybe how that came to be and then what you expect to achieve from it?

Doug Seifert:    Yeah, I think it started with a lot of physicians communicating that they were using our simulations for patient education, even ones that weren’t designed that way, because they were saying that they were showing them the visuals, here’s what’s going on and here’s what I’m going to do and this is how I think I can help you, and it was providing that visual.  Instead of using words, it was providing a visual to help communicate what’s happening to the patient.  So that started down that thinking path.  And then we started to look at chronic diseases, and of course, where healthcare costs are going up, and a lot of it rests with chronic disease and rests with the patient.

Scott Nelson:    Mm-hmm.

Doug Seifert:    And you know, the healthcare providers are very busy and overwhelmed, and so to be able to move some of that, the knowledge and the communication, over into a software platform then helped to bridge that gap of when a physician needs to intervene and providing them with something more personalized than what they have now.  Today, a typical patient, they would go to the websites and they’re inundated with [laughs] tons of information…

Scott Nelson:    Oh yeah.  Yeah.

Doug Seifert:    …and it’s hard for them to know, “Is this for me?  Is this applicable to me?  Should I focus here?  Should I focus over there?”  It’s very difficult, and so what we do is we can provide a more personalized experience through a simulation platform, and that’s [00:25:45] really where we’re thinking.

Scott Nelson:    Yeah, I wholeheartedly agree because I think for most people the first thing they do is type in, “My physician says I have this,” insert chronic disease, and I type that into Google, and then taking the time to filter through the massive amount of information.  Most of it’s going to be not applicable at all.  But trying to filter through that and determine whether or not it applies or it doesn’t apply, what’s good information, what’s bad information, and then again most of the time it’s just text and studies and whatnot.  So it’s not animations, it’s not simulations, etc.

Doug Seifert:    Yeah.

Scott Nelson:    So I wholeheartedly agree.  And so you’re partnering with managed care companies then to sort of distribute this sort of educational content then?

Doug Seifert:    Yes, that’s our focus.  Mm-hmm.

Scott Nelson:    Okay, and so the managed care company would benefit how?

Doug Seifert:    Well, they’re the ones that are really incurring the cost.

Scott Nelson:    Mm-hmm.

Doug Seifert:    And so you look at any chronic disease and there is a huge expenditure for that managed care company to support the healthcare cost for those individuals, so anything we can do from the educational side to help that patient to be able to self-manage and understand how they can improve their health the better the outcomes, and of course that directly benefits the managed care companies.

Scott Nelson:    Yeah, it makes a ton of sense.  And so do you ever see—you know, I type in Syandus or some URL or some domain name and I can see a wide variety of chronic diseases and for each chronic disease there’s a Syandus simulation or animation that I can look through.  Do you ever see something like that then or the managed care company is going to sort of private label these simulations themselves?  How’s that going to work?

Doug Seifert:    I think we’re working through that now…

Scott Nelson:    Yeah.

Doug Seifert:    …how best to distribute.  I think each managed care company has its how best to reach their members and we’ll work with them to do that.

Scott Nelson:    Cool.  Cool.  Very good.  So, Doug, you’ve certainly been on a very interesting run over the past two years, or past 10 years I should say, with Syandus.  Any advice that you would have for other ambitious healthcare folks that are listening to this interview, maybe one or two big things that stand out in terms of advice that you’d like to give the audience?

Doug Seifert:    That’s a challenging question. [Laughs]

Scott Nelson:    [Laughs]

Doug Seifert:    Now, I think the thing that we’ve learned over the years is whether you’re speaking to healthcare professionals or patients, it’s focusing on what’s valuable to them, solving the problems that they face, and by solving the problems that they face I think it allows whatever you’re trying to reach them to help them understand.  Whether it’s a pharmaceutical drug or it’s a diagnostic test or device, just by providing that valuable education and then aligning that with your technology or your product, I think it really provides real benefit to the healthcare community and I think it does in the end increase sales and make a difference.

Scott Nelson:    Yeah.  Yeah.  No doubt.  And I think you mentioned earlier the idea of getting physicians to lean forward instead of back, and I think anyone, whether it’s pharma, med tech, med device, etc., can really appreciate that, and the goal would be to get your physician to lean forward as you mentioned.  And one of the few ways that we have left to do that is through really good valuable education where we can actually engage that physician in a clinical conversation, and granted I’m no expert when it comes to Syandus, but being able to use your unique platform to accomplish that would be invaluable.  So cool stuff, Doug.  I really appreciate you coming on.  For those listening that want to learn more about Syandus, where would you have them go?

Doug Seifert:    They can go to www.syandus.com and check us out.  We are going to be updating our website because a lot’s been going on. [Laughs]

Scott Nelson:    [Laughs]

Doug Seifert:    So we’re going to be updating it shortly, but that’s a good starting point.

Scott Nelson:    Alright.  Very good.  www.syandus.com.  That’s S-Y-A-N-D-U-S dot com.  Very good.  As I mentioned before, Doug, really appreciate you coming on and teaching us a little bit more about how to best educate our physician customers through your unique platform.  So, really appreciate it.

Doug Seifert:    Well, thank you very much.

Scott Nelson:    Alright, I’ll have you hold on the line there, Doug, but for those listening, thanks again for joining us.  And again, a good way to consume these Medsider interviews is through iTunes.  Just do an iTunes search for Medsider.  The podcast will pop up.  You can subscribe for free, no charge at all, and that way all the new interviews will automatically download to your iTunes account for free.  Whether you use an iPhone, an iPad, iPod, etc., whatever device you use, those interviews will automatically sync and download for free.  So it’s a good way to consume the content if you’re driving, if you’re working out, if you’re taking a jog, etc.

[End of Recording]


 

Can This Fix the Healthcare System?

Referral communication within the healthcare setting is often one-way, damn near impossible to track, and sometimes does not include the required patient information. Don’t believe me? Check out these stats:

  • 25% of primary care providers (PCP’s) do not receive timely information from specialists after the patient referral is made.
  • 68% of specialists receive no information from PCP’s prior to patient referral visits.
  • The end result: 60% of referrals go unscheduled and 25% of scheduled referral appointments are missed.

So what can be done to fix this broken system?

Fix Broken Healthcare SystemEnter Jonathan Govette, the founder of ReferralMD, a patient referral management application that is designed to become the replacement for the fax machine and allow millions of doctors the ability to track referrals without digging through file cabinets or using Microsoft Excel.

In this interview with Jonathan Govette, we learn why the healthcare system is broken and what can be done to fix it.

Here’s What You Will Learn

  • The personal story of why Jonathan built the ReferralMD platform.
  • What exactly is ReferralMD and why did the major EMR systems miss out on this important piece of the healthcare puzzle?
  • 3 reasons why the healthcare referral system is broken. Discussion points include: 1) Communication gap, 2) Paper vs. patient, and 3) HIPPA violations.
  • 4 simple and effective ways for medical practices to win more patients.
  • Why the analytics component of ReferralMD is so important.
  • Jonathan’s lasting advice for ambitious medtech doers: Update, update, update!
  • And much more!

This Is What You Can Do Next

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4) Read the following transcripts from my interview with Jonathan Govette.  Also, feel free to download the transcripts by clicking here.

Read the Interview with Jonathan Govette

Scott Nelson:       Hello, everyone.  Welcome to another episode of Medsider.  This is your host, Scott Nelson, and on today’s program we have Jonathan Govette, who is the founder of ReferralMD.  Welcome to the program, Jonathan.  Really appreciate you coming on.

Jonathan Govette:    You’re most welcome.  Thank you.

Scott Nelson:       Alright.  So, ReferralMD, let’s start out with the story of why you decided to go ahead and start this business.

Jonathan Govette:    Definitely.  Unfortunately, when I was very little, my mom was hit, right actually before I was born, and she had many injuries and throughout the years she’s been having to attend multiple physician meetings with different specialists on almost a weekly basis.  It’s gotten worse now [00:00:43] with her advent of having Parkinson’s over the last 10 years and with her health declining.  I’ve seen throughout my 30-plus years growing up many referral slips on the fridge, on the table, and I’ve always wondered, you know, why are we still using paper?

And unfortunately when the fax machine I think was invented around the ‘60s sometime, we’re still using that technology to communicate, and the last couple of years I finally had the aptitude to understand why is our healthcare system still using paper to relay critical [00:01:14] health to other specialists, and I’ve never really had a good answer why.  I’ve asked hundreds of different doctors why they still use it and their only answer really is because it’s the only thing there.

Luckily, the last couple of years I’ve done some research and found that there is a viable product there, a lot of people want to purchase it, so I decided, “You know what?  I’m going to form a team.”  I wanted to do something about it, number one, to help my mom, and also all the other patients I’ve talked to in the past that are in my life and affected myself personally, and I was fortunate enough to have the skill sets and also the team behind me now to actually design the application that’s going to change the world, how we communicate information.

Scott Nelson:       Okay, and before you give us that brief overview of this application, this platform that you’ve developed, let’s go back to your mom.  So you saw her take a primary care physician and he or she would refer to a specialist, and then you saw the lack of communication both to and from that referring specialist, then she would be referred on to another specialist, etc., etc., trying to deal with some of these chronic illnesses that she developed from that accident and then Parkinson’s.  So you saw that issue, and so what were some of the big things that you saw?  You mentioned the fact that just paper, was that what stood out the most is just why are we using paper in this day and age?

Jonathan Govette:    Exactly.  It was an amazing amount of paperwork that I’ve seen her having to actually courier.  She actually became a courier to that paperwork.  They’d actually hand her a slip, and unfortunately my mom, bless her heart, she forgets a lot, and she’ll end up leaving that referral slip somewhere and miss her appointment, and then unfortunately the other receiving party never received it because she was actually responsible for that.  And that prolonged her meetings, she wouldn’t have the appointment maybe for another three months, and unfortunately I’ve talked to many other patients like that.  They always seem to either lose it or, let’s say, were given an x-ray or MRI to courier, they lose that as well or they have to go back and pick it up.  And unfortunately, my mom, she’s an amazing woman but she is not the brightest of the bunch sometimes. [Laughs]

Scott Nelson:       Sure.

Jonathan Govette:    She forgets a lot, unfortunately, with Parkinson’s affecting her health that way as well.

Scott Nelson:       Right.

Jonathan Govette:    And she is unfortunately unable to maintain, and my dad, unfortunately, he’s a farmer, so he’s always on the farm pretty much from five in the morning till eight o’clock at night, and for him to have to remember all this as well, it makes it very hard.

Scott Nelson:       Sure.

Jonathan Govette:    And so seeing that process of her losing things all the time or just not really getting the best care, it just affected me to a point where I wanted to finally do something about it.  To give you a quick background on myself, I built software before, websites, for other companies, and I decided it’s finally time for me to do something not only for my mom but everybody else as well.

Scott Nelson:       Yeah.  Yeah, and to your mom’s point, and you’ve probably talked to a lot more patients than I have as you sort of built your system around this really big problem, but correct me if I’m wrong, your mom is probably not alone in the fact that a lot of these patients are either sick or it’s just they’ve got a lot going on emotionally and even to simply ask them to remember an appointment maybe complicated, with all the other things that’s affecting their life, you know, with a certain disease or a certain sickness.  So it’s a big problem that to your point seems like it’s been overlooked for a long time now.

And from a personal standpoint, even like a basic visit to like a dermatologist or something like that, I remember even taking my daughter to a dermatologist recently where the next appointment that we had scheduled for her, you know, you get the old card, the little card, and then you have to manually enter that information into your calendar and whatnot, and I’m thinking to myself, even before we met and talked, I’m thinking that’d be nice if they just sent you an email like with one click just sort of import that to my calendar without having to like remember to type it in.  And that’s so basic, you know…

Jonathan Govette:    Exactly.

Scott Nelson:       …and I’m not the one that’s dealing with the sickness or disease.  But good stuff.  So why don’t you give us a brief overview of ReferralMD, the system that you’ve built, and then we’ll jump into some of the other reasons why the healthcare referral system is broken and other ways to maybe, in your experience, the other ways that physicians can be better at marketing their practice and sort of enhancing the referral process.  So let’s start with a brief overview of ReferralMD.

Jonathan Govette:    Definitely.  The goal was—and anybody in the healthcare industry understands that most of the applications that are out on the market today are very complex.  If you work within the hospital system or even in practice management, you understand that companies like Cerner, Meditech, Epic, while the programs are great in a sense that they track information for you, they’re very complicated.  They usually take anywhere from hundreds of thousands of dollars to multimillion-dollar installations.  One of the partners, [00:06:08] Community Hospital, just spent 75 million dollars installing Epic and it does everything under the sun except for referrals.  It does not communicate ambulatory referrals to other practices, and neither does anything else on the market today with other third-party applications.

So we decided we want to make something that’s simple.  It does one thing very well.  It resembles emails, an email system you’re probably familiar with, maybe like a Gmail or Yahoo or AOL.  So you log in, you see an inbox and an outbox, and that’s pretty much it, along with some reporting that helps you determine who your best partners or colleagues are.  And that’s it.  We don’t want to have 10 or 20 features, and the reason why [00:06:48] is I always believed that as you add more features to your software, number one, your users don’t like it, number two, you actually dilute your market space for sales, because as you add more features less and less people want to buy it because they already have something that does something similar.

So when somebody first logs into our system, they’ll see a lot of white space, very easy to use, literally takes a few minutes to set up and you’re done.

Scott Nelson:       Mm-hmm.

Jonathan Govette:    No cost to set up versus the other systems on the market.  And obviously the goal is to get in the [00:07:17] system’s center for all of 30 seconds, receive on the other end, both parties, both you and your specialist can see instantly when the referral was read.  Any notes or annotations, any attachments such as x-rays, are all allowed to be seen instantly versus having to go back and forth to a file cabinet or pull it out of the EMR that you can’t find because you have to manually input it.

Scott Nelson:       Gotcha.

Jonathan Govette:    The current process, as you know and most people do know, it’s all fax-based or triplicate form, and obviously the time to maintain that system, I’ve done some surveys with a lot of different practitioners and they spend anywhere from 15 minutes per referral up to sometimes an hour or more per referral, maintaining it, filing it, faxing on the phone, hold time, etc.  If you equate all that time it takes to go through that entire process to actually get a patient through the system and actually have the appointment, it’s a very long time, and with our system you can reduce [00:08:15] down the total minutes.

Scott Nelson:       And did you say an hour per referral?

Jonathan Govette:    Exactly.

Scott Nelson:       Yeah.

Jonathan Govette:    Except for more complicated referrals, which have a lot of more fields.  You can consider the fact that they have to wait on hold for authorizations, for example, for insurance authorizations or for referrals, it takes a long time.  So in our system it not only does the referral but also does authorizations.

Scott Nelson:       Okay.

Jonathan Govette:    It’s one of the same things, pretty much.

Scott Nelson:       Okay.  And I want to circle back around to this later on in the interview…

Jonathan Govette:    Okay.

Scott Nelson:       …but you have a really cool little cost per referral calculator on your website that I would encourage everyone to go check out because it’s really interesting because it kind of shows you, if you’re losing out on X number of referrals per month, this is what that equates to financially in terms of dollars lost, but it’s really cool.  So, in essence, ReferralMD is a really simple exchange platform from the referring physician to the receiving physician to exchange information that’s HIPAA-compliant and all that stuff.  It’s basically a really simple way with some analytics built in where you can track how many patients are going back and forth over a certain period of time, etc.

Jonathan Govette:    Exactly.  One of the things that we were asked to build from a couple of our companies, and we actually integrated it, we’re actually building it out now, is a way to actually track the time, which this is completely new for anybody in the market, the time it takes to actually, when you receive the referral to when the appointment was made to when the actual appointment was held, you can actually track the actual down to the minute.  So if you have a partner that you’re working with that, let’s say, five cardiologists you send referrals to, and you want to know which one is going to be the most efficient with your patient.  You can actually know down to the minute which ones are actually receiving your referrals and actually handling that referral quickly, and that’s done on every single referral and also averages it as well.  So if you have a hospital you send referrals to, you can have an average time to completion for that hospital so you know whether or not that hospital is better or more efficient than the other hospital down the street, and that’s…

Scott Nelson:       So it’s almost a built-in accountability system then?

Jonathan Govette:    It really is.  Accountability.  That’s one metric that is missing from healthcare today, is accountability.  Now you can actually as a doctor know, number one, how accountable am I as a practice?  You can actually track your staff efficiency, but also your partners that you work with.

Scott Nelson:       Okay.  Okay.  Very Cool.  Real quick before we move on to some of these other issues regarding kind of the broken referral healthcare system, or the broken referral system within today’s healthcare environment, but you mentioned some other large EMR players like Epic, for example.  Was this just a big miss on their part or is their system built more for sort of the enterprise hospital-based environment where you’re basically tracking patient data versus kind of the referral side?  It just seems like a big miss to me, I guess, for lack of a better description.

Jonathan Govette:    How it all came about, obviously with the HITECH Act in 2009 and with Obama giving away X amount of dollars for Medicare reimbursement, etc., the meaningful use part I really didn’t include anything about referrals, so a massive 1400-plus EMRs popped out of nowhere, relatively speaking, and built platforms that emulated what reimbursements they could receive or their customers could receive.  So they missed that piece.  Number one, they built a system for just tracking only, meaning once we manually input information in the system and it holds it as archives.  That’s really all it was about.

They missed the point and everybody missed the point of communication because, number one, they weren’t getting paid for it by the way so they left it out, number two, it’s very hard to build as well.  Building a tool that is social in nature that actually is HIPAA-compliant and you could share information is a lot more complex than just a standard database because there are a lot more things you have to build into the system to make it work properly.  So those are two reasons why they left it out, and we decided that we wanted to build the first [00:12:26] that could do that, that actually can send information back and forth and actually track the metrics of efficiency and accountability.

And that’s really the difference between us and all the other EMRs on the market.  We’re not competing against them.  We’re actually a collaboration tool with them, so we complement what they already have in your system.  So if you’re using Epic or Cerner, you can still use our software because all we’re doing is replacing your fax machine or your triplicate forms.

Scott Nelson:       Right.  Yeah.

Jonathan Govette:    So that’s the benefit of us.  We can actually still sell or offer our services to everyone in the country and the world no matter what system you’re on.

Scott Nelson:       Gotcha.  Yeah, and even beyond replacing the fax machine, replacing email in some situations. I think one of your recent blog posts highlighted that where you had I think maybe a friend or something that one of the, whether it was an admin person or secretary within that primary physician’s office, asked him to email some very private information, which was interesting.  So I guess in some cases it’s replacing email as well. [Laughs]

Jonathan Govette:    Well, as everybody knows, yeah, email is actually not HIPAA-compliant.

Scott Nelson:       Yeah.

Jonathan Govette:    It’s actually against the law.  You can actually be fined relatively heavily for doing that.  And I’ve done a lot of surveys in the past and this one just shot up at us about a week and a half ago, two weeks ago.  One of our friends actually went to the doctor and wanted to get a stress test done.  The staff didn’t have their corporate email, which, number one, is still bad, but so she did give away her Gmail account.  And so our friend just wanted to get the appointment done.  He was already stressed out, hence the test.  He sent over the information.  He knew it was wrong but he just wanted to get the appointment really quickly.  So he actually sent his private information to her Gmail account, which will be there probably forever, even if she leaves or quits.  And it was shocking to me, but it happens all the time.  So we’re going to leave you with that for the users so they know that everything is going to be safe and HIPAA-secure.

Scott Nelson:       Gotcha.  Cool.  Cool.  So we’ll circle back around to maybe a little bit more about what you’re doing at ReferralMD, but let’s tackle some of these issues in regards to why the healthcare referral system is broken, and you mentioned some of them already and you’ve kind of discussed them a little bit, especially in regards to why you built out the ReferralMD platform, but the big communication gap is huge as we kind of briefly talked about.  But let me just read some stats.  I think I actually got these from your website, but 60% to 70% of referrals go unscheduled, 25% of scheduled appointments are missed, 25% of primary care physicians do not receive timely information from specialists post-referral, the average spent per referral is roughly 40 dollars.  I mean, these are shocking stats.  It represents a huge communication gap, and so that’s obviously one reason why the healthcare referral system is broken, right?

Jonathan Govette:    Exactly.  One of our blog posts mentioned about [00:15:24] different statistics that were relatively astonishing.  After doing some research over the last year, so I’ve talked to [00:15:32] Tejal Gandhi.  She works alongside of partners.org in Boston.  She also works alongside [00:15:39] Harvard Med and a few other large medical practices there.  She’s been doing research for over 10 years or referrals and how electronic referrals could help the industry.  Unfortunately, with the bandwidth problems of before 2000, we really didn’t have the infrastructure in place or even a cloud system built that could handle large files, etc.  And just until recently, within the last couple of years, we’ve been fortunate enough to have companies such as Comcast, AT&T build out their fiber throughout the country, so now people then have 25-meg-plus connections in their offices when five years ago we didn’t have that.  So that’s why I think it’s going to be a great time for healthcare to finally fix some of these problems that were plaguing us 10 years ago.

Scott Nelson:       Yeah.

Jonathan Govette:    Or actually for the last century, really.

Scott Nelson:       Yeah.  And when looking at some of these stats, it definitely affects all parties, the patient, the referring provider, and then also the specialist provider, I guess, in that sense.  It affects everyone.  But in your discussions with referring physicians, is that a big issue with referring physicians when they’re not receiving timely information back about their patients from specialists…?

Jonathan Govette:    It definitely is, not only just as a doctor you want to take care of your patient…

Scott Nelson:       Right.

Jonathan Govette:    I mean, really that’s their job.  If your patients aren’t being taken care of, number one, they’re probably not going to refer business back to you with their families, right?

Scott Nelson:       Mm-hmm.

Jonathan Govette:    So you lose revenue stream there.  But more so, that’s your liability risk.  If you don’t follow through and actually know that your specialists that you sent your patient to is doing the job, you can actually be held liable for that problem, and actually [00:17:23] with malpractice suits coming by every day growing and growing.

Scott Nelson:       Mm-hmm.

Jonathan Govette:    So those two issues obviously are very important to a practice, and they want to minimize those risks obviously.  So knowing that their patient is taken care of, they’re happy, it’s great, but you also want to save your wallet too. [Laughs]

Scott Nelson:       Yeah.  Yeah, no doubt.  And on the specialist’s side, the specialist that’s receiving the referral, they’re obviously concerned about, one, getting more referrals, but two, getting more referrals in an efficient way.  And I can speak from experience, a lot of specialist physicians struggle with that, like how do we effectively and efficiently manage incoming referrals?  It’s a big issue.

Jonathan Govette:    Exactly.  No, it’s massive.  We’re actually working with a physical therapy office here in California, they have 25 locations, and I’m working with one of their marketing reps that’s responsible for driving referrals to all those locations.  Right now there’s really no way for them to track his work.  So he’s out talking to 10, 20 people a day.  They have no clue where the referrals are coming from, if they’re from him or they’re from somewhere else.  So with our system, it’ll easily add him into the system that can manage that relationship between himself and all the other practices that bring business to them.

One thing we haven’t talked about though, we’re actually going to be building a platform with a social nature, or a social platform as well.  So if I’m a cardiologist in town and I’m looking for people to refer business to me, I can actually use our system to log in and see all the different types of general practitioners that are in my area and actually connect to them.

Scott Nelson:       Mm-hmm.

Jonathan Govette:    And then send a little welcome note, say, “Hey, I saw you’re using our system as well.  We’d like to build a relationship and let’s communicate,” and actually build a way for them to form relationships online.  Now, obviously, you still want to go out to lunch and meet them in person to make sure who they are, but our system actually can connect you to people that you might not know about.

Scott Nelson:       Sure.

Jonathan Govette:    And it’s all done within our system.  So you can actually build relationships, manage them and track them all within one portal.

Scott Nelson:       Okay.  Okay, cool.  So in that situation, that cardiologist in the example you just mentioned, so are you giving him, are you scraping data on the PCPs in a certain area and almost basically pulling up a list where he can automatically kind of see the PCPs in his area and say, “Oh, I know this group,” or “I know that group,” “I don’t know that group,” etc.?

Jonathan Govette:    It’s really based on a couple of different factors, what type of specialty they are, what gender, what insurance companies  they accept, and multiple other factors as well.  So the benefit is, for example, if I’m a primary care and I have a young lady and she needs some help managing a certain type of disease and she wants to be sent to a specialist that handles that disease plus is a woman and within let’s say 5 miles of her zip code…

Scott Nelson:       Oh, okay.

Jonathan Govette:    …we can actually pull up a strategic search and pinpoint exactly who that person is and send them there without having to randomly Google and hope they find something.

Scott Nelson:       Okay.

Jonathan Govette:    So our system actually dives a lot deeper than what a standard search can offer.

Scott Nelson:       Sure.  Okay.  It’s actually like an effective search with filters, or I should a search with effective filters.

Jonathan Govette:    Exactly.

Scott Nelson:       That’s cool.  That’s cool.  So communication gap is one big issue that your platform is helping to solve.  What about the hard paper versus the digital sort of point of this, the kind of the paper versus patient?  Again, we spoke about this in a little bit more detail, but can you sort of expand on that issue?

Jonathan Govette:    Definitely.  Most people know the EMRs are wonderful.  I mean, as we talked about before, they are fully digital except the one piece that matters to most people, especially the patient, is the referral process.  That is still left out.  That’s still being done with paper.  And there are some actually pretty astonishing stats that go along with it.  Now, these are all America or USA stats.

Scott Nelson:       Mm-hmm.

Jonathan Govette:    Right now there are 7000 people dying every year from just sloppy handwriting.  So this is both on prescriptions, referrals etc.  If you read your own referral note, they’re hard to read. [Laughs]

Scott Nelson:       Right. [Laughs]

Jonathan Govette:    I don’t understand most doctors’ handwriting and I really don’t understand my own either, so that’s why I make sure I type everything out.  Of course, with our system, we’ll fix that.  Even worse is, 3 out of 10 test results, so lab orders, etc. that are done with paper now, have to be reordered because they can’t find them afterwards.

Scott Nelson:       Wow.

Jonathan Govette:    So imagine if you’re a patient, you go in to a doctor and you have to reorder your tests that was maybe not comfortable or maybe a little private, you probably don’t want to have to go back and do it again but 3 out of 10 have to, and that’s terrible.

Scott Nelson:       Wow.  That’s a huge cost to the system too.  Especially in our day and age, when healthcare cost is probably the biggest issue on most people’s minds, that’s a big one, 3 out of every 10 tests are reordered because results can’t be found.

Jonathan Govette:    It’s shocking.  One-third of our cost in America could be reduced instantly if we actually transitioned to a fully digital system.

Scott Nelson:       Yeah.

Jonathan Govette:    And it’s pretty astounding.  Now, even worse, this is a pretty astonishing stat – almost 200,000 people die every year from preventable medical errors, and mostly, 86% of those, are administrative.  So we’re talking about referral slips and a lot of other issues, but mainly referrals. The referrals actually communicate most of the information today.

Scott Nelson:       Wow.

Jonathan Govette:    Very few patients call on their own to set appointments because they want to go through their primary care first to validate which doctor they should go to.  Most people don’t use software applications like, I mean I hate saying this, but ZocDoc and a few others that are out today, because those are all patient-centric, and as you know with Google Health and a few others that pulled out of the marketplace, patient-centric software unfortunately don’t work these days because most people either aren’t skilled enough to understand what their health requirements are or they trust their doctor enough they want to actually go to them first, which that’s what I do.  When I go to a doctor, I talk to my primary care and I say, “What do you recommend me doing with this?”

Scott Nelson:       Right.

Jonathan Govette:    I don’t Google and try to find out my answers myself.  I just don’t.

Scott Nelson:       Gotcha.

Jonathan Govette:    You know, I don’t trust myself enough.  I’m not a doctor and I don’t want to risk my life on Google.  I just can’t. [Laughs]

Scott Nelson:       Yeah.  Yeah.  No, that’s understandable.  And I think actually I recall reading a piece about one of the reasons why Google Health never really took off or they exited.  I can’t remember exactly the whole premise of the article, but one thing that stands out to me is they didn’t involve the physicians enough.

Jonathan Govette:    Mm-hmm.

Scott Nelson:       They made it too patient-centric, as you just mentioned.  So that’s interesting that you say that in regards to kind of this whole topic of paper versus patient in terms of one of the reasons why the healthcare referral system is broken.

Jonathan Govette:    Definitely.  It’s a huge problem, obviously, and that’s what we’re looking forward to fixing.

Scott Nelson:       Yeah.  Gotcha.  So let’s move on to the third point, HIPAA violations.  And again, another thing that we’ve lightly touched on before, but let’s discuss that in a little bit more detail, the idea of HIPAA violations.

Jonathan Govette:    Definitely.  There is actually a website and you can visit our website at getreferralmd.com, and you can go to our blog and you can find this information or you can just email me directly if you’d like to at jonathan@getreferralmd.com and I’ll provide you with the link.

Scott Nelson:       Mm-hmm.

Jonathan Govette:    Basically, the US government actually has a website that allows you to see all the different types of violations that are real time, meaning that happens in the market that any kind of breach or theft that affects more than 500 patients is posted on this link.  So it’s called the Wall of Shame.  We actually have a blog article that I’ve written actually just recently.  You can go to our most recent trending on ReferralMD blogs and it’s actually the fourth one down and it’s titled Wall of Shame.

Scott Nelson:       [Laughs]

Jonathan Govette:    Go ahead and read that, and it actually gives you a link directly to that article.  It’s pretty astounding.  I’m not going to mention any names but there are very large organizations that are on that list that you will know, and they affect millions of patients every year.  These people unfortunately think of the Oceanesque-type of hacking where somebody goes in through a pipe and steals the hard drives out of the server.  Well, that doesn’t happen.  It’s actually physical theft.  It’s actually one of the largest breaches available.

So, for example, physical theft of paper, files, physical theft of hard drives or actual laptops, are actually the top two of thefts.  So, for example, one of the recent thefts was a laptop was left in a van and the van was stolen, the laptop was stolen, and it had I think around one million people’s information on that hard drive.  Well, with a system like us, with ReferralMD, we don’t store your information on a hard drive.  So if you’re on your iPad or you’re on your computer, your safety is once you log out [00:26:19] be gone.  Nothing’s there.

Scott Nelson:       Yeah.

Jonathan Govette:    So you don’t have to worry about that.  Now, most EMRs are server-based and actually in-house.  There are some issues there.  Ours is cloud-based, which means we actually store information somewhere that’s completely secure, that’s armed guards 24 hours a day, and you don’t have to worry about that.

Scott Nelson:       Right.

Jonathan Govette:    So I always like to tell people, if you’re still imagining your paper systems or your [00:26:41] systems with files where you can actually back up on DVD and you’re trying to maintain that, please update to a modern system that allows you to back up automatically because you don’t want to lose your information.  I’ve talked to hundreds of doctors and a lot of them have been hacked.  And hack is a very general term, by the way.  They use that term and it still means theft.  So if somebody stole a paper file, it would still be called hacking.  So you want to be careful.  People always think, “Well, somebody’s going to steal my information online.”  They’re really not unless the systems that are in place are 10 years old, which unfortunately as you’ve probably heard the last couple of years, such as Sony and a few others, they built their databases very poorly.

Scott Nelson:       Mm-hmm.

Jonathan Govette:    We use all the modern encryptions.  We use military-grade 256-bit encryption methods.  Sony didn’t do that, and you consider they’re a billion-dollar company and should have, well now they are. [Laughs]

Scott Nelson:       Right.  Yeah, no kidding.

Jonathan Govette:    They’re changing that.

Scott Nelson:       Yeah.  Gotcha.

Jonathan Govette:    So that’s the biggest thing.  If you are going to talk to IP staff or you have a person down the street maintaining your security systems, you better ask them some important questions about that and read that article about security breaches.  And by all means, please update your browsers from IE6. [Laughs]

Scott Nelson:       [Laughs] Right.

Jonathan Govette:    It’s 11  years old.  Fire your IT staff if they’re still letting you use it. [Laughs]

Scott Nelson:       I would like to see stats on how many physician offices are still using IE6 because it’s probably, maybe not surprisingly, that those of us in healthcare, it’s probably pretty high. [Laughs]

Jonathan Govette:    One of the largest banks in the country, Citibank, is still on 5.5.

Scott Nelson:       Oh wow.

Jonathan Govette:    Which is over 12-1/2, 13 years old.

Scott Nelson:       That’s embarrassing.  Wow…

Jonathan Govette:    It’s scary, isn’t it?

Scott Nelson:       Oh yeah.

Jonathan Govette:    And they were hacked actually recently, too. [Laughs]

Scott Nelson:       Yeah.  Yeah, go figure.  Go figure.  But to draw this back to sort of that third point in HIPAA violations, I mean, I think as a society we’ve almost sort of gotten numb to the idea of HIPAA.  It seems like when you’re talking about any sort of technology within healthcare that’s almost always the first question that gets brought up, is it HIPAA-compliant?  Is it HIPAA-compliant?  I would venture to say 95% of people don’t even know what really HIPAA is.  It’s just sort of a buzz phrase.

Jonathan Govette:    Exactly.

Scott Nelson:       But even something as basic as the example you mentioned before, even with your mom, for example, taking triplicate forms, if those forms are left anywhere, if they’re accidentally dropped, etc., even if you relate it to your own self, if my name’s on a form to go see a urologist, for example, and someone captures that—well you can even draw an example as basic as that.  If someone were to steal that, if I left that behind, that’s sort of some revealing information.

Jonathan Govette:    Exactly.

Scott Nelson:       And maybe you don’t care, maybe you do, but why not just eliminate the paper altogether and send in the information through a secure platform?  It seems to make a ton of sense, and I’m sure you’ve realized this.  The more you’re entrenched in this space, it’s like, why are so many physician practices beyond the times and why aren’t patients calling for a more modern version of the transfer of this information?  No, that’s good stuff.  I know we’re kind of running short on time a little bit…

Jonathan Govette:    No problem.

Scott Nelson:       …but did you want to add anything else to that third point about HIPAA violations before we kind of move on to the next topic?

Jonathan Govette:    We’ve covered most of it, I think.  I mean, I just want to cover a couple of quick points.  The US Department of Health and Human Services, if you want to Google that and type in “breaches,” and you should be able to see all the information we’ve been talking about today.  It’s actually pretty astonishing.  If you’ve never been there, I’d recommend going in to look at it.  It actually outlines exactly what types of thefts happened to each type of organization.  So you can learn that everybody’s susceptible.  Everybody can be held at fault.  And we’re not just talking about simple [00:30:28] slaps on the wrists either.  Most practices, at least the small ones, could actually go out of business with some of these types of malpractice suits that go out [00:30:37], excuse me, of breaches.  You can lose everything, and you don’t want to, so protect yourself. [00:30:44] talk about [00:30:35] on that.  Second, don’t use email.  If you’re still using email to send information, please stop. [Laughs]

Scott Nelson:       [Laughs] Simple as that.

Jonathan Govette:    Help yourself out.  Upgrade to something that’s a little better, that’s actually less expensive, and you can help yourself and actually make your staff’s and your life a lot easier.

Scott Nelson:       Mm-hmm.  Cool.  Good stuff.  Let’s talk real briefly, I mean this could be a whole separate interview, but I wanted to touch on this briefly because you’re talking with physicians both on the referring side and the receiving side on a daily basis.

Jonathan Govette:    Mm-hmm.

Scott Nelson:       This is what you do, is you develop a platform to help that process.  So I want to get your take, and again, maybe condense this into maybe a couple of minutes, 4 or 5 minutes, something like that, but are there some things that stand out to you in regards to physician marketing? I mean, obviously, the referral component is a big part of that, but are there a couple of other tips that you can give to those folks that are listening in on this interview that really stand out, that you’ve seen to be really effective in regards to winning more patients, increasing referrals, etc.?

Jonathan Govette:    Definitely.  Let me give you a couple of quick tips, and they’re definitely available on our blog, so take a look at it.

Scott Nelson:       Mm-hmm.

Jonathan Govette:    I want to give you a couple of scenarios.  Now, everybody knows Google is the king of search engines.  When somebody is looking for a service of anything from a plumber or a doctor, dentist, you name it, they’re probably going to go Google it first and do a little research about you.  And if they can’t find you, then obviously there’s a problem there.  I’m going to give you a quick tip on actually how to generate some exposure online.  One is called Google Places.  If your practice is not on that, please go to Google and type in “Google Places” and create an account.  What that allows you to do is create a localized account where if you do a good job you should be able to see your information listed potentially on the 1through 5 pages.

Your goal though is to actually move up the rankings because most people don’t search past the first page.  So I’m going to give you the second tip, is to, number one, create a great website that’s simple, no wall of text [00:32:50].  You don’t want to have somebody scroll three pages down to find information.  You want to have everything [00:32:56] bolted, very simple, colorful, large buttons for them to do things.  They’re called actionable items, so you want them to either call you or email you.  Those are the only two things you really care about, because once you talk to them, obviously, you can sell them your services and what you offer.

And what you need to do in order to rank up on Google quickly enough, you need to write amazing content, which means in the form of a blog.  And what type of content you want to create is how-to guides, how to do something that your patients may not know.  And it could exercise, it could be how to eat healthy, but you want to write at least one to three articles a week, and you’re saying, “Oh my God, how do I that?”  Well, your staff actually has some good skills.  I recommend bringing them on board or you can a hire, a third-party firm, to help you write content as well.  What that allows you to do with Google is once they see that you have more valuable content than your competitors, they’ll slowly move you up the rank.

Now, this could take six months, it could take 12 months, [00:33:56] but it could be the difference between only seeing 20 patients a day to maybe seeing 50 or more.  So you actually double or triple your annual revenue by doing this simple tip, and for most practices that could be hundreds of thousands of dollars, if not millions.  So, I recommend that.  And there are some articles on our blog that actually teach you how to do that, and we’ll be happy to show you what those are if you call us or email us later.

Scott Nelson:       Gotcha.  Okay.  So there you have it, there really quick ways that you could probably implement right now.  And to your point about writing content, I mean there are a number of services that I’ve come across in the past probably six months that I wasn’t aware of that you can outsource…

Jonathan Govette:    Exactly.

Scott Nelson:       …that blog, sort of, that written content, at a relatively inexpensive cost, really, when you think about it.  And then maybe you can have someone from your staff go back and edit it or add some additional content to that existing piece.  So, good stuff.  Google Places.  Make sure your website is simple, with actionable items that are big and very clear.  The idea would be to get people to email or call you or get patients to email or call with questions.  And then make sure you have good content, so you can rank high on Google.  So three quick marketing ideas from Jonathan Govette with ReferralMD.

And speaking of that, you mentioned earlier, but getreferralmd.com is the website, and I don’t have a pull-up in front of me right now but you have a Blog tab I assume, and I would encourage everyone to go check that out if you’re interested in trying to win more patients and little tips like the three that Jonathan just mentioned.  There’s some really good content there.  You are heeding to your own advice, right? [Laughs]

Jonathan Govette:    I do it every day.

Scott Nelson:       Yeah.

Jonathan Govette:    I write content almost on a daily basis.  The real quick fourth tip, which I’d recommend to everybody watching, is how to use LinkedIn to market your practice.  There are some amazing tools on there.  I made a little video that you can watch on our blog.  What it allows you to do is broadcast your message out to millions of people instantly without paying a dime.

Scott Nelson:       Okay.

Jonathan Govette:    Just a little quick tip. [Laughs]

Scott Nelson:       Gotcha.  Okay.  There you go, LinkedIn.  And actually I remember that that’s one of the more popular posts on your blog.  Now that you mention that, I remember seeing it.  So, good stuff.  Let’s circle back around to ReferralMD.  The one thing that I’d like to ask you is the chicken and the egg syndrome that seems like a lot of startups, especially when it comes to technology, have experienced this sort of issue, but the chicken and the egg syndrome with you is that if your platform is for both the referring physician and the receiving physician.  Do you run into that a lot?  And how do you tackle that issue?

Jonathan Govette:    Actually, we don’t.  We’re very fortunate that both parties understand the problems with the current system.  They both spend almost the equal amount of time maintaining the referrals on both sides.

Scott Nelson:       Okay.

Jonathan Govette:    And unfortunately they’re one way only, so if one person updates one side of the referral, the other side is left out in the dark.  So we’ve actually had no problems.  In the last two months—we launched our website April 1st, around there, so about 10 weeks later we have already had 100-plus signups from major organizations.  I mean, I’ll name a few because they’re okay with it – [00:37:03] Harvard Med, MD Anderson Cancer Center, [00:37:07] Pittsburgh EDU, and numerous other large facilities, clinics, hospitals, imaging centers, laboratories, etc.  They all understand the value.

Scott Nelson:       Right.

Jonathan Govette:    So the benefit is, regardless of who signs up, our system will allow the sender, you can actually log in without having any contacts at all and still send a referral to somebody.

Scott Nelson:       Okay.

Jonathan Govette:    And then once they receive it they can log in, they can review it, actually work with you, and then once you reach a certain usage, then you actually start paying for it.  But you can use it for free forever up to 10 referrals a month.

Scott Nelson:       Okay.

Jonathan Govette:    And then once you start liking it and you start using it more, then you can upgrade to a subscription later.

Scott Nelson:       Gotcha.  And I have to think, as more hospitals begin to acquire physician practices, this would be a good tool just from an analytic standpoint in understanding this physician that we acquired a year ago, how many referrals are we losing outside of this group to a competing hospital or something like that versus the referrals that we’re keeping in-house.

Jonathan Govette:    That’s actually a really good point.  For example, Sloan-Kettering, their marketing director Joe, he’s working with us, his main goal is obviously, how do we track—they’re spending millions of dollars a year trying to acquire new patients.  They have no idea really in analytics to understand that yet, and with our system they could do that.

Scott Nelson:       Mm-hmm.

Jonathan Govette:    Another system, a real quick point, and this is for small practice.  If I’m a small practice and I’m sending a majority of my referrals out to, let’s say, a dermatologist, and I, let’s say, sent them over 500 last year, in my mind I know how much each of those referrals are worth to that person.  You know what?  With these analytics, maybe I should actually hire my own dermatologist for my own office so I can capture the revenue.

Scott Nelson:       Sure.  Yeah.

Jonathan Govette:    Most people don’t think about that.  Now, with our system, you can actually track and understand what types of referrals you’re sending and whether or not you want to monetize them or just continue sending them out to the people that you already work with.

Scott Nelson:       Yeah.  That analytics component, the more I think about it, the more I hear you describe it, that’s almost got to be one of the most beneficial aspects of this system.  And obviously there’s a lot of efficiency that you’re creating, not just efficiency but obviously the system becomes a lot more efficient, but the analytics component has got to be huge.  And so many times when I’m conversing with physicians, they don’t understand that component.  It’s like I’m confused a little bit because when you think about the patients they’re dealing with on a daily basis, they’re doing all kinds of diagnostic tests, and that in a sense is a little bit like analytics for that particular patient.  They’re seeing how that patient’s doing and how their disease is coming along and other symptoms better, etc.  I mean, in a sense it’s analytics, so why not apply the same sort of concept to your own practice?  I don’t know.  It seems like a lot of physicians miss out on that, but it’s got to be a huge component to your—a big aha! sort of thing once…

Jonathan Govette:    It really is.

Scott Nelson:       Yeah.  Once people get involved with it.

Jonathan Govette:    Well, it shocks me that, I mean, in most practices referrals could account for 40% to 70% of the revenue, yet that’s one area they don’t even track.

Scott Nelson:       Yeah.

Jonathan Govette:    And it could be so much more improved.  That’s why our reporting that we have is actually pretty extensive, and we have plans for a lot more in the future, too.  We’re actually getting a lot of results, or feedback, from the people we’re working with now.  They’re amazed.  They’re like, this is like money, which it is.  I mean, really, it boils down to understanding your practice, understanding which referral partners are beneficial to you, which ones aren’t, and how do you pivot anytime something goes wrong?

Scott Nelson:       Sure.

Jonathan Govette:    So if somebody’s not referring over time, well, A, you want to try to fix that, maybe take him out to lunch or call.

Scott Nelson:       Yeah.

Jonathan Govette:    If that doesn’t work, you switch over to another cardiologist, for example, that actually gives back or helps you back.

Scott Nelson:       Yeah.  Right.

Jonathan Govette:    And now you can actually track that relationship.

Scott Nelson:       Yeah, and you mentioned this earlier, I mean there’s a lot of marketing folks that work for specialists that will go out and, you know, and I know one guy in particular that I actually work with and he’s great, but the problem without some sort of system is that it’s really hard to major, you know?  It’s damn near impossible to major, really, unless you have a system like this that can track where these referrals are going to and coming from.  No, that’s cool stuff.  As we kind of conclude here, anything else that stands out in regards to your platform or the space that you’re operating in that we missed or didn’t get a chance to talk about that you’d like to at this point?

Jonathan Govette:    I think we did a really good job.  Good job. [Laughs]

Scott Nelson:       [Laughs] Pat ourselves on the back, right?  No, that’s good stuff.  I mean, I’ve got a whole list of stuff that we could’ve got into but for the sake of time, and I know the short attention span, I want to definitely try to keep it as brief as possible.  But definitely, I encourage everyone to go check out getreferralmd, G-E-T-R-E-F-E-R-R-AL-M-D, spell just as it sounds, getreferralmd.com.  Check out Jonathan’s platform, and really, check out that cost per referral tool that I think is under the Tour tab, if I remember correctly.  It’s really a cool tool to get an idea of how much referrals are costing in terms of time, etc., that kind of thing.  So, definitely, definitely, check that out.  And also check out Jonathan’s blog.  There’s some great content there as well.

So, Jonathan, as a last sort of question for you, any, you know, one or two pieces of advice that you’d give to the folks listening?  Obviously, they’ve listened to this interview, so they’re fairly ambitious.  They want to make a difference in whatever capacity they’re in right now.  So what one or two things would you leave for them?

Jonathan Govette:    Update your website weekly.  If you really are serious about getting more patients or helping the patients that you currently have, update your website daily with great information and keep them coming back because, number one, that means they’ll refer more business to you, and number two, Google will love you and rank you accordingly, and you’ll make more money that way as well.  So those two things, do that almost weekly and you’re going to do wonderful.

Scott Nelson:       Gotcha.  So be persistent.

Jonathan Govette:    Exactly.

Scott Nelson:       And I think you’d agree that it does take some persistence for sure to keep that bad boy updated, but it’s well worth it in the end.

Jonathan Govette:    Oh, it does.  It’s a workflow you have to maintain and put on your calendar if you’re not good at scheduling, and make sure you have a [00:43:31] log-out time every week, or every day if you can.  And then lastly, go ahead and sign up, we’re actually entering beta relatively soon.  We’re actually hand-selecting people that we’re working with to go into beta, so go ahead and click on “sign up” on the top right-hand corner of the website and enter your information, and we’ll contact you personally with a phone call.  And if you missed anything about this interview, feel free to ask me in person, I’ll be the one calling, and you can ask me any questions you want and I’m glad to help you out.

Scott Nelson:       Gotcha.  Cool.  There you have it folks.  You can call the founder, Jonathan Govette, personally if you have questions.  There you go.  And call him quickly before this blows up too fast, right?  [Laughs]

Jonathan Govette:    Once we get to about a million users, it’s going to be a little hard to return too many phone calls, but I’ll try.

Scott Nelson:       That’s right.  That cell phone that’s in your email signature will disappear. [Laughs]

Jonathan Govette:    I’ll try it to keep it on there as long as I can.

Scott Nelson:       That’s right.  Well, good stuff.  Thanks again, Jonathan.  I’ll have you hold on the call here for a second as we conclude, but thanks again for jumping on.  I really appreciate it.

Jonathan Govette:    Perfect.  Thank you.

Scott Nelson:       Alright.  There you have it, Jonathan Govette with ReferralMD.  Make sure to check it out.  And thanks everyone for listening.  Really, really appreciate your attention.  And again, I always want to mention this at the end of the interviews, if you’re looking for  a really easy way to consume the content from these interviews, go to iTunes, do a Medsider search, M-E-D-S-I-D-E-R, on iTunes, subscribe to the podcast for free, that way all the new interviews will be downloaded to your iTunes account for free.  So if you’re on a drive, if you’ve got some time on a subway or train or wherever you’re at, if you’ve got some extra time, you can catch up on some of these interviews.  So there you have it.  Thanks again, Jonathan, for coming on, and until the next episode of Medsider everyone, take care.

[End of Recording]


 

Can Friction be Removed in the Physician-Patient Interaction? And How Can Medical Device and Medtech Companies Get Involved?

What do you typically do when you want to know something? You Google it, right. Pretty normal. But what if you have a health question? Google isn’t very good for delivering succinct and accurate health information. With that said, what if you could ask a “real” doctor a question anytime, anywhere? 24/7 access to an actual physician. No more waiting rooms!

In this interview with Ron Gutman, Founder and CEO of HealthTap, we learn how HealthTap is revolutionizing the physician-patient interaction. And perhaps more intriguing, Ron shows us how medtech and medical device companies can take advantage of this unique platform to engage with their customers and patients in a profound way.

Interview Highlights with Ron Gutman

  • What is HealthTap and how is this technology disrupting the traditional physician-patient interaction?
  • Want to ask a question to an actual doctor anytime, anywhere?  Better yet, get a 2nd opinion within seconds using HealthTap’s “Agree” feature.
  • 4 reasons why physicians should consider participating in the HealthTap community.
  • How medtech and medical device companies can take customer engagement to a new level using HealthTap’s platform.
  • Think the healthcare and lifescience communities are slow to respond to emerging web trends and technologies?  Learn why Ron thinks this is NOT true.
  • Ron’s lasting advice for medtech doers.  Hint: Believe that friction can and should be removed!
  • And much more!

This is What You Can do Next

1) You can listen to the interview with Ron Gutman right now:

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2) You can also download the mp3 file of the interview by clicking here.

3) Don’t forget – you can listen to this interview and all of the other Medsider interviews via iTunes.  And if you get a chance, leave us an honest rating and review on iTunes. It really helps out.

4) Read the following transcripts from my interview with Ron Gutman.  Also, feel free to download the transcripts by clicking here.

Who is Ron Gutman?

Interview with Ron Gutman - Founder of HealthTapRon Gutman is the Founder and CEO of HealthTap. Prior to founding HealthTap, Ron was the founder and CEO of a leading online consumer health 2.0 company that developed the world’s largest community of independent health writers and became one of the largest health sites on the Internet, serving more than 100 million users to date (acquired in early 2009).

Ron is also an angel investor and advisor to health and technology companies, Rock Health (The first Interactive Health Incubator), and Harvard Medical School’s SMArt Initiative (“Substitutable Medical Apps, reusable technologies”). Additionally, Ron frequently speaks at health and technology conferences (such as TED and Health 2.0), writes about technology, health, and smiling in leading publications (such as Forbes, the Huffington Post, and TEDBooks), and serves as the Curator of TEDx Silicon Valley.

Read the Interview with Ron Gutman

What do you typically do when you want to know something? You Google it, right. Pretty normal. But what if you have a health question? Google isn’t very good for delivering succinct and accurate health information. With that said, what if you could ask a “real” doctor a question anytime, anywhere? 24/7 access to an actual physician. No more waiting rooms!

In this interview with Ron Gutman, Founder and CEO, we learn how HealthTap is revolutionizing the physician-patient interaction. And perhaps more intriguing, Ron shows us how medtech and medical device companies can take advantage of this unique platform to engage with their customers and patients in a profound way.

 

Here’s a few things we’re going to learn in the interview with Ron Gutman:

 

  • What is HealthTap and how is this technology disrupting the traditional physician-patient interaction?
  • Want to ask a question to an actual doctor anytime, anywhere?  Better yet, get a 2nd opinion within seconds using HealthTap’s “Agree” feature.
  • 4 reasons why physicians should consider participating in the HealthTap community.
  • How medtech and medical device companies can take customer engagement to a new level using HealthTap’s platform.
  • Think the healthcare and lifescience communities are slow to respond to emerging web trends and technologies?  Learn why Ron thinks this is NOT true.
  • Ron’s lasting advice for medtech doers.  Hint: Believe that friction can and should be removed!
  • And much more!

 

Of course, there’s a lot more valuable info we’re going to uncover in this interview.  But before we dig in, you need to listen to these brief messages from our sponsors.  And by the way, if you’re interested in becoming a Medsider sponsor, our sponsorships are now open.  Go to Medsider.com/sponsor.  Again, that’s Medsider.com/sponsor.

 

Now, listen up…

 

First, did you know that C-level executives from ALL of the Fortune 500 companies are registered on LinkedIn?  Impressive, right?  With that said, would you like to know how to connect with some of these prominent leaders and decision makers?  Maybe you’re looking for your next gig?  Would you like to learn how to use LinkedIn in order to make sure you are noticed and seen by recruiters and headhunters?

 

Go to Medsider.com/LinkedIn.  I’ll personally show you 3 steps you can take right now to enhance your LinkedIn profile in order to reach an uber level of exposure.  You’ll also learn more about our first course in collaboration with Lewis Howes, who’s written 2 books on how to effectively use LinkedIn.  Check it out.  Medsider.com/LinkedIn.

 

Next, you know it.  I know it.  The simple reality is that a conference is a huge opportunity to build relationships with extraordinary people.  People who might have a significant impact on your professional or personal success.  To make sure that you maximize the return on your investment of time and money, you can’t afford to be a conference couch potato.  No, you need to be a Conference Ninja.  Go to Medsider.com/ConferenceNinja and download the FREE eBook.  You’ll find 13 steps you can take right now to make more connections at your next conference.  Check it out.  Medsider.com/ConferenceNinja.

 

Okay ambitious medtech and medical device doers…here’s your program…

 

Scott Nelson:    Hello, everyone.  Welcome to Medsider, home of the personal med tech or medical device MBA.  This is a show, if you’re new to the show, it’s a program where I bring on interesting and dynamic med tech/medical device stakeholders for an interview.  We learn more about their business, what they’re doing, hopefully we can glean a lot of insights out of the conversation.  And on today’s call we have Ron Gutman, who is the CEO and founder of HealthTap.  So welcome to the call, Ron.  Appreciate you taking some time.

Ron Gutman:   Thank you.  Thank you, it’s a pleasure to be here.

Scott Nelson:    Okay, so HealthTap.  healthtap.com is the website.  Let’s start out with an overview of what this service exactly is.

Ron Gutman:   Oh, absolutely.  So it’s very, very simple.  So, you know, every person, every patient can ask any health question that’s on their mind or any concern that they have, and within minutes get an answer from a licensed physician or several licensed physicians who are US-based, and the best thing of all is that it’s completely free.  So, really simple, valuable position of getting back to people very quickly with the best, most reliable and accessible healthcare information and answers from a network of US-licensed physicians at no cost.

Scott Nelson:    Gotcha.  Okay.  So the technical description would be like an information exchange between, you know, patients and physicians totally online.  But when I first came across HealthTap and I went to your site, I’m thinking, “Okay, how many times have I been in the waiting room of a primary care physician’s office or even in the ER and it’s freaking taking forever?”  And I’m there with maybe one of my kids or something and they have a sore throat or maybe even just something fairly basic, nothing too intense, and I’m like, “This is taking forever.  Isn’t there a more efficient way?”  That’s what I thought of instantly when I thought of HealthTap.  Is that kind of a little bit of where you’re going with this?

Ron Gutman:   Yeah, absolutely.  So, all our physicians [00:02:05] quality, right?

Scott Nelson:    Mm-hmm.

Ron Gutman:   So, [00:02:09] even to marry efficiencies and quality together, we believe that people would, and they already are, [00:02:16] to use our products and services.  And I don’t know if you heard but our app was featured as the number one app in the Android store just a few days ago, and you know there are hundreds of thousands and I think even close to a million apps in the iPhone store, and HealthTap was featured as number one…

Scott Nelson:    Okay.

Ron Gutman:   …because the concept of finding health information from a network of 7000, almost 8000 now it should be, US-licensed physicians for free is very compelling to people.

Scott Nelson:    Right, no doubt.  So, first, I wanna say congratulations for that.  That’s definitely a cool distinction for sure…

Ron Gutman:   Thank you, I appreciate that.

Scott Nelson:    …a testament to what you’re doing with HealthTap for sure.  You know, another thing that I thought of, too, when I first heard about HealthTap and in even doing some research for this interview, Ron, is kind of more of the Google aspect of it.  Because everyone knows like if you don’t know a piece of information, you just Google it, right?  “I’ll Google that,” and typically Wikipedia comes up.  But if you’ve ever googled something healthcare-related, it sucks.  I mean, it sucks bad.  I mean, it’s really, really difficult to find legitimate, you know, quick, easy answers.  You have to shuffle through a wide variety of information typically.  And so it’s almost like HealthTap is bringing really legitimate answers to healthcare questions in a very efficient way.

Ron Gutman:   Oh, that’s absolutely true, and I think that Google is actually great.  Google is not providing health answers.  Google can just point to whatever the best thing out there is, and Google just helps you orient yourself.  The problem is not Google.  The problem is what Google can find out there and the quality of this health information that is not from physician, it’s not personalized and it’s from sources that are, you know, somehow doubtful.

So what we’re doing is creating a solution that sometimes can be actually found by Google, so you can go to Google sometimes and find HealthTap physicians answering your questions and we’re creating visibility into these providers of the best health content in the world, but in the past, before HealthTap it used to be locked in doctor visits.  So, you know, you used to go to your physician and ask the question, and then his or her answer would be basically locked away in a doctor visit and never accessible again, whereas what we’re doing is once the question is answered by a physician, the answer is now available to anyone anywhere in the physician’s virtual practice on HealthTap.

So there is efficiency there of content that otherwise would be inaccessible to people is now accessible to people for free.  So whether you have a medical insurance and you are the patient of this specific doctor, and the doctor sends you to their virtual practice to see whether the question had been answered before, or you live in a place or you have an economic situation that you cannot afford going to see a doctor, you can still have access to the answers from some of the top physicians in the US.

Scott Nelson:    Gotcha.  Okay.  Very cool.  So let’s spend the next maybe 5 to 10 minutes talking about like the actual exchange or the interface between the members or patients and then the physicians using HealthTap, and probably most of my questions are gonna more on the physician’s side just because on the member’s side it seems so easy, on the patient’s side it seems so easy.  But again, HealthTap, it’s a place where I can go and ask a question, and then I can get multiple answers to that same question from a wide variety of physicians?  Or I shouldn’t variety but a number of different answers from physicians based on that question I asked?

Ron Gutman:   Absolutely, and more than that you can actually browse through answers that physicians had answered in the past for questions similar to yours so you can get a picture of what the physician community is thinking about your question.  And more than that, we added a few months ago a revolutionary feature to our service that is called the “Agree” button, and the Agree button is a button that is available only to physicians on our service and they can look at the answers by other physicians and either agree with them or not.  And if you look at an answer today, almost all answers on HealthTap you will see that they have “Agrees” on them, and if there is a question there that was answered by multiple physicians, you can actually see how many Agrees this answer has, and by doing so you can determine which answer has more credibility in the physician community.

So not only that you get multiple answers and multiple basically first opinion, second opinion, third opinion to your question, but also you can see which of these opinions carries more weight in the physician community, which is very powerful and very unique to us.

Scott Nelson:    Right.  Yeah, no doubt.  No doubt.  I can definitely see the advantages of that Agree feature.  And I’m just looking at an example right now on your website, and I see a question, “How do you prevent your child from getting ear infections?” you know, a fairly simple, fairly basic question, and I see multiple physicians have responded with the little Agree button.  Now, if I’m a physician and I come in and I kind of disagree with that answer, does my “disagree” show up as almost a reply underneath the other answers from the physicians?

Ron Gutman:   Well, there’s no disagree on HealthTap…

Scott Nelson:    Okay.

Ron Gutman:   [00:07:46] it’s a meritocracy that is based on, you know, physicians highlighting the thing that they agree with most.  So rather than a disagree because we only admit to our network US-licensed physicians that are some of the best in the practice, so we definitely actually don’t admit physicians that have disciplinary actions against them or malpractice suits and things like that.  So, all the physicians in HealthTap are great physicians.

What the Agree button allows us to do is really highlight the ones that stand out even more than others, and if [00:08:19] specific question [00:08:20] can be a doctor is getting a lot of agrees in general within a specific question, there’s another doctor who has a specific expertise and he or she will get more agrees.  But we don’t have the notion of “disagree” because we have tremendous respect to all the physicians in our network.

Scott Nelson:    Okay.  Okay.  So from a patient’s perspective, I can go on and if a certain answer has, you know, 15 agrees, I can pretty much know that that’s a pretty legitimate to my question.

Ron Gutman:   You know, this is your judgment. [Laughs]

Scott Nelson:    Yeah. [Laughs]

Ron Gutman:   What we’re doing is we believe…we want to put the power in the hand of the consumer.

Scott Nelson:    Yeah.

Ron Gutman:   What we’re doing is actually creating transparency and to watch the most knowledgeable people in medicine think about certain issues and how their knowledge is distributed and what other people think about it.  You then make the decision of whom you want to trust.  So it’s really patient-centered healthcare.

Scott Nelson:    Okay.  Okay.  And then, in regards to the app, you mentioned that you were featured as the number one downloaded Android app for healthcare.  I presume you have an iPhone and maybe even iPad app as well, you’re on the iOS market?

Ron Gutman:   Absolutely.  Absolutely.  Our first app actually was in the iPhone market, and then we have an iPad app and we’re about to launch a bunch of HTML apps as well that will be available to browsers, etc.  So, really, all the channels of distribution are open, and actually very soon we’re going to expose a bunch of APIs that mean we are allowing developers in other service providers and other device or app creators to actually attach to our service and provide it to their users.

Scott Nelson:    Okay.  Okay.  And in talking about kind of the Agree feature, if I’m a patient and I type in a question and this answer to a physician looks fairly legit, how do I know that—I mean, explain a little bit about kind of the background work that you do with physicians that want to contribute to the HealthTap community.  How do I know, I guess from a patient’s perspective, that this physician is legitimate and they’re not involved in some malpractice lawsuit or they’re a legitimate physician?

Ron Gutman:   Well, that’s our job.  We’re screening physicians one by one.  There’s a very rigorous application process.  Not every physician can be part of HealthTap.  Actually, the physicians apply or they are invited by us to participate, and when they apply we look at their license, we go to the state licensing boards and we look at their license and see if they’re in good standing, and obviously we now have enough physicians in our network that we’re getting a lot of information from other physicians, and we turned down hundreds of physicians already, unfortunately.

It’s not that we would not like to have everyone, we would, but we want to make sure that we are maintaining a status of really the best physicians in this country.  So we’re doing a very, very diligent, one-by-one, deep job of really understanding the reputation and the track record of the physicians we admit to our network.

Scott Nelson:    Okay.  And let’s shift the conversation to a little bit more on the physician’s side, coming from the physician’s perspective.  If I’m Dr. Smith and I’m an internist in Chicago, Illinois, for example, what are the benefits to me to taking part in the HealthTap community?

Ron Gutman:   Oh, absolutely.  So, first and foremost, this is the first ever safe place for a physician to build their reputation and get recognition for their expertise and knowledge online, right?  So, you know, physicians are wary of participating in social networks like Facebook and Twitter and the all the like for multiple reasons, and HealthTap is a health-dedicated, highly professional, very serious network where only US-licensed physicians are admitted and patients are funneling their very serious questions to these physicians.  So building reputation and getting recognition in an environment that is safe for physicians is something very big.

The second thing is really distribution.  Because we have so many users now, we are definitely creating a very efficient and effective channel distribution to these physicians off basically new patients who are, first, looking for an answer to their question or their concern, but eventually many of them need a doctor.  And obviously we have no intention to actually give treatment to these patients online.  We actually help them get some education and reduce their anxiety, and ultimately find the right physician for them that they can then see in the real world.  So, this is the second thing, really, distribution.

Scott Nelson:    Uh-huh.

Ron Gutman:   The third thing is this whole notion of creating efficiency in the practice of care.  And you know, I don’t know if you know but physicians in the US are getting paid by the visit…

Scott Nelson:    Mm-hmm.

Ron Gutman:   …rather than by the length of the visit, and if they can save time during the visit by not answering all these frequently asked questions that are pretty generic, there can actually be more time to either give their patient deeper care or just see more patients.  So, we are creating for them the opportunity, right, to actually take some of this knowledge that they repeat again and again and again every day and put it in the form of answers in the cloud under the virtual practice and send their current patients to interact with this content, to see it before the visit, in between doctor visits, and create efficiency in the process of care.

And more than that, because of these answers, they’re organized in a virtual practice that we do for free for every physician with their picture, with their medical license, with all the information about their practice, with contact information, etc., it can be easily found by search engines, any social media because of their expertise and not because, you know, the magazines in their waiting room were interesting or the receptionist was kind or not, which is the kind of reviews that they are getting in all the kind of doctor rating sites.

Scott Nelson:    Gotcha.  Okay.

Ron Gutman:   So it’s about the quality of the content and the knowledge of the physician, not about the quality of the magazines in the waiting room.

Scott Nelson:    Gotcha.  Gotcha.  Very good, and it makes a ton of sense.  And I noticed something on your website that referenced awards for the physicians that participate the most.  Can you explain that in a little bit more detail?

Ron Gutman:   Absolutely.  So we get so much participation that it’s almost overwhelming to see all the thousands of amazing physicians that are giving their time and their hearts and really helping us serve so many patients, so we decided to really create some recognition for these physicians, and especially the most prolific and the ones that really spend—you know, we ask hundreds of physicians to spend hours every day and really help patients everywhere.

And we decided to create some recognition for them, and we created at the end of the year this competition that basically allows the physician to actually shine and get their answers to patients but also get a lot of agrees from their peers and a lot of thanks from the users, and then the ones that actually got most of the questions and most of the thanks and most of the agrees basically got from us this award to better highlight them and recognize them for all the wonderful work that they’ve done.

Scott Nelson:    Gotcha.  Okay.  Very cool.  And have you noticed that the physicians in the HealthTap community, did they respond well to kind of that awards distinction, that awards kind of aspect to it?

Ron Gutman:   Yeah, I don’t mean that they respond to the award. [Laughs]

Scott Nelson:    [Chuckles]

Ron Gutman:   I mean that it was a nice thing to do to recognize people, to show them our appreciation.  It’s kind of happening in hindsight.  I don’t think anyone is doing it for the award. [Laughs]

Scott Nelson:    [Laughs]

Ron Gutman:   I mean, I don’t think that they need that award.  I think these are very respected physicians that get paid well and do well in the real world.  I think that their real award is the fact that they’re helping so many people all the time.  But I think it’s a nice way for us to show them our appreciation, to show them the patients’ appreciation and to highlight them, to allow them to build and enable them to build this reputation as outstanding, exceptional physicians that don’t only care about, you know, treating patients in their practice but they really care above and beyond and want to do some good in the world beyond their everyday practice.

Scott Nelson:    Gotcha.  Okay.  And I want to ask you a few more questions about kind of the HealthTap from the physicians’ perspective before we move on to, you know, how HealthTap can be used kind of for med tech and medical device companies because that’s where most of my audience is at right now.

But the liability aspect, if I’m a physician and listening to this, and I know there will be a number of physicians that will listen to this interview, I’m thinking, “Okay, I like the concept.  I like the idea that I can sort of expand my reach, maybe contribute to the community, help with efficiencies.  That’ll make sense, Ron, but what about the liability aspect?  Is there any sort of assurance that I won’t be sued by someone that [laughs] reads my answer to a question online, and then maybe they don’t like or something went wrong, and then they come back and want to file a lawsuit or something like that?”

The liability issue is always something that comes up in healthcare, so have you addressed that at all?

Ron Gutman:   Absolutely.  So, first of all, thank you for bringing up the question…

Scott Nelson:    Yeah.

Ron Gutman:   …because as you can imagine, you are not the first one who’s it bringing it up.

Scott Nelson:    [Laughs] Right.

Ron Gutman:   And we’ve heard it from physicians, we’ve heard it from other people, and the thing that we did, we embarked on an effort more than six months ago when we understood that this is a real concern that physicians have.  And although we understand that the tangible risk is actually very, very low, but although we think that, we said, “Okay, there is a concern there.  There is a concern there and we need to address it.”

So we spent almost six months talking with some of the biggest insurance companies in the world, actually, to try and convince them to create a new type of insurance that will cover physicians on HealthTap to participate on HealthTap in social media without this concern that you are mentioning.  And we were extremely lucky to be working with Lloyd’s in London, which is considered one of the largest insurance firms in the world today.  And they were open and understanding how important what we are doing is, and we worked with them and with their brokers together to create a new type of insurance that we’re providing now to all the physicians on HealthTap for free as we admit them to the network.

Scott Nelson:    Hmm.

Ron Gutman:   And this insurance covers them 100% for everything that they write on HealthTap.  We also needed as part of this process of creating this revolutionary type of insurance to put a lot of processes in place in HealthTap to ensure that we’re bringing on board physicians who are credible, that go through a very rigorous process of bringing them on board, of creating all the education materials that we’re creating, working with the physicians together to be sure that everything that we’re doing on the site is done right.  And after we had done all these processes, Lloyd’s accepted it and basically with us together created this groundbreaking insurance that allows the physician to participate on HealthTap with no concern and with full peace of mind.

Scott Nelson:    Oh, wow.  Wow.  So there should be no worries from a physician’s perspective and participating in the HealthTap community.

Ron Gutman:   Yeah.  No, the excitement was tremendous…

Scott Nelson:    Cool.

Ron Gutman:   …and there was a lot of talk about the thing in the physician community.  This is a new product.  This is an insurance that’s never existed before, and we are providing it for free to every single medical expert in the network.

Scott Nelson:    Very good.  Did not expect that answer, but definitely takes care of the liability issue without a doubt.  So last question before we move on to how medical device and med tech companies can use HealthTap.  Are there certain geographic areas across the country where you’re noticing that more physicians are using HealthTap versus other parts of the country?

Ron Gutman:   You know, this is the thing that actually surprised me.  We had an expectation that at least in the beginning we will see more of the physicians participating on HealthTap, and the usual suspects are regions of San Francisco, New York, Los Angeles, etc.

Scott Nelson:    Mm-hmm.

Ron Gutman:   And we’re extremely surprised to see that within a few months we were able to actually get reach on all 50 states.  So HealthTap is now available in all 50 states and really nicely distributed in areas that we didn’t even imagine that will adapt so quickly.  But yes, we have some concentrations along the coast that are a little bit more than elsewhere in the country, but I have to tell you the truth.  I didn’t expect that within a few months we were going to get full coverage for 50 states and we were going to get so much distribution within the states, in urban areas, in rural areas.  And some of the most prolific physicians are actually coming from some rural areas in the Midwest, in the South and other coast countries, so I’m actually very excited about this.

Scott Nelson:    Yeah, without a doubt, because I think most people would suspect that you’d have the highest concentration of participation in those areas that you mentioned in the coast, particularly San Francisco, the Bay Area, New York, Southern California, etc., but that’s definitely good to hear that you’re spreading the HealthTap message throughout the country through that participation, so very good.  And then, specialties, are you noticing that certain physician specialties are participating more than others?

Ron Gutman:   So when we started this service, the first [00:23:05] panel that we did was with pediatricians and obstetricians, and then we expanded to general practice, and then we expanded to a total of 104 specialties.  So we’re very broad right now, but yes, although there’s broad participation in all of the verticals, in all of the specialties, we are seeing, I feel, you know, because the largest number of physicians that we have on our side are general practitioners, so we are seeing a lot of participation in general practitioners, which is great because general practitioners can answer questions along entire continuum of medicine.  So this is definitely the number one participating community.

Immediately after that, you see a lot of energy in pediatrics and obstetrics.  So again, we started with them at the beginning, so pregnancy, child care, everything, healthcare for children, etc, are topics that are very, very hot on HealthTap, and we’re seeing a ton of participation by pediatricians, obstetricians, and of course, general practitioners.  But even beyond that, I mean, you know, [00:24:15] lots of other participation in orthopedics, in cardiac, in dermatology, in ophthalmology.  So there are many others that we’re seeing a lot of participation as well, and we even have a couple of doctors that are doing space medicine, believe it or not. [Laughs]

Scott Nelson:    [Chuckles] No kidding.

Ron Gutman:   So if you ever want to go to space, you have a question…[laughs]

Scott Nelson:    [Laughs]

Ron Gutman:   We have a couple of doctors there, too.  So, obviously they’re going to get a lot of questions.  But I want to say, yes, there’s some more energy in certain areas, but there’s a very broad coverage all the way to very, very specific things in health and well-being.

Scott Nelson:    Okay.  Now let’s transition a little bit to how—because if I’m listening, like I mentioned before, most of the listeners on this call are kind of in the medical device/med tech arena, and I’m thinking, “This is really cool.  I’ll have to check out HealthTap in more detail.  I maybe want to use this as a patient, but how does it impact my company?”  So let me post that question to you, Ron.  I know you’ve got a certain widget that I’d like you to talk about, but how can a medical device or medical technology company use HealthTap to further their message about their particular product?

Ron Gutman:   Absolutely.  So, I mean, we have offerings for individual physicians, but now we’re broadening our reach and, first and foremost, we started reaching to healthcare providers in institutions and groups beyond the individual physician.  So we are very fortunate to have a bunch of groups, more than 600 now groups that have joined up to a pilot program that we’re doing now with institutions that actually physicians participate as a group rather than as individual physicians, you know, all the way from local smaller practices to medium practices, to all the way to large practices that we are lucky to work with organizations in Mount Sinai Hospital and the Cleveland Clinic and such.

So I think that the variety is pretty broad there.  We’re providing them the opportunity to build basically communities around their hospitals, around their physicians, and really help create an interaction, an interactive environment in their community between patients and physicians and patients and institution, and this is going really well.

We also opened a bunch of APIs that I’m very excited about, and widgets, that are enabling us to provide HealthTap’s capability to partners that want to attach what we are able to do to their products and services.  So, for example, our APIs—let’s start with the widgets.  So if you have a website or a blog that is serving patients and is serving people that care about health and provide them general information, and you want to attach the capability to actually ask a doctor a question, and this is not a HealthTap question but ask just a doctor because physicians in our network independent physicians, you can basically take our widgets at no cost, these are free widgets, but they can take it and put it on their website and then customize them.  They can come in multiple colors and sizes, and you can really customize them to whatever the look and feel of your website or blog is and provide the functionality of asking a physician a question on your website or blog.

More than that, the API can make it even more flexible and you can literally now start building apps or attaching things to your service or product, again in the same way.  If you have a medical device, if you have a diagnostic tool, if you have an app or something like that and you just want to call our APIs, create your own front end, create your own channel of distribution and just add this capability of allowing your users to actually ask questions, ask physicians questions, you can add it by getting an API key from us and starting providing.

And the APIs are extremely flexible, so you can define which kind of physician you want to answer your question, they’re in a certain specialty or a certain geography or a certain kind of provider, and there’s a lot of customization that you can actually do to choose which physicians and in what way they will answer questions on your site.

Scott Nelson:    Gotcha.

Ron Gutman:   So, it’s extremely powerful.

Scott Nelson:    So to get a little bit more specific, let’s say I’m in the marketing department at Medtronic, for example, and if a patient googles “coronary stent” or “coronary arterial disease” or “coronary artery disease” or something like that, and somehow something from Medtronic’s coronary stents come up and the patient clicks on that, it takes him to the Medtronic website that’s specific to coronary stents, there could be a little HealthTap widget that says, “Ask a question about our products directly to a physician.”  And so that patient then types in a question about coronary stents, and then a physician will answer it through the HealthTap community.  Am I understanding that correctly?

Ron Gutman:   Oh, absolutely.

Scott Nelson:    Okay.

Ron Gutman:   That’s definitely a great use case that you just outlined, potential use case, and the beautiful thing is that you get the answer from really unbiased, great physicians that will just give your patient an answer for a concern that maybe they’re not answering because this medical device company or others, I’m sure that on their website they’re spending a lot of time talking about their product, but I’m not sure if they’re spending a lot of time creating some patient education.

If the patient is there and has one of these questions that you just mentioned right now, he has two options.  One of them is to leave the site and go elsewhere to find information that they need, and the other one is to just stay on the site, and then you provide the patient some valuable information that they really appreciate and thank you for it because [laughs] you’ve provided to them value that didn’t cause them to go and do some more work to find information elsewhere and lose the patient, right?  Because he is going to be elsewhere.

Scott Nelson:    Right.

Ron Gutman:   So, I think you just said exactly one of many use cases that are possible that can be the same on devices, that can be the same on diagnostic tools, that can be the same on services that you can attach this to, that can be the same on apps and many, many use cases around that.

Scott Nelson:    Cool, and I’m sure hospitals could use the same sort of example by placing a widget on their website so if someone has a question about a particular surgery and they happen to land on a particular hospital’s website, they can directly ask maybe a physician through the HealthTap widget, and that hospital can then kind of create a little bit more engagement instead of just kind of pushing a bunch of content at that potential patient.

Ron Gutman:   Exactly.

Scott Nelson:    Yeah.

Ron Gutman:   Exactly, and they can do it while people are waiting in the waiting room.  I mean, now with the world of iPad app and iPhone app, you can imagine a hospital creating like a very simple app that people can use in their waiting room, and then just a touch of capability into the app, and then they can define that just physicians that are associated with the hospital system will answer questions…

Scott Nelson:    Uh-huh, that’s cool.

Ron Gutman:   …that are available to them, and they then attach this capability to their app without needing to create technology that they would not otherwise be able to create themselves.

Scott Nelson:    Yeah.

Ron Gutman:   So, it’s very possible.

Scott Nelson:    Yeah, [chuckles] you can run a number of different directions with that idea.  That’s very cool.  One other question I had, too, in terms of how HealthTap makes money, and more particularly from the kind of the med tech and medical device company standpoint, I’m wondering, if I’m in the marketing department for, let’s say, an insulin pump for diabetic patients, say you’ve got some diabetic patients that are asking questions on the HealthTap website, I would love to be able to put some sort of advertisement in there that redirects that person to learn more about my insulin pump that I sell, for example.  Is that possible, or are you opening up advertising through the HealthTap community?

Ron Gutman:   Oh, the short answer to your question is no.

Scott Nelson:    Okay.

Ron Gutman:   And we’re very focused right now on creating a better product and a more useful product, and then creating channels of distribution that will get more users and more doctors to participate in the interaction on our services.  So, no, we’re not offering advertising, not paid and not unpaid.  We’re really creating [chuckles] a new way for patients to interact with their health and to interact with their physicians.

Scott Nelson:    Okay.

Ron Gutman:   And I think that the business model will be more along the lines of facilitating this interaction rather than along the lines of putting ads.  I think that there are better ways and we’re not there yet, so I’m not committing to anything, but we are seeing and thinking about business models that are much more aligned with process of care, you know, and thinking about how money exchanges hands in the real world when people go and see physicians and how they exchange [00:33:57] hands for value rather than thinking about immediate solutions and advertising solutions.  Really, we are more in the world of creating less friction, less costs, better experienced interaction between patients and physicians, and we’re very keen on keeping it in that direction.

Scott Nelson:    Gotcha.  Okay.  Okay.  Cool.  Makes a lot of sense.  I know we’re running a little bit short on time, so I’d like to ask you a few, more some advice kind of background questions, because I know before HealthTap you were involved in a couple of other health and wellness startups, namely I think HealthCentral and Wellsphere.  It seems like, in researching a little bit about your background, you’ve always had an interest in kind of the healthcare space, particularly technology within the healthcare space.  I want to ask you, where does that interest come from?  Because I know you started something at Stanford as well during your time there.  Where does that interest come from?  And then the second question is, do you ever get frustrated at the speed that the healthcare community adopts, you know, the Web 2.0, Web 3.0 lifestyle, for lack of a better description?  Does that make sense?

Ron Gutman:   Oh yeah, absolutely.  So, you know, I grew up among physicians and I think I got the bug very, very early in my life.  And then, as you mentioned, when I got to Stanford I think that it was highlighted that this is what I want to do for the rest of my life.  And Stanford has amazing people, very supportive of both entrepreneurship and breaking ground in an industry that needs transformation especially in like technology.  So, you know, I was just fortunate to work with some very amazing people at Stanford, and now more than [00:35:55] half of our company right now is associated with Stanford in one way or the other, so we’re very, very fortunate to be here in downtown Palo Alto and work with this amazing institution.

And I think that, well, you’re asking about innovation and you’re asking about adoption by physicians and the healthcare industry of new technology, and I think the problem is not whether or not physicians and healthcare professionals adopt technology or not.  I think they do.  I think the problem is that very few entities have ever offered them high-quality technologies to engage with, and my biggest proof point for that is, I don’t know if you knew that but I’m assuming you actually do, is that physicians are the number one adopters of iPads.

Scott Nelson:    Yeah.  Mm-hmm.

Ron Gutman:   Right?  So it’s the profession that is really one of the fastest adopting professions for iPads.  And if they were really laggers and not the adopters of new technology, that would not be the case because iPad is definitely a new technology, and their adopting it, it’s like wildfire, right?  Smartphones and iPads are just ubiquitous among physicians.  So, and that’s my proof point to show that when there are good technologies that actually provide value to the physicians, we’ll adopt it really quickly.

And we’re seeing it with HealthTap as well.  You know, we’re just a few months getting close to 8000 physicians that are using our system regularly.  And then people, when I started the business, people told me, “Don’t even start because physicians are adopting it so slowly.  They are never going to change their ways.  A lot of people tried to bring physicians to engaging [00:37:32] them in conversation and failed.  Why would you succeed?”

And I said, “No, it’s about creating great technology.  It’s about creating great interface.  We spent a lot of time on UI design, on UX design, right?  User experience, user interface, right?  We spent a ton of our time creating products that actually fulfill needs with actually designs in a way that makes it very easy and compelling to the physician and to the patient to engage.”

So I think as long as we do that exactly like Apple has, we will get a lot of adoption because physicians are not laggers in adoption but they’re very picky.  They’re very smart, and they will choose only the things that are compelling to them.  So that’s why we’re spending a lot of our time.

Scott Nelson:    Now, that’s interesting that you say that, because I don’t think I’ve ever heard someone describe it in that way, because I think that most people would respond to that question as, you know, it seems like people in the healthcare don’t really adopt technology that quickly or they’re at least slow to adopt to it.  What you’re saying is, “No, that’s not necessarily the case.  In fact, it may be the opposite.”  You’re saying that it’s not that they’re slow.  They’ll readily adopt technology if it’s right, if it’s easy to use, if it’s useful, if it’s engaging, etc.

Ron Gutman:   Yeah, so my grandmother used to say that a dancer who can’t dance says that the floor is uneven. [Chuckles]

Scott Nelson:    [Laughs]

Ron Gutman:   So, no. [Laughs]

Scott Nelson:    Yeah, that’s good.  That’s a good analogy.  Yeah, I like that.

Ron Gutman:   The floor is fine.

Scott Nelson:    Yeah.

Ron Gutman:   I mean it’s even.  You just need to learn how to dance.  We need to build interfaces, we need to build better products that actually answer needs, and we need to really, really focus on user experience and make it easy and valuable for these physicians to do what they’re doing and make their lives easier, with less friction, and actually more fun.  I mean technology can actually be a lot of fun if it’s done right.  So, this is what we’re doing and we’re very excited about it.

Scott Nelson:    Gotcha.  And lastly, I know sometimes I’ll get responses from people that listen to these interviews or read the transcripts, and they’ll say, “There’s too much that went on during the interview.  I’m not sure exactly what the take-home message would be.”  So I always like to kind of conclude the interviews with, you know, for those listening that are in the healthcare space whether it’s physicians, whether it’s people that work for a medical technology company, whoever it may be, what’s the one piece of advice that you’d like to leave them with?

Ron Gutman:   Absolutely.  You know, what I want to leave people with is the vision that healthcare will transform and will become a great place for people to find care if we are able to take a lot of it and move it to the smartphone, move it to the tablet, right?

Scott Nelson:    Mm-hmm.

Ron Gutman:   There’s a lot of friction that is being created in the healthcare system and the experience that people have with the healthcare system, but also in how they manage their health, that can be removed if we virtualize part of this process of care.  I don’t think we need to virtualize the entire process of care.  I’m not one of these people that say that we need to replace doctors with AI machines, right?

Scott Nelson:    Mm-hmm.

Ron Gutman:   What I’m saying is there are certain parts of the healthcare system that can and should be moved to the cloud where people can still interact with physicians, with healthcare institutions, with health knowledge, with much less friction, in a personalized way, because we own cell phones and we own now smartphones that are uniquely identifiable to us.  So the services that we’re getting when we’re downloading these apps are especially tailored to us, they have much less friction, right?  They cost much less and they are much, much more engaging because we feel these apps and games that people spend tons of tons of time engaging in them.

Scott Nelson:    Mm-hmm.

Ron Gutman:   So if I leave you with one thing after this interview, it’s a very compelling vision of taking a portion of healthcare and virtualizing and allowing people to very easily find the best, most compelling, most personalized, most trustworthy health information and interact with physicians and other healthcare professionals with much less friction, much simply, with less cost, and in a way that will help them improve their health and well-being in a significant way.

Scott Nelson:    Okay.  Good stuff.  Good stuff, Ron.  Have we left out anything that you’d like to highlight in particular about HealthTap or about really anything for that matter, anything that you’d like to highlight before we kind of officially conclude the interview?

Ron Gutman:   Absolutely.  So, you know, first of all, thank you for your time…

Scott Nelson:    Yeah.

Ron Gutman:   …and I appreciate the opportunity to tell the HealthTap story.  I enjoyed very much interacting and talking with you, and I want to leave people behind with [00:42:30] the idea of HealthTap is now open to partnering with the medical device companies, with websites, with apps, with diagnostic tool creators, with physicians, with healthcare institutions, to take some of the technology that we’ve built and integrate it into what they’re doing.

We’re providing these partnerships for free.  We want to help these potential partners reduce friction, reduce cost, improve their interaction with their customers and users because we believe, and if you look at our vision and credo, and I encourage you to do that, we said from the very beginning as we started this company that partnerships matter a lot to us, and this is the stage in which we’ll build enough technology that we really want to partner with other players in the healthcare system and create efficiencies and create together products and services that will serve hundreds of millions of people in a great way for everyone.

Scott Nelson:    Okay.  Okay.  And for those listening that either want to maybe simply participate in the HealthTap community on the patient’s side or whether they’re a physician that wants to contribute on the physician’s side, or even a med Sacramento device company that wants to potentially partner with HealthTap, where would you direct them?  Just go to the HealthTap community?  Is that where you would direct them?  Or go to healthtap.com, I’m sorry?  Or where would you direct them to?

Ron Gutman:   Yeah.  So they can go to healthtap.com and look at the main page.  There are three tabs that are telling our story, and they tell the story about who we are, what we make and about working with us together, and they have all the information there about interacting with us partnering with us, using the service as a patient, as a doctor, as a partner, and it’s a very comprehensive three tabs.  So everything that you want to know about what we do, what we make and how to work with us together, everything that you want to know about us is behind these three tabs.

And also, if they want, send us a quick email at info@healthtap.com and we’ll get back to them very quickly and interact with them and provide as much information as we can.

Scott Nelson:    Okay.  Very good.  So there you have it folks, healthtap.com.  That’s just as it sounds, H-E-A-L-T-H-T-A-P as in Paul, so healthtap.com.  So go and check out the website.  It’s actually really cool.  Very interesting technology, definitely disruptive, and I like the idea of removing the friction out of kind of the healthcare process.  So, anyway, very cool.  Thanks a ton, Ron, for coming on.  Really appreciate your time and telling us the HealthTap story.

And I’ll have you hold onto the line here, but that’s it for now folks.  Thanks a ton for listening.  And again I want to mention that if you’re listening to this interview, it’s on iTunes.  You can download all of the interviews for free.  If you do a search on iTunes for Medsider, it’ll come right up.  You can subscribe free to the podcast and those interviews will automatically download to your iTunes account, so it’s a really easy way to listen to this content.  So there you have it.  Until the next Medsider interview.  Take care.  (Music Plays)






 

Having a Heart Attack? There’s an App for That! The Incredible Story of How Dr. David Albert Brought the ECG iPhone App to Market

Close your eyes and imagine the scene with me. You’re at Grandma Betty’s house for a family gathering. Suddenly, Grandma Betty begins to experience chest pain. She’s had some issues with her heart in the past. But could this be it? Could Grandma Betty really be having a heart attack? Your normal reaction would be to call 911, right? Not this time. Instead, you simply pull out your iPhone and use AliveCor’s ECG app to detect Grandma’s heart rhythm. And thankfully, her heart appears to be normal this time.

No, this isn’t a science fiction story. The iPhone ECG app is real…and very close to a FDA approval. In this interview with Dr. David Albert, we learn about his incredible journey in bringing the ECG app to market.

Interview Highlights with Dr. David Albert

  • The amazing story of how AliveCor’s iPhone ECG app helped save a man’s life while on an airplane!
  • What is the iPhone ECG app and how does it actually work?
  • Two disruptive features of the iPhone ECG app: Cloud and Cost
  • The roller coster ride Dr. Albert experienced in his pursuits to develop the ECG app.
  • Five key lessons you can learn from Dr. Albert’s experiences: 1) Be stubborn; 2) Use sounding boards; 3) Protect your IP; 4) Stay patient; and 5) Make a demo.
  • Where does Dr. Albert’s interest in gadgets come from? Hint: It’s personal.
  • Dr. Albert’s advice for ambitious doers: 1) Believe in your ideas; 2) Don’t be afraid to swim against the stream.
  • And much more!

This Is What You Can Do Next

1) You can listen to the interview with David Albert right now:

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2) You can also download the mp3 file of the interview by clicking here.

3) Don’t forget – you can listen to this interview and all of the other Medsider interviews via iTunes.  And if you get a chance, leave us an honest rating and review on iTunes. It really helps out.

4) Read the following transcripts from my interview with David Albert.  Also, feel free to download the transcripts by clicking here.

Who is Dr. David Albert?

David E. Albert, MD is a physician, inventor, and serial entrepreneur who has developed medical and other life-saving technologies and products over the last 30 years, turning a number of those innovations into tech startups. Today, he is a founder of three tech companies, InnovAlarm, Lifetone Technology and AliveCor. His previous startups include Corazonix Corp (sold to Arrhythmia Research Technology) and Data Critical (sold to GE). Dr. Albert left GE in 2004 as Chief Scientist of GE Cardiology to disrupt several new markets. His latest invention, the iPhone ECG, became a global sensation via a 4-minute YouTube Video in January around the Consumer Electronics Show and was featured on local media, ABC, CBS, CNN, and Fox News among many other media outlets. Dr Albert has 32 issued US patents, a large number pending, and several new “secret inventions” in development. He has authored or co-authored over 50 scientific abstracts and publications. Dr. Albert graduated with Honors from Harvard College and from Duke University Medical School.

Read the Interview with Dr. David Albert

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Now here’s your program…

Scott Nelson:    Hello, everyone.  It’s Scott Nelson, and welcome to another edition of Medsider.  This is the site where you can get your personal free personal med tech or medical device MBA.  It’s a show where I bring on dynamic and interesting medical device/med tech stakeholders so we can all learn a few things.  Hopefully, there’s some entertainment value along the way.  And today’s guest is Dr. David Albert.  He is the founder of AliveCor and is infamous amongst other things for the iPhone ECG app that was—I think we’re coming up here on the one-year anniversary of the CEO of iRxReminder.  He is also the vice-president of what I think was dubbed as the unofficial hit of the CES 2011 or the Consumer Electronic Show 2011.  So without further ado, welcome to the call, Dr. Albert.  Appreciate you coming on.

David Albert:      Thank you very much sir, my pleasure.

Scott Nelson:    And so let’s start off.  I mentioned the iPhone ECG app.  Why don’t you briefly tell the story about Dr. Eric Topol and his experience with using your app on a recent flight with the person who was experiencing the heart attack?

David Albert:      Well, it’s an anecdote.  So, Eric, who is a world-renowned physician scientist, would tell you that this is not a clinical study but it was an [00:01:22] anecdote and a Good Samaritan use of our technology.  Dr. Topol had been at the Bethesda at a conference with the National Institutes of Health, which was about two months ago, and left from Dulles Airport headed back to his home of San Diego and the Scripps Institute, when 30 minutes into that flight they came on the overhead PA and said, “Is there a doctor on board?  We have a passenger who is in distress.”  And Dr. Topol had several other physicians with him from Scripps but they were all surgeons, so they said, “Topol, this is your gig.”  So he got up and went to where the passenger was.

And the passenger was a gentleman, who will remain HIPAA-compliant anonymous, who had several years before had a stent placed for a coronary artery obstruction, and at the time in the air the patient had chest discomfort with sweating.  And so, you know, they were trying to figure out if it was serious, what do we need to do?  And so Dr. Topol, after talking to the patient, observing his distress, took out his AliveCor ECG for the iPhone and opened up the gentleman’s shirt and placed it on his anterior chest, and what he told him is, what Dr. Topol said, is that he had 4 or 5 millimeters of ST elevation.  Well, I can just tell you, that’s absolutely diagnostic that the guy was having an acute heart attack.

And so he said immediately, “You have to tell the captain we have to land this plane ASAP.  This man’s having a heart attack and no telling what’s going to happen to him.”  So they did, and they were somewhere near Cincinnati.  I don’t think it was the Cincinnati International Airport, which for those who know is actually in Kentucky.

Scott Nelson:    Yeah.

David Albert:      They landed at some other airport, and the gentleman was removed by the EMTs and taken in and actually had another stent placed, and Eric told me is doing well.  So that’s good news, happy ending.  The not-so-happy-ending part of it was that the plane they landed, which is probably a 767, some larger kind of aircraft going cross-country, could not take off with all the people on the board from the airport they landed at.

Scott Nelson:    [Chuckles]

David Albert:      So Dr. Topol had to bring other planes in to shuttle people up.  He didn’t get to San Diego for 13 more hours in the middle of the night, the plane taking off in the morning, early in the morning.

Scott Nelson:    [Laughs]

David Albert:      So he said, “I don’t think they’re very happy with me.”  But he said, “But the patient’s alive and well,” so all ends well with that story.

Scott Nelson:    Right.

David Albert:      You know, it’s a great story, and I think, you know, we don’t claim that our device should be used to diagnose heart attacks, it’s not really what it was designed for, but in that kind of situation it was an appropriate use, and certainly, when Dr. Topol saw what he saw, there was no question as to what the diagnosis is.

Scott Nelson:    Yeah.

David Albert:      So, it’s not a replacement for a 12-lead ECG, one you get in your doctor’s office or a hospital where they put the electrodes on you, but in this case it was all you needed to know that this man needed urgent care.

Scott Nelson:    Yeah.

David Albert:      So that’s a happy ending.

Scott Nelson:    Yeah, no doubt.  So the passengers on the plane, you know, on one end they were like, “That amazing ECG app,” and then on the flip side they were like, “That damn iPhone app.” [Laughs] It’s causing us [00:04:51]

David Albert:      Yeah, well, we’re all slaves to time.

Scott Nelson:    Yeah, that’s right.

David Albert:      And so, you know, a lot of people had their schedules knocked back by that.

Scott Nelson:    But a life…

David Albert:      You know, I look at it this way.  Dr. Topol had done this many times.  I’ve been involved in a number of these things.  You know, the fact is if that was you or somebody you love, you want that plane landing.

Scott Nelson:    Absolutely.

David Albert:      So, you know, it worked out fine.  And that by the way has been addition to the fact that we have completed three actual clinical studies of our technology now, one at the University of Southern California with Dr. Leslie Saxon, Chief of Cardiology at USC, and two, here at the University of Oklahoma, Dr. Dwight Reynolds, Chief of Cardiology and former President of the Heart Rhythm Society.  And, you know, between Dr. Topol, Dr. Saxon and Dr. Reynolds, these are really world-renowned cardiologists, and the three studies have all resulted in abstracts that we haven’t heard about but have been submitted, and we’re very happy with the results of that data, which is used for our medical device CE mark so that we can sell in Europe, and is being used for our FDA 510(k) applications, which require some clinical efficacy data.

Scott Nelson:    Gotcha.

David Albert:      And so we’ve actually done studies now and I’m happy to say they turned out really well.

Scott Nelson:    Gotcha.  Very cool.  I want to come back and ask you a little bit about kind of that regulatory and reimbursement aspect of your device, but before we get there, people in our audience I have to imagine are thinking, “Wait, wait a second.  Okay, so what I’m getting out of that story is, okay, so Dr. Albert developed an app that can actually read the heart rhythm.”  And yeah, I mean that’s what we’re talking about, and I’ll definitely link up to your famous YouTube video when I post this interview on Medsider, but yeah, I mean patients that you’re used to seeing, you mentioned the 12-lead ECG with the electrodes and the cables, yeah, you basically transformed that sort of technology in a sense, you know, I’m somewhat exaggerating this a little bit, but in essence you transformed that technology into an app on the iPhone.  And so why don’t you just give the audience, give myself, a brief intro into what the iPhone ECG is?

David Albert:      Sure.  And today we also have it working on Android, although it’s not nearly as well-developed as our iOS product.  Currently, we have a case which is going to put the iPhone 4 and the iPhone 4S.  That case is like a case you’d buy in the Apple Store or Verizon, AT and T, wherever you buy your iPhone cases to protect your beautiful loved iPhone.  It has rubbery sides and a hard back, but integrated into the back, the only difference you would notice, it really is no larger than a standard case, is that there are two dull electrodes on the back right underneath where the camera hole is.  And those two electrodes are connected to electronics built into the case to actually measure your electrocardiogram, and you can do that from a number of locations on the body.  And it is then combined with the app, which is a standard iPhone app which receives the wireless data.

So the case actually speaks wirelessly.  You can actually take the case off and have it fixed to 12 inches away from the iPhone and the ECG still shows up on the iPhone.  So it’s wireless connectivity, and that’s important because in medicine we have something called an isolation barrier.  You have to keep what connects the patients and what connects the potentially AC power totally separate with a very high isolation barrier.  And so we talk wirelessly between our case and the iPhone, and then our app takes that wireless data, turns it back into an electrocardiogram, displays it, stores it, and then uploads it to our secure cloud server.

And so, you know, it is an abbreviated part of a 12-lead electrocardiogram.  In fact, when I hold it in my two hands I’m actually recording what’s called lead I, which is left arm minus right arm.  That’s the first lead in a standard 12-lead, and one of our studies we did actually compared lead I from a 12-lead to our lead I, and they’re basically identical.  Ours is slightly noisier because you’re holding it in your hand.  It’s not as good a connection as putting those sticky electrodes on, but otherwise the data is absolutely identical.  And so it’s a combination of a case and an app.

We also have, in a preliminary [00:09:47], what we call our iCard, and there’s a video on YouTube about that, which is a credit-card-size version of the same technology that works with iPhones, Androids, iPads.  It’s basically a version of it that’s not a case.

Scott Nelson:    Gotcha, okay.

David Albert:      It’s the exact same technology, transmits wirelessly.  So that’s the technology.  It allows literally 10 seconds after I finish recording, the ECG will be viewable anywhere in the world securely [00:10:18] through our browser.

Scott Nelson:    Wow.

David Albert:      And that’s another part of the disruptive factor.  It’s available to your doctor almost immediately after you record it.

Scott Nelson:    Gotcha.  And that’s amazing.  I mean, that’s an amazing part, and I love the…

David Albert:      Amazing is a good—we have a lot of people saying “amazing” that just came back from CES 2012 or the mHealth Summit or Medica in Dusseldorf in November, and amazing is, you know, from a lot of people, a lot of companies, even a lot of doctors, they say “amazing,” and you know what?  We’ve worked very hard on this.  And as I mentioned to you earlier before this call…

Scott Nelson:    Yeah.

David Albert:      …this really is an evolution of an idea I had back in the mid-1990s…

Scott Nelson:    Right.

David Albert:      …when the technology wasn’t able to implement what we have today, but the idea was there.

Scott Nelson:    Right.  I’m sure you get that a lot, “This is amazing, Dr. Albert.  This is amazing,” but you used the word “disruptive,” and I think that’s a really good description of kind of the cloud-based ability to view these ECGs, these heart rhythms, anywhere in the world.  So from a practical standpoint of if my grandma has a pacemaker and she took a trip to California and I wanted to make sure her heart rhythm was okay, she used your iPhone app and I was able to view that rhythm wirelessly through the cloud-based browser, so…

David Albert:      It’s funny you said that.  It’s funny you said that because one of our studies at the University of Oklahoma is with pacemakers.  In fact, the last few days I’ve had some people comment on our AliveCor Facebook page that, “How does this work with pacemakers and implantable defibrillators?”  Well, the fact is we’ve used it with no problems with pacemakers.  The device is put into airplane mode, so then the radios are actually turned off, which is, you know, you’re not supposed to walk around with your cell phone right next to your pacemaker, by the way.

Scott Nelson:    Mm-hmm.

David Albert:      And so we turned the radios off, put it in airplane mode as if you were on an airplane, we’re still able to record using our wireless technology.  By the way, that’s pretty cool.

Scott Nelson:    Yeah.

David Albert:      And actually we have a study ongoing, but we’ve already submitted an abstract that we’re able to [00:12:41] if the pacemaker is functioning properly, and that’s really revolutionary.  And know what the most disruptive part of it is?  It’s the fact that the product’s only going to cost $100.

Scott Nelson:    Yeah.

David Albert:      In retail.  So that’s the disruption, is that this kind of technology, is that this kind of capability, this kind of global connectivity, is going to be affordable for anybody.  If you own an iPhone, you’ll be able to afford it.

Scott Nelson:    Right.  Right, and I’m going to use the word, I don’t know how else to describe that, but amazing.  You talked about the disruptive nature of the cloud-based ability to view the rhythm, but that’s another disruptive piece, is the cost.  I mean, really, people spend more at Starbucks probably in a month than they would on this thing, you know, so that’s awesome.

David Albert:      It costs what a pedometer or a—even less than an iPhone-connected blood pressure monitor.

Scott Nelson:    Yeah, because I actually…or go ahead.  Go ahead.

David Albert:      Well, I have the Withings blood pressure monitor and I have the Withings scale, and I love those devices.  They’re great.  They both cost more than this, than our device.  I’ll tell you one thing, Scott, you know a lot of people use this term “mHealth.”

Scott Nelson:    Yeah.

David Albert:      And mHealth’s a great term, I’m a firm believer in, but the reality is what we’re doing and what the AliveCor ECG for iPhone is, is it’s an m-medical device.  mHealth devices are pedometers, scales, blood pressure devices you use, which by the way everyone needs to be using to keep yourself healthy.  The reality is our device is a device for, unfortunately, the hundreds of millions of people around the world; your grandmother with a pacemaker who will have a problem and will need to be monitored.  We need to spend more money staying healthy but the reality is we spend most of our money treating our illnesses.

Scott Nelson:    Right.

David Albert:      So we look at our product as an m-medical device, not just an mHealth device.

Scott Nelson:    Yeah.

David Albert:      And that’s really what’s disruptive, is we’re going to bring a medical-quality, clinical-quality device for less than $100 anywhere in the world, and that to us is exciting in terms of what we’re going to do improve medicine around the world.

Scott Nelson:    Yup.  Yup.  I mean, what I was going to say is I think I bought a Garmin watch, you know, that I think it has Nav and it has the ability to monitor my heart rate, and I think I paid like $200 or $300 for that, you know [laughs], which is two or three times the cost of your device.  So, very cool.  You mentioned you came up with the idea in the early ‘90s.  Let’s dig into that a little bit, and let’s start with, you know, walk us through how you came up with this idea, and then kind of the story behind how you began to see this into fruition and kind of the rollercoaster ride until late 2010, I think, when you posted that YouTube video.

David Albert:      Well, it’s an interesting story actually.  My previous company was called Data Critical, and we were a wireless healthcare company and sold hospital wireless systems, inevitably went public in ’99, and in 2001 sold to General Electric Healthcare.  And in the mid-‘90s, I had an idea that wasn’t exactly in our main product line for a handheld ECG device using a, at the time, state-of-the-art handheld computer, which was a device by a British company called Psion, and it was called a [00:16:32].  And that, inevitably, we got a patent on that device in 1997, and actually an FDA 510(k) around the same time, and that product was called Rhythm-Stat XL.

We really never commercialized that device because as I said, we got it built, we got it FDA-approved, we patented it, but it really wasn’t in our business.  And so that product wasn’t exciting enough at the time because the technology, the handheld computer of 1997, you can’t even compare it.  It’s like comparing a concrete wheel to an Indy racer.

Scott Nelson:    Right.

David Albert:      It’s just not comparable.  So in the mid-2000s, so around 2005, an old-time friend of mine from Australia named Bruce Satchwell had developed a Bluetooth ECG device that worked with, at the time, the state-of-the-art Windows Mobile phone.  And he was selling them to researchers, although there wasn’t really an opportunity.  And Windows Mobile was state-of-the-art at the time, you wouldn’t want to bring one out at a party today unless it was a party of archeologists.

Scott Nelson:    [Laughs].

David Albert:      The fact is that it was hard news.  It had lots of issues.  It was good for researchers.  And so in 2007, when the first iPhone came out, he and I were excited.  We conversed off and on Skype and we were both doing our own thing.  We said, “Wow, this is cool,” and when they opened up the app store and opened up the FBK to allow you to develop apps, I said, “Great.  Bruce, you need to port your Bluetooth device to the iPhone.”  And the only problem was that Apple made their Bluetooth connectivity very controlled, so he could not connect his Bluetooth device to it.

And that was very frustrating because we then saw the 3G, and ultimately the 3GS.  So at the time the 3GS came out, I thought back to my 1997 product Rhythm-Stat XL and I said, “Well, Bruce, I have an idea.”  And so I built a prototype case actually out of a Mophie Juice Pack Air as an extra battery.

Scott Nelson:    [Chuckles]

David Albert:      I took it apart, took all their parts out, put a prototype circuit board in it, and I called Bruce up and I said, “Bruce, your partner there can write iPhone apps.  This is what I need him to do,” and he wrote an iPhone app, and it kind of worked.

Scott Nelson:    Yeah.

David Albert:      And I say kind of worked because it just kind of worked, and this is like 2008, 2009.  So we worked on it a little bit and got to the point where I thought I could go show it to people [00:19:29], again, on a handheld prototype, and I have it right now framed.  My wife for Christmas framed that original prototype in a frame with the Scientific American article from December, where it was named one of the 10 world-changing ideas by Scientific American in the December issue.  And they handed those out, by the way, at CES, which is really [00:19:50] Scientific American [00:19:51].

So I took this around to some of the companies I knew like GE, and they said, “David, it’s kind of cute but we’ve done focus panels, we don’t really think people want to look at their ECG.  We don’t think doctors, you know, they have 12-lead ECGs and GE’s the world leader around that technology,” and having left as Chief Scientist of GE Cardiology in 2004, I totally appreciated that.  So [00:20:15] I don’t have focus groups.  I just thought this was kind of a cool idea.  And so I went off.

Scott Nelson:    Yeah.

David Albert:      And the good news is Bruce and I are both very stubborn sons of guns, okay?

Scott Nelson:    [Laughs]

David Albert:      And so while I had people tell me they didn’t think it was a good idea, I actually got approached by a company, fast-growing venture-funded company that invited me to their headquarters in Houston, and they put up a [00:20:40] fly showing a picture of my prototype and a concept drawing that looked exactly like it, and they said, “We had somebody do this. [00:20:49] It said, ‘Great minds think alike.’”

Scott Nelson:    Ah.

David Albert:      And so what happened there was we were able to get a little seed capital from this company that enabled us to go to China and actually have some prototypes built in 2010.  So in October 2010, took the seed capital from this company, who by the way ultimately decided not to go forward with it.  They later changed their mind but that was too late, sorry.  And so on December 14th, 2010, which happened to be my birthday, I received a box from Hong Kong of 15 prototype iPhone 4 cases, and they were really cool.  They looked really good; five white ones, 10 black ones.

And so I was getting ready to go to the Consumer Electronic Show.  Since the medical company had told me they weren’t interested, I was going to go meet with a consumer company and see if they were interested.  I mean, you could use it as a heart rate monitor…

Scott Nelson:    Yeah.

David Albert:      …if nothing else, and not even mess with the FDA.  And it will be, by the way, incredibly accurate…

Scott Nelson:    Oh yeah.

David Albert:      …[00:21:58] just like a clinical ECG.  So, on December 30th, getting ready to have New Year’s Eve last year, I pulled out one of the cases and I told this story, and you can watch the videos.  At the time, my 13- and 11-year-old sons, really my 11-year-old son, made YouTube videos as he modified his Nerf gun.  There’s a whole cult of Nerf gun modifiers, and so he knew how to do it.  And so when I’d done a couple but I’d done them poorly, he said, “Dad, let me show you how to do this.  You have to talk to the camera.  This is how you do it.  You want to edit it.  You want it to be short.”

And so I listened to my 11-year-old.  I went in my office, I took one of the cases, and I did a 4-minute [00:22:40] vid, no script, no preparation.  And I was sending it to two companies who weren’t going to be at the CES the next week, and I just happened to click the box that said “Post to LinkedIn,” and at the time I had about 500 LinkedIn connections, and I had about 30 Facebook friends and about 20 Twitter followers.

Scott Nelson:    Yeah.

David Albert:      Didn’t have [00:23:03].  You know, I was at the time a 56-year-old guy, not a very socially connected dude.  LinkedIn was my preferred network, business network system that I worked with, and so I just happened to click that, and I uploaded it and I went home, and within 24 hours my life changed.

Scott Nelson:    [Laughs]

David Albert:      You know, that story’s been told now several times in print. My life changed, and you know, whether it was CNN or Good Morning America or Fox or General Electric again or, [00:23:38] basically, name the company, they hounded us.  And so the next year was a whirlwind from forming a company of what was an idea that was no more than a hobby for Bruce and myself to now raising money from the likes of Burrill and Company in San Francisco and Qualcomm, getting absolutely [00:23:57] scrubbed on our intellectual property and technology.  And you know, at the end of the day, we had people from AT and T and Qualcomm and Texas Instruments and GE and Apple who said, “Incredible.  Cool technology.  Well done.”

And so it’s very satisfying that, you know, an idea that began at least 15 years ago could now be realized and will very soon be on the market domestically as well as internationally, and has already shown its value to make life better if not save lives.

Scott Nelson:    Gotcha.

David Albert:      So, to me, that’s the story.

Scott Nelson:    Yeah, that’s great, and there are a few points that I’d really like to highlight and even ask you a couple of questions about that because my big take-away…

David Albert:      Let’s go.

Scott Nelson:    And obviously I’ve seen this story and read about it and it’s been told a lot, but I get questions a lot, emails and even whether it’s a physician or just kind of a med tech entrepreneur that has these ideas.  They’ve got all these great ideas but they’re hesitant to either do anything about them or even share them with people.  And your story is one of a great idea, but if you wouldn’t have ever done anything with it, if you just kept it as that, an idea, and never really kind of persisted and actually built it out, we never would have seen the results and the fruition of your labor.  And so that really stands out, and also your persistence along the way because you mentioned you patented this idea back in the late ‘90s, it blew up in late 2010, in that CES 2011, which is really 2011.  I mean, that’s 11 years, is that right?  No, more than that, whatever that is, 12, 13 years, something like that, of persistence.

David Albert:      Yeah, it’s about 15 years.

Scott Nelson:    Yeah, I mean that speaks to your story, and so what is that kind of kept you going or led you to not just keep this as an idea but actually kept just playing around with it and toying around with it.  And you know, you mentioned that phase where I think you either brought your idea or your concept, your prototype, to a couple of companies that said, “No, we’ve had focus groups and this idea isn’t working,” but you stuck with it.  So are there a few things that you can pinpoint that led you to kind of persist in this?

David Albert:      Yeah, first of all, remember what I said, is that my partner, Bruce Satchwell, and I are both really stubborn guys, okay?

Scott Nelson:    [Laughs]

David Albert:      So, you know, you can’t get this far without—it’s kind of like presidential candidates, I have enough ego to go around.  And so despite having my friends, who I respect a lot, tell me that they’re not sure there’s an idea there, I felt there was, okay?

Scott Nelson:    Mm-hmm.

David Albert:      So mark one up for me, okay?

Scott Nelson:    Right.

David Albert:      I felt there was and that this could have real value, and by the way, it did.  I won.

Scott Nelson:    [Laughs]

David Albert:      So, the notion is being persistent.  Winston Churchill, “Never, never, never give in,” okay?

Scott Nelson:    Yeah.

David Albert:      If you believe you’re right, never give in.  Now, oftentimes, inventors’ pride of fatherhood or motherhood will blind them to the reality that their idea’s just [00:27:42].

Scott Nelson:    Yeah.

David Albert:      Okay, I’ve been doing this a long time.  I have 33 patents.  I’ve sold to companies. I’ve licensed my technologies to lots of people.  So I think I’ve got a pretty good view of what’s valuable, and unlike the people I was talking to, I actually understand—they talk to people who do practice clinical medicine, and I practice clinical medicine so I have a pretty good understanding of how the world works, and that’s an unfair advantage of mine.

Scott Nelson:    Yeah.

David Albert:      And by the way, I want as many unfair advantages as I can get.

Scott Nelson:    [Laughs]

David Albert:      So, understanding technology and understanding the clinical practice of medicine are both tools I use to validate any idea.  And I would tell any hopeful and venturous entrepreneurs out there that they need sounding boards, you know?  Because I’ve made license [00:28:38].  And I have an entrepreneur’s prayer by the way:  “God grant me the wisdom to only make new mistakes,” okay?

Scott Nelson:    [Laughs] Yeah.

David Albert:      And because I’m going to make mistakes, but I don’t want to make old ones.

Scott Nelson:    Yeah.

David Albert:      I only want to make new ones.  And so I would tell them that they need to have sounding boards.  Now, does that mean you tell everybody your idea?  No.  The good news/bad news is The New Patent Reform Act means it’s a race to the Patent Office.  First to file wins, first to invent [00:29:06] and so on.

Scott Nelson:    Yup.

David Albert:      Because that means people need to be filing provisional patents, locking in their filing dates.  They need to learn how to do that, today, whether it’s with legalzoom.com or whatever.  Anybody can do that.  I would always recommend getting professional help.  But you can file a provisional patent application for not a lot of money, and that’s available to people, and I would highly recommend to anybody who thinks they have a patentable idea.

Scott Nelson:    Mm-hmm.

David Albert:      Also, the patent database is online and searchable from a web browser, so you can do a [00:29:47] search, certainly a patent [00:29:49].  Anybody can do it from the local Starbucks.  And so that’s another benefit that I didn’t have 15 years ago, okay?

Scott Nelson:    Yeah.

David Albert:      Or 25 years ago, or 30 years ago when I had my first patent.  So, I would just tell you that you have to be persistent, you need to do your homework and you need to protect your intellectual property.  Those are all pieces.  And you need to have patience.  I think this idea demonstrates that.  Big companies oftentimes don’t catch on [00:30:22].

Scott Nelson:    Mm-hmm.

David Albert:      It’s not in their DNA, okay?  So if what you want to do is sell your brilliant idea to a big company, you better have a lot of patience, and oh, by the way, they understand how to negotiate.

Scott Nelson:    [Laughs]

David Albert:      If they look disinterested even if they’re interested, they have an advantage because [00:30:39] you don’t get what you deserve, you get what you negotiate.

Scott Nelson:    Right, and another cool aspect to this story, too, and one I’d like to point out is that early on you showed your device to big companies, and then even venture capitalists and venture firms, and they basically turned you away.  But the minute it blew up at CES, or through that YouTube video and then at CES, you had venture capitalists and other companies and distributors come begging to you, and so that speaks to the idea that product does matter.

David Albert:      Yeah, I will tell you…

Scott Nelson:    I mean, product really truly matters, you know? [Laughs] The idea of the product matters.

David Albert:      Oh, it absolutely matters.

Scott Nelson:    Yeah.

David Albert:      And by the way, nothing helps like making a demo, okay?

Scott Nelson:    Yeah.

David Albert:      I would tell people, venture capitalists, large-company product people, don’t have the world’s largest supply of vision.  The only way to—oh, so don’t go to them and say, “Imagine if you will.”  Uh-uh, that isn’t going to work.

Scott Nelson:    Mm-hmm.

David Albert:      You need to walk in and put it in their hands.

Scott Nelson:    Right.

David Albert:      In fact, today, the most powerful thing I can do is walk up, and by the way, after—yes, we had some venture guys turn us down because they said, “You know, we don’t think your business model’s sound.  Where’s your reimbursement model?”

Scott Nelson:    Yeah.

David Albert:      “How much are you going to get reimbursed?”  And I looked at them and said, “I don’t want to get reimbursed a dime.”  And they looked at me like I was from another planet.  Now I will tell you, everybody who said that, I’ve been in the medical device business far longer than they have.

Scott Nelson:    Yeah.

David Albert:      And sold many more things than they have.  But that is the [00:32:22] the traditional medical device business in the United States.

Scott Nelson:    Is reimbursement, yeah.

David Albert:      What’s the reimbursement that you wish?  Okay?

Scott Nelson:    Mm-hmm.

David Albert:      And by the way, that got us into the problem we’re in right now, you know.

Scott Nelson:    Yeah.

David Albert:      The people receiving healthcare don’t pay for it, the people describing it don’t know how much it costs, and we’ve run an open [00:32:40] system and now we’ve got big problems, and everyone would understand.  So venture capitalists are even more interested, “Well, how are you going to get reimbursed?”  And oh, by the way, reimbursement, whatever it is, is going to be on an inevitable downward slope.

I can just tell you, you know, I had a very good, close friend of mine, smart doctor, and he said, you know, I said, “What do you think’s going to happen to Medicare?”  He said, “Well, if Obama gets elected, reimbursement’s going to go down, and if Mitt Romney gets elected reimbursement’s going to go down.”

Scott Nelson:    [Laughs]

David Albert:      He said, “So what do you think I’m thinking?  Reimbursement’s going to go down.”

Scott Nelson:    [Laughs]

David Albert:      So, if there’s no money, there’s no money.

Scott Nelson:    Yeah.

David Albert:      There are more people, there are more seniors, less money, and the same amount for more seniors and, you know, less money.  So, reimbursement’s going to go down.  That inevitably is [00:33:29].  Look at companies like Medtronic.  Omar Ishrak, the new CEO, is a friend of mine.  I worked with him at GE.

Scott Nelson:    Ah.

David Albert:      And, you know, he is going to have to re-engineer a company that always thought people would pay more for better care.

Scott Nelson:    Yeah.

David Albert:      And so what I would tell you is, I had venture capitalists who said, “Cool idea technology, but we don’t understand your business model.”  Today I would tell you, I had venture capitalists tell me, “I don’t think your intellectual property’s any good,” and they probably thought that all the way up until Qualcomm, probably the most intellectual property-focused company in the world [00:34:10] intellectual property’s fantastic [00:34:11].  Okay.  That’s the ultimately IP validation.

Scott Nelson:    Right.

David Albert:      Qualcomm’s business model is IP.  So, you know, it’s great to have them as a partner.  We walk into their lobby and there’s [00:34:26] 6503 stories worth of patents, and you understand how they look at the world.  And so we’re very pleased to have them and really pleased to have the people, [00:34:36], Steve Burrill and the people at Burrill and Company who said that, “We like your IP.  We like your business model.  We love your technology.  We think this is going to be a big win.”  And now they’ve had a lot of people, I can tell you, a lot of venture capitalists, all say, “Hey, can we invest?” and they just laugh [00:34:56] or, you know, I just say, [00:34:56] “Well, where were you, you know, [00:34:59] seven months ago?”

Scott Nelson:    Yeah.

David Albert:      So, you know, that just happened.

Scott Nelson:    Yup.

David Albert:      Venture capitalists are lemmings.  They always want to be on the newest hot thing.   But I had a venture capitalist tell me, “I’ll tell you if I’m interested if you tell me who’s interested.”

Scott Nelson:    [Laughs]

David Albert:      That circular logic is not lost on venture capitalists.

Scott Nelson:    Yeah.

David Albert:      So, good news is we’re funded, we have lots of people interested, lots of partners interested, and we basically have our head down now.  Our product’s about to be CE-marked here in the next month or so, introduced in the EU at the end of the first quarter, and then, hopefully we’ll receive our 510(k)s around the middle of the year, introduce it July, I would say, in the United States.

Scott Nelson:    Yeah.

David Albert:      So, really, global introduction in 2012 of our product, and that’s a lot of work, you know.

Scott Nelson:    Oh yeah.

David Albert:      India, China, all over, is a lot of work for a little startup, so we’re awful busy right now.  Just hired a CEO.  She’s been on board two weeks.  She comes from mobile gaming.  She’s a former McKinsey partner, a lot of business organizational strengths, and she’s got her head down now as we try to build up this business and really realize this vision that I kind of had 15 years ago of an ECG in every patient’s and every doctor’s pocket.

Scott Nelson:    Yeah.  And so in terms of your strategy moving forward, you’re obviously not moving towards a reimbursement strategy.  This is a device that anyone can, you know, it’s a hundred bucks, so anyone can pay for it.

David Albert:      That’s right.  We…

Scott Nelson:    How does distribution work?  I mean, will companies be selling this?  Are you primarily relying on like, at least for the iOS platform, are you primarily relying on like the iTunes Store, or what does that look like?

David Albert:      Well, I mean, first of all, for the app on the iPhone version, the apps have to be downloaded from the App Store, okay?

Scott Nelson:    Yup.

David Albert:      For the case part, you can imagine who we’re talking to, who sells a lot of iPhone cases?  They’re cell phone carriers, and there’s the manufacturer of the iPhone who has a firmly significant retail presence both brick and mortar and online.  So, you know, we see distribution as being [00:37:22] from all channels.

Scott Nelson:    Yeah.

David Albert:      I think my CEO, Judy Wade, is much better talking about this than I am.

Scott Nelson:    Yeah.

David Albert:      But you know, obviously, companies like Apple or companies like AT and T or overseas, any of the carriers, are prime candidates.  You’ll be able to buy our products online.  You’ll have to download.  And obviously, when we introduce Android versions, again carriers, stores that carry smartphone accessories and online all become channels to distribute our technology.  I think there’ll also be VARs.  We’ve had a lot of people come to us say, “Can we add value?  Will you license us your tech…?”  Because our technology’s really pretty unique…

Scott Nelson:    Mm-hmm.

David Albert:      We have a lot of people coming saying, “Can you license us your technology?”  And I think we’re considering what we call an alive-inside-type strategy where we license our technology and enable people to be VARs [00:38:22] end solutions and take them through whatever their channels are.

Scott Nelson:    Gotcha.

David Albert:      So, you know, I think if there are home health agencies, that might be a VAR-type channel, and we’re talking to companies in that, as well as fitness and sports.  You know, that’s different than others.  So, I can see a variety of channels.  We’re talking to a lot of people now.  The good news is they’re returning our phone calls.

Scott Nelson:    Yeah.  Yeah, which is a good sign, and I know we’re kind of running short on time and I want to ask you one other question about this story as we kind of reach towards the conclusion.

David Albert:      Well, you wanted to talk about the FDA.  You asked me about the FDA, too, so I can…if you want to talk about regulatory.

Scott Nelson:    [Laughs] You know, I was initially going to ask you about that, about kind of the regulatory strategy and why you’re pursuing two 510(k)s, but we’ll maybe leave that for—well, actually just briefly speak to that because I think that’s an interesting…

David Albert:      Well, it’s very simple.

Scott Nelson:    Yeah.

David Albert:      It’s very simple.  The simple reason for that is that we’re going to be filing a prescriptive 510(k), that is, prescription-only use.  That means a doctor, a nurse, an EMT, because huge numbers of EMTs around the world would be interested for the immediate assessment of, you know, say a victim that’s in a crash and they can’t get the big defibrillator up there.  So that use will be one, and then, the FDA has come out with an over-the-counter ECG recorder category and we’ll be filing for that so that someone can buy it, for instance from the Apple Store or Verizon or AT and T stores, without a prescription.

And so we’re going to file for both 510(k)s.  The [00:39:59] hardware will be identical.  The apps will be slightly different because the FDA has some requirements.  So we’re going to file for two, and that gives us the broadest reach.  So you can go buy one for your grandma with a pacemaker.

Scott Nelson:    Gotcha.

David Albert:      Or, the physician can say, “Mrs. Jones, here’s a prescription, you can go buy one yourself.”

Scott Nelson:    Yup.  That…

David Albert:      So, there you go.

Scott Nelson:    There you go.  That’s, yeah, simple enough.  One is prescription versus one is over-the-counter.  Yeah, that makes sense.  The other question I was going to ask you, and it’s kind of a small story but I think it’s interesting because it’s easy to gloss over, but in late 2010, like the fallish kind of timeframe in 2010 when you went to China to actually have your prototypes built out, I’m curious, it’s easy to gloss over because it seems somewhat monumental.  How do you even go about finding a company in China that would actually build out these models?  And the reason I ask is because I remember hearing an interview with one of the founders of the Zeo who actually…he actually cold called I think the guy who founded the iRobot, like a vacuum thing…

David Albert:    Yup.  Yup.

Scott Nelson:    …and actually that’s how he came across his manufacturer in China.  And so I’m wondering if you kind of follow a similar path or something.

David Albert:    So that was Ben Rubin calling Rodney Brooks, okay?

Scott Nelson:    Gotcha.

David Albert:    And I know Ben.  So what I will tell you is I had already been working with the company we used in China.  That’s why they built those prototypes for free.

Scott Nelson:    Ah, okay.

David Albert:    They actually built them without me paying for it because I had spent a lot of money with them building some consumer safety, health safety products, and so I knew they were very high-quality.  I also knew they had FDA 510(k) approvals and were GNP-compliant, so I knew they could theoretically build an FDA CE-marked medical product, and they also build products for companies like Omron, Nike, Adidas, Timex, so very high-quality consumer and consumer health brands relied on them.  And I knew the senior executives and the senior management, and so I was very fortunate I’d had previous experience, and they’ve been a great partner.  They’re called IDT International in Hong Kong with their [00:42:12] factory in Shenzhen and they’ve been just a first-rate partner for us.

Scott Nelson:    Gotcha.  So, relied on experience and previous business relationships to get that done.

David Albert:    Yeah, relied on previous experience.

Scott Nelson:    Gotcha.  Okay.  Real cool.  Kind of lastly, you’ve got obviously an incredible résumé, an incredible background, a lot of experience, and we can probably go on if you would be willing to give me the time to go on for hours and hours to talk about somebody’s stories, because I imagine there’s even more to uncover, but where does this interest come from?  Because you have your MD.  I mean, I guess, have you ever or are you still clinically practicing?  And where does this interest in these gadgets come from?

David Albert:    No, I haven’t practiced in, well, it’s a long…that’s actually a very long story, okay?

Scott Nelson:    [Laughs]

David Albert:    I was a medical student at Duke University in the late 1970s, and Duke U, after your second year, you get to spend your third year if you want to working in a research lab, and I worked in a research lab.  And at the time, my father had a heart attack, and I came back and saw him as he was convalescing, and as part of his rehabilitation they wanted him to exercise, and he was in his early 70s.  So, they wanted to exercise and say, “Take your heart rate up to a hundred.”

Well, at the time, this is before a Polar chest strap or anything, there really weren’t any heart rate monitors, and so I had a friend of mine who was a classmate, he’d been an undergraduate in biomedical engineering at Duke and he was a classmate in medical school with me, and he introduced me to a grad student at Duke in biomedical engineering.  And that grad student, I paid this guy to build me a heart rate monitor that I could give my dad.  So I paid $200.  Now, you have to understand, if you remember what it’s like being a student, $200 is [00:44:04] amount of money.

Scott Nelson:    [Laughs] Oh yeah.

David Albert:    And I was going to give this to my dad as a present.  Well, it didn’t work.  It didn’t work, and that really pissed me off.  And the guy said, “Hey, dude, you only paid me this much money.  I’m not going to work anymore.”  So I decided that I was going to build it, and that began an inevitable march towards my becoming technically proficient.  And I actually went back to school at Duke and took undergraduate, and then graduate courses in electrical and biomedical engineering, and developed a heart rate monitor that later was the object of a license by Timex, a wrist-based heart rate monitor, really revolutionary.  If you’re familiar with the new [00:44:44] watch, well I had probably the first patent in the whole area of wrist-worn heart rate monitors from 1981.

And then, I developed an ultrasound machine at the same time I’m finishing medical school and going to practice.  So I then came back to the University of Oklahoma for training and, inevitably, realized that maybe I had some skill at this inventing thing.

Scott Nelson:    Yeah.

David Albert:    And so I decided that I essentially drop out of practicing and start a company, and I did.  I sold the first company, and then I started the second company and inevitably sold that to GE and started the third company, and who knows where this is going to end.  But I have to tell you one secret.

Scott Nelson:    [Laughs]

David Albert:    I promised my wife of 27 going on 28 years that this would be my last startup.

Scott Nelson:    [Laughs]

David Albert:    Because I’m going to tell you, a startup is way too hard and you really need to be a young man like Ben Rubin in his 20s or in your 30s to do a startup, not a guy in his mid- to late 50s.  So this is probably my last startup.  But it helps that I’ve had a lot of experience, that I can call up the people at GE or Philips or Medtronic.  They know me very well, and I can absolutely say that today when I say something somebody usually takes my word for it, let’s put it that way.

Scott Nelson:    Right.

David Albert:    So that, you know, was a long story and it wasn’t a direct path.  It was kind of a circuitous path how I got where I am today, but today I’m just known as Dr. Dave…

Scott Nelson:    Yeah.  That’s right.

David Albert:    …probably the gadget guy, and you know my mantra, saving lives one invention at a time.

Scott Nelson:    Right.

David Albert:    So that’s my personal mantra [00:46:37].

Scott Nelson:    No, I like that.  I like the fact that you told a story about your wife, how she stuck [laughs]…she’s ridden the train, she’s ridden the rollercoaster.  It’s 27, 28 years now.  That’s a testament in and of itself.  That’s great.  That’s great to hear.  Yeah.

David Albert:    [Laughs] Four children and three companies later, we’re still married.

Scott Nelson:    [Laughs]

David Albert:    So we’ve got something going for us.

Scott Nelson:    I laugh, but that truly is a testament to a quality relationship that stands the startup life.

David Albert:    God, I married way over my head.

Scott Nelson:    [Laughs]

David Albert:    So I’m blessed to have married way over my head.  But I appreciate your interview and I appreciate this, and thank you for the time.

Scott Nelson:    No, absolutely.  And just really quickly before I officially hit kind of the stop record button, people listening to this, I’m sure they’re thinking, what an incredible story, you know, like I said earlier, amazing technology, what’s the one piece of advice that you’d leave someone that’s listening to this if you can narrow it down to just one thing?

David Albert:    Well, I think, believe in your ideas, okay?

Scott Nelson:    Yeah.

David Albert:    And I talk about [00:47:46] innovation, and that is, most of the time people in a given area are all going in the same direction, and I have had great success now multiple times by standing at 90 degrees to their perspective and looking and saying, “Is there a different way to look at this?”  And oftentimes people, like the people I talk to, will say, “Oh no, no, that’s not going to work.”  That’s alright.  That doesn’t mean it’s not going to work.  That just means that you’re not basically ruled by conventional wisdom.

Scott Nelson:    Yup.

David Albert:    Don’t be governed by conventional wisdom.  Stick to your guns.  Believe in what you’re doing.

Scott Nelson:    Awesome.  I love the swim against the stream aspect.  So, anyway, I know you have to get going, but thanks a ton for doing the interview, Dr. Albert.

David Albert:    My pleasure.

Scott Nelson:    Really appreciate you coming on.  And for everyone listening, thanks for your attention.  Dr. Albert, where would you direct the audience to if they want to learn more about AliveCor, about iPhone ECG or even just to come into contact with you?

David Albert:    Well, you could Google it but you can certainly send me an email.  I actually give out my email.

Scott Nelson:    Mm-hmm.

David Albert:    I’m drdave, D-R-D-A-V-E, @alivecor.com, that’s A-L-I-V-E-C-O-R dot com.  Go to our website, www.alivecor.com, register your email, and we’ll keep you posted with updates to our products.  And then if you Google search it, they’ll find lots of articles and videos on YouTube, and I think you can learn a lot more.  We have a lot of new things coming out in 2012, so it’ll be an exciting time for us.

Scott Nelson:    Awesome.  Awesome.  So there you have it folks.  Thanks again for listening, and again, just a quick reminder, if you want easy access to the interviews, Medsider interviews are on the iTunes Store, so just do a search on the iTunes Store for Medsider, the free podcast will come up.  You can download the podcast for free.  That way the interviews will automatically sync to your iTunes account without you having to do anything.  So there you have it.  Thanks again , Dr. Albert, for coming on.  Really appreciate it.  Until the next…

David Albert:    Scott, my pleasure.

Scott Nelson:    Yeah, absolutely.  Until the next episode of Medsider, everyone take care.

David Albert:    Thank you.  Thank you, Scott.

[End of Recording]

 

How to Facilitate Open Innovation in the Medical Device Space

Peter von Dyck was frustrated.  When trying to commercialize his latest medical device, it had simply become too inefficient to navigate through various sectors within the fractured medical device ecosystem. So what did Peter do? He created a system to solve this major dilema. In this interview with Peter von Dyck, we learn how e-Zassi is transforming the way medical device companies, innovators, researchers, and investors connect and collaborate in an effort to generate powerful new efficiencies in the development and commercialization of life-saving medical technologies.

Interview Highlights with Peter von Dyck

  • Peter’s amazing start in the medical device space.  He got started at the age of 18!
  • Peter’s frustrations with medical device commercialization which led to the birth of e-Zassi.
  • How to use the e-Zassi system to facilitate medical device development.
  • Why are medical device companies private-labeling the e-Zassi system?
  • Trends that Peter is seeing within the medical device arena as it pertains to the regulatory and funding environments.
  • Peter’s advice for ambitious medical device doers.
  • And much more!

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4) Read the following transcripts from my interview with Peter von Dyck.  Also, feel free to download the transcripts by clicking here.

Who is Peter von Dyck?

Medsider Interview with Peter von DyckPeter von Dyck is the Chairman and CEO of e-Zassi, a first-of-its-kind online community that enables the medical device industry to quickly and efficiently identify acquisition, licensing, and collaboration opportunities. An accomplished medical device inventor and entrepreneur with numerous patents and multiple inventions, Peter has identified industry trends, challenges, and the mission-critical considerations required to bring breakthrough medical technologies to market. Among his many honors, Peter was named the 2000 Florida Entrepreneur of the Year in the area of healthcare and life sciences by Ernst & Young. He was also recognized as a leading entrepreneur by former Florida Gov. Jeb Bush, who awarded him the Business Diversification Award for Entrepreneurship in 2003. In 2004, he was named by Medical Device & Diagnostic Industry magazine one of the 100 Most Notable People making a material difference in the global medical device industry.

Don’t forget to check out e-Zassi’s sample InnoVision report.

Read the Interview with Peter von Dyck

Peter von Dyck was frustrated.  It had simply become too inefficient to navigate through various sectors within the fractured medical device ecosystem.  So what did Peter do?  He created a system to solve this major dilemma.  In this interview with Peter Von Dyck, we learn how e-Zassi is transforming the way medical device companies, innovators, researchers, and investors connect and collaborate in an effort to generate powerful new efficiencies in the development and commercialization of life-saving medical technologies.  This is what we’re going to learn in this interview with Peter:  Peter’s amazing start in the medical device space.  He gets started at the age of 18.  Can you believe that?  Peter’s frustrations with medical device commercialization, which led to the birth of e-Zassi.  How to use the e-Zassi system to facilitate medical device development.  Trends that Peter’s seeing within the medical device arena as it pertains to the regulatory and funding environments.  Of course, there’s much more to glean from this interview, but before we dig in, you need to listen to these brief messages from our sponsors.  And by the way, if you’re interested in becoming a Medsider sponsor, our 2012 sponsorships are now open.  Go to medsider.com/sponsor.  Again, that’s medsider.com/sponsor.  Now, listen up.  First, did you know that venture capitalists are extremely hesitant to fund a start-up medical device company with a direct sales force?  Yes, you heard that right.  You see, VCs think direct sales forces add too much bloat to medical device companies.  That’s why you need to check out covasc.com.  They have a lean sales model that is garnering some big attention within the medical device world.  Interested?  Check out covasc.com.  That’s C-O- V as in Victor-A- S- C dot com.  Second, if you’re listening to this, you’re probably on LinkedIn.  Would you like to know how to land your next gig using LinkedIn?  How about connections?  Would you like to learn how to connect with key decision-makers?  Perhaps you might want to know how to leverage LinkedIn in order to gain maximum exposure.  Go to medsider.com/linkedin.  It’s our first course in collaboration with Lewis Howes who has written two books on how to effectively use LinkedIn.  Go check it out, medsider.com/linkedin.  Now, here’s your program.

 

Scott Nelson:    Hello, everyone.  It’s Scott Nelson, and welcome to another edition of Medsider, and for those of you who are new to the program, Medsider is a program where I interview interesting and dynamic medical device stakeholders so we can all learn a few things.  Hopefully, there’s some entertainment value along the way.  And today’s guest is Peter Von Dyck.  He is currently the CEO of e-Zassi.  So welcome to the call, Peter.

Peter Von Dyck:        Thank you very much.  Good to be here.

Scott Nelson:    So let’s start with first who you are, your current role, and then we’ll dig into your background a little bit because I want the audience to get a feel for your résumé, for lack of a better description.

Peter Von Dyck:        Yeah, my name is Peter Von Dyck and I’ve been active in the medical device marketplace for the last 20 years.  I’m 42 years old right now, and I was fortunate to get a real early start in it back when I was 18, and presently I’m running a software company that specializes in business intelligence and collaboration software to foster open innovation in the medical device space.

Scott Nelson:    Okay, and we’ll definitely dig into that company, which is e-Zassi, but your background, you mentioned you got started at, if my numbers are right, in your, you said 18?

Peter Von Dyck:        Mm-hmm.  That’s right.

Scott Nelson:    You said you started at 18.  That’s incredibly young.  Can you provide a little bit more detail regarding that?

Peter Von Dyck:        Absolutely.  At that time, my father had started a polymer company and was making customized medical device [00:04:13] catheters for OEM clients in the med tech area, and I kind of got to grow up inside the machine shop at age 18 building tools and dyes or actually breaking tools and dyes and [00:04:25] lays and learning how to make these molds that would in essence create the structural platform for these medical devices, and then I moved on into actually assembly and manufacturing, quality control, and eventually started learning a lot about the technology, then moving into R and D, and then product development.

Scott Nelson:    Okay.  So you have a broad variety of experiences kind of behind the scenes, I guess, for lack of a better description.

Peter Von Dyck:        Yup.

Scott Nelson:    Cool.

Peter Von Dyck:        From the ground up.

Scott Nelson:    So directly prior to e-Zassi, what were you doing?

Peter Von Dyck:        Well, prior to that I had another company that I founded in 1997 when I was 28.  That one was called Zassi Medical Evolutions, and there we actually took some of my own inventions in the medical device as well as some others that were innovated by third parties such as surgeons and physicians, and I combined intellectual properties up and developed brand-new first-in-class medical devices and took them through development and into commercialization and successfully sold that company off for 15 times revenue in 2006.

Scott Nelson:    So that was sort of a medical device incubator in a way, is that how you would describe it?

Peter Von Dyck:        You know, in a sense, but really it was more of a startup.  It was dedicated to a platform of two products that were gastrointestinal in nature and catheter-based, and so we were more of a pure-play startup company and we secured angel money and other venture capital, and moved forward like any startup company and actually built it and [00:05:54] got the products through animal testing, human testing, FDA, scaled for manufacturing, and then ultimately marketed it around the world.

Scott Nelson:    Okay.  And this helped your experiences in this sort of world from product development to identifying opportunities within certain medical device niches, etc.  That led to e-Zassi.

Peter Von Dyck:        That is correct.  Basically, I think the inefficiencies and the frustrations that I felt and encountered along the way with in particular my own startup companies in the med tech arena are the ones that really began to show me that there needed to be a better business method, and then simultaneously the development of the Internet around this over the last 10 years and new digital horsepower, that also really fueled me to say, “We can do this a better, cheaper, faster way.”

Scott Nelson:    Okay, better, cheaper, faster.  I recently actually read a book, I think that was the title of it, by David Siteman Garland, so, interesting.

Peter Von Dyck:        Mm-hmm.

Scott Nelson:    It triggered a thought.  Better, faster, cheaper, that always makes for an interesting conversation.

Peter Von Dyck:        Mm-hmm.

Scott Nelson:    So let’s dig right into e-Zassi.  Can you give me like an elevator pitch for what you folks do?

Peter Von Dyck:        Yeah, e-Zassi provides two important things for those in the medical device ecosystem.  Primarily, it helps in collaboration and networking.  So, one portion of the product line is a way for innovators, developers, OEMs, financiers, all those key parties in the medical device arena to collaborate much easier and earlier in the development process, because obviously it’s almost impossible to take a new idea or a napkin-sketch product all the way through into commercialization alone.  You need to have a tremendous amount of partnerships and partners as you go along, and building that network is very time-consuming, very expensive, and part serendipity and not very well-organized because our market is so fractured.  So our network is dedicated to medical device development and innovations.

The second part we do is another key ingredient.  We provide business intelligence and decision support.  That kind of software means that we have decision support engines that allow those in groups to analyze that medical device at its infancy and really understand its future burdens and opportunities, such as our system actually calculates the regulatory classifications that this product would fall under years before it may even need to undergo FDA scrutiny, and having that knowledge so early in the design process and in the capitalization process actually allows better planning and execution.

So that’s what we mean by business intelligence and decision support, and all of these systems are integrated at e-zassi.com, and so users can use it for collaboration and business intelligence, and then the real 800-pound gorilla that we solved that was a big problem in our industry was confidentiality and overdisclosure.  Basically, unlike other social networks and sites that consumers use, the medical device industry is propped up by confidentiality and patents.

Scott Nelson:    Mm-hmm.

Peter Von Dyck:        When you’re a patent-centric marketplace, you’re paranoid about overdisclosure.  So you need to disclose, you need to form partners, you need to tell people about what you’re developing, but you’re scared to do it because overdisclosure could mean that you lose your barrier to entry and your patent rights.  My system, e-zassi.com, is the only system that converge confidential matter into nonconfidential matter so that the power of the Internet can be leveraged to connect the parties to each other without either party having any confidential or patent risks.

Scott Nelson:    Okay.  And while we’re on that subject of overcoming that IP nondisclosure agreement issue, how are you able to do that through the e-Zassi platform?

Peter Von Dyck:        Well, I can’t tell you all of it or I’d have to kill you [00:09:47]

Scott Nelson:    [Laughs]

Peter Von Dyck:        …but just not to violate my own intellectual property, of course, you know…

Scott Nelson:    Sure.

Peter Von Dyck:        But generally speaking, we have a business method and approach built into a proprietary analog system that basically allows the user to populate the input in our software using a question-and-answer-based system.  So, in other words, we ask questions, we provide all the answers, and the user selects from these answers.

Scott Nelson:    Okay.

Peter Von Dyck:        And that actually creates what we call DNA or device network attributes which are nonconfidential in nature but highly informative, and then we actually put those into play to power the digital products.

Scott Nelson:    Okay.  And so anyone who is actually inputting this information in order to generate some of this business intelligence, there’s almost like a built-in nondisclosure agreement into this process then.  Am I saying that correctly?

Peter Von Dyck:        I don’t know with the built-in.  It’s not far off.  I think the proper way to put it would be that the system doesn’t allow the use of confidential matter because we control the input of all content, and none of it actually can be confidential.

Scott Nelson:    Okay.

Peter Von Dyck:        We actually prevent it.

Scott Nelson:    Okay.  So let’s dig into the main two components, the network, and then also the kind of the decision support/business intelligent components a little bit further, and maybe it would be best to start with the business intelligence.  So, say I’m a physician-entrepreneur or maybe an engineer that has an idea for a medical device and I want to take advantage of the e-Zassi platform, can we just start there and maybe take us through a kind of like a little bit of a systematic approach to your solution?

Peter Von Dyck:        Yeah, absolutely.  The primary decision support product we have is called the InnoVision Report, and it’s InnoVision because it actually provides forward-looking thinking and it also serves as almost a checklist for people early in development to make sure that they’ve thought everything through, which is very difficult with medical devices.

And so ultimately our Q and A that unfolds to the user as they use the software asks you a series of compelling questions, which are dynamically fired depending on your answer selection so they’re never the same, and they’re built around all different types of potential scenarios within medical devices, i.e., it’s looking to understand if this product of yours is potentially a Class I product or Class II or Class III, and would it go the PMA route, what size market potential it may have, what type of call pattern this would require, and if it would be a change in practice by the end users, which of course would add to all the difficulty in commercialization.

But ultimately, what it’s geared towards is to level the playing field between the innovation side of the ledger and those that finance and commercialize products, and what’s missing between both sides is they really don’t have the same understanding and knowledge about a device even though both parties need the content.  So the system actually provides that for users in minutes once they finish the Q and A.

Scott Nelson:    Okay.  And so the old way, the way that you did it leading up to building the e-Zassi platform, you would have to go to each individual expert in order to basically build this checklist, this decision support tool, right?

Peter Von Dyck:        Well, yeah, or more importantly I’d say, to build an accurate development plan, clinical plan, and commercialization plan, or as the buy side would refer it, a due diligence checklist.

Scott Nelson:    Okay.

Peter Von Dyck:        And so, basically, we provide all that for both parties, and that’s very difficult.  And you’re correct, it would take 10 or 15 different types of experts, you know, a regulatory expert, a manufacturing expert, etc. to come together to create the same content that’s available on this report within minutes and actually populated by somebody who does not possess skill sets in any of those areas.

Scott Nelson:    Okay.  And I want to mention it now because I checked this out online on your website, and I’ll link up to this when our interview is posted, but you offer a sample InnoVision—am I  pronouncing that correctly, InnoVision?

Peter Von Dyck:        You are, yes.

Scott Nelson:    You offer a sample report right there on your website, and like I said, we’ll link up to that, but it’s really unique, it’s really interesting.

Peter Von Dyck:        Yes.

Scott Nelson:    And so I would encourage everyone to check that out because it’s definitely worth a look.  So from there, so say I’ve got this idea on that, I’ve gone through the InnoVision Report analysis and I’ve got my checklist, so to speak, what happens next?  How does that network come into play?

Peter Von Dyck:        Okay.  It’s a good segue.  I mean, basically a couple of things happen with that report.  Besides the fact that you now have arguably content and knowledge you did not have about your own idea or technology, it’s now been digitized concurrently.  So, this InnoVision Report is now injectable into the e-Zassi network with a click of the button, and so basically all the digital content within this report, every word is search-engine-optimized so that as it’s injected into the e-Zassi network everyone who is using the e-Zassi network’s search and match feature can find this technology with very specific criteria, criteria that neither Google nor Bing would allow.

So, for instance, if a venture capitalist was looking for a technology for benign prostatic hyperplasia in North America at a level of maturity that here she desires making sure it’s not a 510(k) or PMA, you know, something like that, whatever specific criteria they have, Bing and Google would fail to deliver any relevant search results there.

Scott Nelson:    Okay.

Peter Von Dyck:        The e-Zassi system would because it took your content and digitized it so that it could be found under a very specific medical devices basis, and then that same content actually goes into abstract form and is put out onto the worldwide web so that a larger audience beyond the e-Zassi network can also find you and your technology.  And keep in mind, all this content, while it’s digitized, it’s all nonconfidential, so you have no risk of losing your IP.

Scott Nelson:    Okay.  Okay.  And can you explain a little bit of a background behind this whole business network?  I mean, the obvious idea is that it allows the users to kind of get their idea out into the open to gain interest from, you know, to use your example, venture capitalists, some other part of kind of the medical device ecosystem, but can you explain a little bit of the background as to how that aspect came about?

Peter Von Dyck:        Yeah, mainly because of what’s increasingly now called open innovation, and it’s happening in all areas of the world.  But basically, what open innovation means is of course that companies now, not so much VCs, companies, are actually now getting most of their new products from the outside and they’re doing less and less internal R and D, especially as budgets catch up, and also they’re just growing up and recognizing that you can do all the R and D you want on the inside, and you should, but you’re never going to really uncover all the great ideas.  You’re going to be beat by the world, and so you might as well fish from that pond.

And so the leading companies, big and small, are creating business development departments and venture arms and embracing open innovation software where they can now go out and in essence shop for ideas of all different maturities and types and bring them in to build up their R and D pipeline, and so this buy-sell marketplace is really on fire because of open innovation, and of course, the thirst for new products is very high by established companies.  And of course, the other side of the ledger, the creation side, the innovation side, has always been robust.

Scott Nelson:    Mm-hmm.

Peter Von Dyck:        You can’t stop innovation and entrepreneurship, so there’s always been a supply of new ideas.  The problem is there’s not really been the thirst that we see now for new products, and so they’re using, no surprise, increasingly digital mediums to do it.  You can only go to so many trade shows and sit behind so many booths.

Scott Nelson:    Right.

Peter Von Dyck:        And, you know, that’s kind of very efficient.  It’s better to use the web to go and find the next great idea.

Scott Nelson:    Yeah.  You can’t see me now but I’m nodding my head to that answer because I love the idea of bringing web 2.0 and, you know, even the web 3.0 methodologies to this whole process because the medical device sector you’d probably agree is oftentimes so far behind the wheel when it comes to using some of these newer technologies to make processes more efficient, and so I love that aspect of it.

And so the business network component of e-Zassi is not necessarily a chicken and an egg sort of concept, because ideally you have a large business network looking at these different ideas on a frequent basis.  But because all of your abstracts are SEO, or the SEO is built right in, someone doesn’t necessarily have to be on the e-Zassi network in order to find that idea.  Am I understanding that right?

Peter Von Dyck:        You are.  That’s correct.  I mean, we knew that for a small company like us to build a vast network with a million eyeballs, as they say, would take a lot of time.

Scott Nelson:    Mm-hmm.

Peter Von Dyck:        And so basically having us also serve as the conduit to SEO your own content to do it safely is another great service we provide, and that way now, we’re in essence helping you market your stuff around the world, and that’s a great value.

Scott Nelson:    Yeah.  Yeah, no doubt.  Because initially when some talks about the community and the business network, it’s almost like it always has to be built sort of organically, and then you run into this, like I said before, the chicken and egg concept that, say I’ve never heard of e-Zassi in the Google or Bing and I type in, you know, some sort of medical terminology for a product, there’s a chance that I could find an e-Zassi-generated abstract, right?

Peter Von Dyck:        Yeah, absolutely.

Scott Nelson:    Okay.

Peter Von Dyck:        But you have to be in it to win it, obviously, so if you haven’t been converted and digitized with the e-Zassi product, of course that may never happen and you’re going to be lost and probably passed over.

Scott Nelson:    Yeah.

Peter Von Dyck:        But keep in mind the business intelligence products that we sell, the innovation, you know, you don’t need a network component there.  A lot of people buy that just for that purpose…

Scott Nelson:    Just for that.

Peter Von Dyck:        …to give themselves that intelligence and that planning capability.  A lot of universities do it, a lot of incubators, venture labs, entrepreneurs, and even large companies are buying it for their own intelligence.

Scott Nelson:    Okay.  Let’s talk about that.  Is that the primary income generation sort of model for e-Zassi, that [00:20:57] software product?

Peter Von Dyck:        Well, it’s kind of a balance of both right now.  I think when we launched in late ’09 and then ’10, we went out with a network focus and put more emphasis there, but we were pretty [00:21:11] mature, I think, that people weren’t even fully on LinkedIn yet and they were kind of down on social networks, and of course that’s not the case today.  Now those are all very hot and going public, and the social elements are very popular.  But we were certainly a little ahead of the game there, so we did shift and put more emphasis on the business intelligence product and selling that to, you know, universities and companies.

And now what’s really interesting in the latest application, it’s really exciting, is that there are new breeds of companies now that are taking our InnoVision product and putting it on their website as a web app right on their main page, and it basically says, you know, if you’re a medium or large company—I mean they put it on their site and they say to outsiders, if you have an idea, click here.  And then, basically, they use my InnoVision system to assess a third party’s idea while shielding their own company from confidentiality infiltration, protecting both parties from overdisclosure, and of course, ultimately getting an assessment on a device without doing any human interface.  And so we’re actually being slapped on as a web app on some of the biggest-name companies in the world as we speak, and that’s a very exciting new development.

Scott Nelson:    No kidding.  I never would have guessed that.  So that must be driven from like a pretty consistent request by the large medical device companies, we can all name a few, but them getting requests from entrepreneurs or physicians or engineers, etc., saying, “Hey, I’ve got this great idea.  I want to share it with you.”  This is their way to sort of filter out some of those group conversations.

Peter Von Dyck:        Yeah, and it’s a multiple thing.  It’s filtered out, [00:22:56] to your point exactly.  Because let’s face it, probably 90% of the things they see they’re not going to move on, but they can’t afford not to see them because they don’t know when the pearl is going to be there.  And so they have to actually see these.  So they want to draw traffic into their website.  They know that’s the best way to attract attention and collect new ideas.

They’re in a race for that, but they also know there’s going to be a high rejection rate and they don’t want to sign a thousand nondisclosure agreements, and they don’t want to do diligence manually with 10 top executives, each idea, and they don’t have the time or money.  And so they’re looking for software to do it, and I’m presently the only system in the world that can capture and assess new technology through electronic submission.

Scott Nelson:    That’s very cool.  What else have we missed?  I mean, I’m going to certainly give you an opportunity to direct the audience to your website and I guess wherever you want to direct them to, but is there anything that we’ve missed that stands out to you, maybe what you’re doing currently that’s new at e-Zassi beyond kind of this private labeling aspect of your InnoVision software?  Is there anything that we’ve missed?

Peter Von Dyck:        Well, I’d say I don’t think you missed much.  I think it really comes down to the combination of a huge group of trends here that there’s a buy-sell marketplace [00:24:15] now because of open innovation, and that’s really very synergistic and just from a national perspective, too, very important that we bring that together and make that more efficient.

Because when I was doing my medical device companies, for instance I was working on a product that my own family member needed, and it just took so long to bring the network together and what I needed to build that product, I couldn’t save her in time, actually, and that’s what the company is named after.  It’s actually named after my sister who was in a coma for a decade and was getting infections and things that are now preventable with some products I brought to market in infection control, etc.

But the process was so slow, and we need to recognize that when it’s so slow or because great ideas can’t make it through the gauntlet because of its complexity, people die and people get hurt and their lifestyles stay bad, [00:25:07] and/or products move to other countries and that’s a shame.  And so, I think ultimately what e-Zassi represents is ability to make sure the best ideas get seen, get heard, get assessed, and have a better shot at getting connected with the people that can bring it to market.

Scott Nelson:    Right.  And let’s take that opportunity right now.  For those listening that want to learn more about e-Zassi, where do you recommend they go?

Peter Von Dyck:        Oh, could you repeat the question, I’m sorry?

Scott Nelson:    For those listening to this interview right now, where would you direct them if they want to learn more about e-Zassi and what you guys are doing, just your website?

Peter Von Dyck:        Well, I mean, yeah, feel free to give my email out as well.  They can contact me or they can contact us on e-zassi.com.  But certainly there are several public pages that they can read and even apply for perhaps a provisional membership, and we definitely make a lot of our product samples available, but otherwise if they’d like to reach out to us, they can just contact us and I’ll be glad to answer their questions more efficiently.

Scott Nelson:    Okay, and the website’s e-zassi.com, that’s Z-A-S-S-I.  So E hyphen Z as in zebra, A-S-S-I dot com., e-zassi.com.  And definitely take Peter up on that offer to contact him directly should you have any questions or potentially want to partner or use their platform.

Speaking of some of the open innovation trends, and you mentioned even the downside to the fact that some of these innovations, some of these ideas, never get generated or never get seen, it really impacts patients, and you can almost see kind of the ramifications when you hear stories about how patients are going overseas to Europe to get a certain device because that device has a CE mark in Europe but it’s not approved by the FDA here in the US.  Can you speak to some of those trends maybe that you’re seeing right now kind of in the medical device arena?  And certainly, feel free to add your own opinion based on your 20-plus years operating this system.

Peter Von Dyck:        Yeah, I mean, you’re correct.  Obviously, it’s different now in what it takes to innovate and bring things to market, and there’s been a perfect storm of change the last few years to make it even more difficult and I think erased the need for an e-Zassi, but ultimately you’re right.  The regulatory market and the combination of the economic market have created such uncertainty, there’s a lack of movement in terms of certain types of deal flow and certainly financing on the early-stage side that has made those entrepreneurs and small companies rethink things.

And so one of the things that used to be out of vogue up until recently was a US company, for instance, or the US-based innovation spending any time or any of that precious capital doing anything in Europe.  That was considered just playing around, and all the VCs would tell you, “Don’t go near that, just exploit your product in America, that’s 50% of the market plus.”

And now, of course, they’re singing a different song and they should be.  Now, an entrepreneur has to say, “Where can I get [00:28:18] data fast?”  And now that venture capital tranches are getting smaller and tighter in terms of what they require in terms of data before you can get another tranche of money, they require more for less, and so we’re forced as entrepreneurs now to look at the global market and say, “Where can I get this done faster and cheaper?”

And no surprise given our regulatory environment and our capitalization environment, we have to look abroad, and I think Europe is a logical choice.  I personally did that myself in 2006.  With my technology, I went to Europe and got my data and my first revenues there, and it was highly successful for me, and that was well before it was a trend.  And now I think more and more companies are moving in that direction, you know, and I just hope that the companies born in America can obviously still hold on to the ownership and keep it a US product, but there’s certainly a need to do things differently.

Scott Nelson:    No doubt.  And to your point, are you seeing that more and more companies are not only trying to make an impact in Europe first but also potentially IPOing overseas versus the US as well in order to obtain funding?

Peter Von Dyck:        Well, the IPO is a potential.  The foreign IPOs, you do see some of that, whether it be Australia or Europe, you know, with a US company, etc., and that could be a way to get some financing there.  Their IPO market is still a little bit more like ours used to be a long time ago.  It’s a little bit more of the new ventures and the entrepreneurship, but you know, versus the big established company like here in the US.

And I think that will be the trend, but right now I think most companies are not falling in that area. [00:30:06] If they’re that mature to qualify for an IPO anywhere, they’re probably generally okay compared to the ones that are much younger that are [00:30:13] at tougher selection points and lower levels of maturity where an IPO even in those markets is going to be difficult.  Not impossible but difficult.

And so I think it’s that angel [00:30:23] grant money and VC that everyone’s still seeking, and that’s where Europe is doing better as well.  They’ve kind of got a little more VC stuff going.  They have proven they’re a lot cheaper to develop products out there, and it’s going to provide a lot of value for Europe going forward until the US can resolve some of our uncertainties here.

Scott Nelson:    Sure.  Okay.  And let’s kind of conclude it here, because I know we’re running short on time, with maybe just some advices to would-be entrepreneurs that are listening to the call that are operating in the medical device space, ambitious doers, as I like to call certain people that are listening to this interview.

Peter Von Dyck:        Mm-hmm.

Scott Nelson:    Are there one or two pieces of advice that you’d like to leave them with?

Peter Von Dyck:        Yeah, I mean, I would say obviously don’t give up, and you have to think big and you have to think globally from day one.  I mean, I think those would be my general advices, that you have to be equally creative about your business model as you do about your technology that you’re probably already passionate about.  And so, if you don’t have that acumen, you also have to partner up with someone who does.  And don’t waste time with that or be insulted.  Go ahead and build that team.

Because I noticed when I started my company at age 28 without a degree and as a college dropout, obviously not very popular among VCs who expected MBAs and degrees, and so the first thing I did was build a team around me that solved my deficits, and that’s important.  So you really want to look down at yourself from 10,000 feet, from other people’s eyes, and let them see where you’re strong, where you’re weak, and then you want to be honest and address this quickly by building a great little team, and be flexible and highly adaptive with your business model, and think globally.  The world is your oyster and there’s a lot of potential there that you can leverage, and you can no longer be afraid to try all that.

Scott Nelson:    Gotcha.  Very good.  Alright, excellent.  Thanks a ton, Peter, for your time.  I really appreciate you filling us in on not only your very unique e-Zassi platform but also sharing some of your insights in regard to the current happenings in the medical device space.  Really appreciate you coming on.

Peter Von Dyck:        You’re welcome.

Scott Nelson:    And for everyone listening, again that’s e-zassi.com, E-Z-A-S-S-I dot com.  I encourage everyone to check out some of those sample reports of the InnoVision.  Some really cool intel there.  So, very good.  Well, let’s end it there.  Until next time everyone.  Thanks a ton for listening.  I really appreciate your listenership.  So thanks again, and take care.  (Music Plays)