Does a healthcare CEO need to be experienced in the industry?

Nate Holbrook Founder / CEO at Lilac

September 28th, 2015

Curious how others feel- Does a great healthcare CEO have to have experience in the healthcare industry or does the CEO just have to have a great background in leadership & management. For example, the CEO of Practice Fusion does not have a medical background how do others feel about this?

Shingai Samudzi

September 28th, 2015

While the CEO does not have to have experience in the industry, I do think that at least one member of the founding team does.

Healthcare is not a consumer industry - you can't expect to be successful with just a great product. You need to understand the complex politics that go on behind purchasing decisions as well as clinical end-user adoption (ie, physicians might love the app, but if nurses hate it, and *they* are the ones doing the data entry, your adoption and end results will still be poor). You need to have an appreciation for how to drive change management within a clinical setting, as well as user preferences.

More importantly, success metrics are much more important than with a consumer app. For consumers, "this helps me do X" is sufficient. For a hospital, often balancing on razor thin margins, with a hoard of report outs they need to do to various regulatory bodies you need to be very precise about the expected outcomes. While "a better patient experience" is noble, and no one will disagree, a hospital will not make a $200K purchase just to give patients the warm and fuzzies.

I see way too many "patient-provider communication" or "care coordination" apps and the like developed by teams of designers or engineers who think that all of the problems in healthcare boil down to just developing a prettier interface over the patient experience. While pretty is nice, effective is far more valued. And to know how to make an app or healthcare product effective requires some background in the care delivery sphere.

Keira Barr CEO and Founder at Ketzel Design

September 28th, 2015

As a health care professional with decades of experience delivering healthcare, I feel it is critically important that the leadership team has intimate knowledge in the space. To solve problems most effectively they have to be addressed from the inside out and only those who have been in the trenches and "walked the walk" so to speak fully understand the nuances. I find that so many companies only utilize physicians and/or other health care professionals as consultants and wind up missing the mark time and again. While it is vital to have a well rounded team with a strong presence from those individuals with technical prowess and other disciplines, nothing can substitute for the understanding that comes from having a background in healthcare.

Laura Mora Founder, Product Innovation & Development Manager at MIMEDTICS; Research Professor at TEC Costa Rica

September 28th, 2015

I agree with Shingai Samudzi that not necessarily the CEO needs background in the medical industry, but at least one team member should; especially (and mainly to me) due to regulatory requirements, since many things should be taken into consideration even since the design phase of the device (e.g. Design Controls, design planning, etc.), no matter if it is a hardware or software product.

Also, having a member with the background might help you to move faster and more securely, since that person has a sense on how strict this industry is.

Zhenya Rozinskiy Partner at Mirigos

September 28th, 2015

I think a CEO should have at least some experience in the industry. CEO's job often is to sell the company to clients, investors, and such. It would be difficult for them to do so without being able to speak the same language.

Healthcare especially is a field where internal knowledge makes a huge difference.

Luis Eduardo Trujillo

September 28th, 2015

I think CEO's does not have to be an expert in the field of their industry but have the ability to understand the need, size and manage the required resources, develop a feasible solution and achieve results. It is an addition of different variables. I do agree it is necessary to have in the founders team somebody coming from the healthcare sector. Experience form the field helps but will not make the job. Regarding healthcare specifically one of the most important assets of a CEO is the ability of communicating with healthcare providers. This is not an easy task. This is an industry where the stake is people's health. There is a very low margin for mistakes. Physicians can not make mistakes so their mindset is not easy. Being able to understand this environment and communicating effectively could be a very strong asset for a successful CEO in Healthcare,.

Candice Hughes, PhD, MBA

September 30th, 2015

Having been in the healthcare/pharma/biotech space for years, I have seen time and again that people from outside the space seriously underestimate the strict regulatory environment. This leads to substantial fines and even potential jail time for officers. If you have not lived this experience day in and day out for years, it is hard to understand. The regulations are complex and pervasive. The entire processes of the company has to be built around compliance. Also, just a comment that healthcare can be either DTC or B2B (sales to physicians, hospitals or other healthcare groups). Each of these markets differs widely. Without someone on the management team who has both deep and broad (multifunction) knowledge of the space, the company is taking enormous risks. A final caveat is that because this space is complex, people in the space who are skilled are often paid relatively high salaries. So bringing one in from the outside is costly. Thus, having a founder (who may be taking a low salary versus the market) who is steeped in this knowledge can give the company an unfair competitive advantage over companies without this skillset.

Bob Smith Consulting to Boards, CEO's and Key Management Teams, Strategic Investor and Fast Growth Companies

September 30th, 2015

Really good views here. Two big parts of a CEO role is a Strategic sense of how the Healthcare Business can thrive in its chosen space, as well as getting the respect and following of the people in the company to perform to potential.

Compliance, Innovation, Growth, Performance, Customer-Satisfying, shareholder returning and traction for a good future are a big juggling act. You don't need to know all of these things in depth, but you do need to know how to access, align and achieve with them. It starts with respect and being respected. This is the Art and the Science.

Pranay Choudhry Founder & Marketing Lead at Actozen

October 1st, 2015

This is a great forum for discussion and I agree with the point that someone on the team should have healthcare experience. While providing a great patient experience is there (great design, communication etc), I would like to add that fundamentally it is a very difficult industry when it comes to changing mindsets. That is true for doctors and patients both.

The best I could do right now is surround myself with a bunch of practising doctors and get their inputs on our products (even the small details). It helps in building affiliation. I don't know if its the right approach yet so I'm going to leave it out there for everyone to share their views.

Mak Jamasbi Market Innovation & Digital Disruption Strategist

May 24th, 2016

Not necessarily but like all other things it really depends what you are trying to do.

There are two types of innovations and it is critical you understand which type of healthcare innovation you are attempting to pull off:

1) Sustaining/efficient innovation: You are introducing a product/services to improve exiting healthcare business process problems. For example, digital automation to improve hospital operations, EHR, and clinical management tools. Almost in all of these cases you are improving an existing process by introducing technology to automate work intensive and manual tasks. And yes you must know all the details and every step of A-Day-In-The-Life of the main Actors in the use cases you are trying to solve. And as many people have said in this tread: the regulatory regime of the healthcare.

Caveat: Sustaining Innovation is Really hard to do and often leads to failure because of all the stakeholders will try to kill you off.

2) Disruptive Innovation: In this case you don't have to be a Subject Matter Matter Expert (SME). In fact outsiders are the ONLY ones who can pull it off! The disruptive startups create a new market by pealing off customers away from existing healthcare system and create a new market, for example, companies like Lemonaidhealth.com and Walmart's CareClinics disrupting Primary Care and to some extent visits to hospital emergency rooms. They are providing a low-cost option by diverting patients with simple illnesses away to physician practices and hospital visits (according to health insurance industry report, 70% of doctor visits can be easily solve by simple medical remedies). So by creating an alternative business model you create a new markets where healthcare industry incumbents will not even come out to challenge you. In this case you are disrupting the existing business model by taking it down and the only people who can do it are outsiders who have no vested interest to sustain the existing healthcare system.

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