There is a need for new companies to come up with innovative solutions to some of the pressing challenges facing the healthcare industry.
Up-starts like Medopad, and Ginger.io – spun out of MIT – have cropped up to help fill the void between innovation and implementation of new health services in a sector that is often criticised for being slow-moving.
MBA graduates are steering some of these ventures and business schools are drawing on these ideas to educate the next generation of healthcare executives.
Ron Gutman is the founder and chief executive of HealthTap, a start-up that connects people with trusted health information and doctors through smart devices and PCs.
A graduate of Stanford GSB’s MBA, he believes that technology will change the way people access healthcare. “There are so many exciting opportunities,” he said.
He demonstrates how tech has the potential to transform medicine from being focused on places where healthcare is delivered to becoming personalised for individuals.
He is also one of a host of MBA entrepreneurs driving innovation in the healthcare industry through such technologies.
There is a race among big technology companies and small start-ups to find ways to improve patient care and turn biological information into business innovation.
From wearable devices to 3D printing, a wave of new technologies are being deployed.
“In the last decade, healthcare innovation has gone from the entrepreneurial equivalent of Siberia to Silicon Valley,” said Halle Tecco, founder and managing director of Rock Health.
An MBA graduate of Harvard Business School, Halle in 2010 launched the company – a seed and early-stage venture fund that supports start-ups building technologies to transform healthcare.
The start-ups Rock Health has backed had last year raised more than $200 million from investors.
The 54 companies it supported in 2014 are pioneering innovations including activity-tracking devices, data analytics tools and “telemedicine” apps that connect patients with medical providers.
The latter is a segment of the tech sector that is fast-growing. IHS, the market research firm, predicted that the telemedicine industry would grow from $240 million last year to $1.9 billion in 2018.
Ron said that his mission with HealthTap is to make people healthier and happier.
He wants to build the first trusted global consumer brand in digital health – and he is well on his way to achieving that goal.
“Our doctor network and user-base experienced robust growth,” he said. Since its launch in 2010, HealthTap has grown to have 65,000 licensed US doctors on the platform, with 10 million active users.
The value proposition is that HealthTap can save consumers making an appointment with a real-life doctor and then traveling to their physical practice.
The company’s Prime members – who pay a subscription for premium service – can access a doctor in minutes.
Ron believes that there are more opportunities in the areas of wearable technology and big data.
He said: “There’s a huge opportunity to bring together the valuable health data that’s collected with these wearables, and help doctors make better decision[s] and recommend their patients better courses of action.”
This mirrors the bigger companies outside the healthcare sector – such as Google and Microsoft – that are entering the field to develop monitoring software and other technologies that utilize big data.
Free-flowing data could cut costs and reduce hospital visits. This is of growing importance: ageing populations and squeezed budgets mean there is an urgent need for more efficient means of delivering care.
“Health systems around the world face rising demands from the increasing cost of healthcare [and] meeting rising consumer expectations,” said Professor Lawton Burns, director of the Wharton Center for Health Management and Economics.
He added that these developments have created more recruitment demand for healthcare-educated business graduates.
These factors are also contributing to rising global demand for the personal health monitoring services that are often developed by innovative technology companies.
They are also slowly becoming a focus in business education, as universities seek to develop the next generation of healthcare executives.
“Innovation is a key driver of both improvements in health and increases in healthcare spending,” said David Ridley, faculty director for health sector management at Fuqua School of Business.
Both Rock Health and HealthTap are based in Silicon Valley – an epicentre of both innovation and start-ups that have been drawing the attentions of business schools.
As innovation in healthcare opens up opportunities in management, these schools see health-tech start-ups as learning opportunities for prospective healthcare managers.
Students at Haas School of Business in California, for instance, benefit from close links to health-tech ventures nearby in Silicon Valley.
“MBA students are often asked to engage with these emerging entities,” said Kimberly MacPherson, associate director of health management at the business school.
She added that Haas also supports MBA students and the larger sector on this front by harnessing creative energy through “hackathons” and by challenging students to develop and test their own business ideas.
Divya Dhar, a Wharton business school graduate, is one MBA who has taken on such a challenge.
She co-founded Seratis, a start-up driving innovation in healthcare by offering a mobile communication platform to help coordinate, track and analyse care across medical teams.
As a former medical practitioner, Divya has benefited from the healthcare management track offered by Wharton. “You can easily and with confidence talk to business leads, strategic partners and investors [with an MBA],” she said.
Such technology platforms are heralded as big business but the challenge for similar companies is making the most of medical data while protecting patient privacy.
But for the pioneers of healthcare innovation, and academics helping to steer their ventures to market, there remains much optimism.
He said: “[It can be used] to transform data into relevant information based on evidence; to individualize care; and to create holistic and integrated healthcare programs for prevention, treatment and homecare.”