Recession-Proof HealthTech by Taking Ownership of the ROI Narrative
The US economy, by definition, is in a recession — a mathematical reality affirmed by on-the-ground market behavior across US healthcare. As health systems continue to carry pandemic-era losses, they slip into a defensive market posture that has, in turn, slowed down the rest of the sector — vendor deals have slowed or halted, speculative bets on growth have all but disappeared, and healthcare technology company valuations have been brought back down to earth.
However, during turbulent economic times transformative companies can realize outsized market advantage. In fact now, more than ever, there are significant opportunities for healthcare technology companies to grow market share and outshine their ill-prepared competitors.
🌾 It all starts with taking ownership of your return on investment story.
Table Stakes: Bring Your Own Data (BYOD)
Healthcare technology companies must grab ahold of their ROI narrative and not leave such a central aspect of their business to the mercy of client data requests, especially in the thralls of a bear market.
In order for this to happen, they must first access relevant longitudinal patient journeys, trustworthy pricing estimates and the provider affiliation structures — to effectively provide a comprehensive look at the economic reality surrounding their product. One could thoughtfully piece these resources together over time, but such a choice would likely be untenable for most HealthTech companies, both financially and technically.
Nevertheless, such a herculean effort has already been successfully undertaken by companies such as Monocle Insights, who provide a comprehensive, yet approachable view of the entire clinical/economic landscape surrounding the patients, providers and clinical activities affected by your product.
These flexible data products bring a nationwide scale, which is critical to an ROI-centered growth strategy that doesn’t leave your data science, sales and strategy teams beholden to bespoke and deeply imperfect client data requests.
🌾 A successful BYOD strategy puts YOU in charge.
Step 1: Start with ROI
A majority of US healthcare innovation is vendor developed, and health system purchased; thus providers themselves represent systems of care engulfed by the results of their purchase choices. That being said, it is rare that someone can answer, with extensive articulation and objective confidence, “How do I know it works?”
Now, how can we know? The answer lies in what is called causal impact modeling, often wielded within the context of CausalML. These tools and techniques help determine the cause and effect of interventions on a series of events, testing multiple key metrics at once.
That’s a technical mouthful, so let me clarify with two example use cases.
A provider group implemented a digital front door application three months ago wants to know the causal impact on network integrity, patient throughput and rate of care coordination lapses.
A nutrition application is implemented across a 500 patient cohort and wants to determine the causal impact on journey complexity, avoidable costs and the emergency visit frequency.
Causal impact modeling can not only articulate the relationships between activities, but also how each activity impacts one another in terms of causation, not just correlation. As a result, a buyer and seller can each say with objective confidence, “Yes, the digital front door application did indeed reduce referral leakage by $7M, increase revenue by $12M, and boost care coordination efficacy by 30%.”
Step 2: Personalize ROI
In concert with a successful BYOD strategy, this CausalML framework can move from client to client with relative ease. Such scalability allows a HealthTech to not only determine the comprehensive clinical and financial impact of their product, but also provide statistically significant estimates of providers who are not yet your client.
You heard that right, the same tools used to determine ROI can be used to estimate anticipated ROI of all prospective clients, with each estimate completely personalized to the unique provider makeup, patient population and payor mix of each respective prospect.
🌾 As a result, HealthTech companies can walk into a prospective client meeting on day one and demonstrate their anticipated ROI across multiple key metrics, based on real data and real results.
Step 3: Prioritize Opportunity at Scale
Armed with anticipated ROI across a nationwide list of client prospects, the efficiency of marketing efforts, prioritization of account-based marketing spend, and the win-rate of your sales team can be absolutely transformed. HealthTech vendors will not only be able to close deals, but significantly differentiate their offering with tangible evidence, in a marketplace that would be otherwise skeptical or reluctant to execute a transaction - at any scale.
Separate the Wheat from the Chaff
Proof-of-value and validation of product/service ROI is paramount to the success of both health systems and vendors. However, I would actually take it one step further.
🌾 The future solvency of healthcare across the world rests on its ability to systematically identify, measure and meaningfully portray the causal impact of innovation, the resulting transactions, and interventions therein.
The recent era of cheap money confused the quantification of ROI, and clouded the prudence of purchasers. I recommend that a market contraction, when handled with care, will be good for healthcare in the long run. The wheat will separate from the chaff, and your control over your ROI narrative will help make sure you’re on the right side of the market shakeup to come.
If you enjoyed this blog, have questions/comments, or would like to learn more about Monocle Insights, please email somalley@monocleinsights.com, or visit our contact page to schedule a demo!
