How to Sell Your Healthcare App to a Hospital

In healthcare, attention is a scarce resource. If you’re selling a healthcare app in Canada, you’ll face difficulties getting noticed because health networks are under tremendous strain and data lives in silos. If you’re selling a healthcare app in the United States, you’ll face an uphill battle accessing decision makers. Health networks are massive, providers are aplenty, and the interface between insurance companies and patients is a maze not for the faint of heart. But does that mean bringing innovation to hospitals as a third-party vendor is a lost cause? Not by a long shot. Hospitals need external vendors to help them innovate. Healthcare providers are focused on delivering the best health outcomes for their patients, and that often means embracing new technology … but only after they see sufficient data to prove potential impact. And this is why health tech companies are often staring down the barrel of a chicken-or-the-egg situation: they need to test their apps within a hospital setting, but hospitals need data to support a use case before adoption. So what’s a healthcare app to do? John Shahidi, former director of business strategy at BlueDot and partner at Parkdale Ventures, has been selling healthcare technology to hospitals for several years. Keep reading to find out more about John’s step-by-step process for developing relationships with hospital staff, building your reputation, and closing your first big deal. Step 1: Understand hospital metrics. Healthcare apps face a two-pronged challenge when they’re attempting to prove their worth to a hospital:

Clinical outcomes: how physicians will improve health outcomes for their patients at a faster rate
Population health outcomes: how leadership can demonstrate better health outcomes at a population level within their organization

After the Affordable Care Act was enacted in the United States, hospitals began to provide what’s called “value-based care”. Value-based healthcare is structured so that healthcare providers, including hospitals and physicians, are paid based on patient health outcomes rather than on the amount of services they’ve delivered. Value-based care ensures that providers are rewarded for improving health outcomes––and fined if their outcomes don’t live up to higher performing hospitals. In 2020, the Hospital-Acquired Condition Reduction Program, administered under Medicaid, identified 786 hospitals that will receive lower payments due to underperformance. Why does this matter to you as a vendor? Because hospital stakeholders live and die by the metrics they report to the United States government. Before making contact with a hospital’s innovation leaders, make sure your healthcare solution improves at least one of these key hospital metrics:

Readmission and re-infection rates
Mortality rate
Bed occupancy
Average length of stay
ER wait times
Hospital incidents: hospital-acquired infections, etc.
Physician-specific metrics: revenue generated, patients seen per day, average patient costs per day
Operating margins

Step 2: Sharpen your value proposition. After you have a sense of the metrics your app can improve, it’s time to refine your product’s main value proposition and how you’ll communicate it to hospital leadership. When you’re first starting your healthcare app journey, your value proposition will be based on assumptions. Before you begin selling to hospitals, your goal is to transform those assumptions into data as quickly as you can. But … how do you do this if you can’t test your product in a hospital setting? The reality is you may not be able to. But you can get close enough to make a solid case for a pilot (see step four). That’s where your network and user feedback come in. Here are some solid resources that will help you develop your user testing strategy: A Comprehensive Guide To User Testing A Step-by-Step Guide to Testing Healthcare Applications Getting Access to Doctors for User Research Step 3: Find the right person to speak to. (Hint: It’s not the CIO yet.) You’re not ready to speak to a hospital’s chief innovation officer until you can prove your healthcare app will have a significant impact on key hospital metrics. But that’s okay … because your goal isn’t to sell your product. Yet. Your goal is to partner with a leader in a clinical setting to run a pilot. If your app reduces ER wait times, do some research to determine hospitals that are struggling with this metric. Identify physicians or other members of leadership within the ER department who have a stake in improving that metric. Develop a personalized pitch for a free pilot, and how you’ll work together to test your idea. Step 4: Propose a pilot … but don’t expect a sale. The number one mistake healthcare app sales teams make is attempting to make a profit before developing a good reputation. Before you start selling, you need to demonstrate evidence-based outcomes. When you’re building your pilot, think of it as an experiment. Ask yourself the following questions:

What does “impact” look like for my healthcare partner?
How will I know if my solution is delivering an impactful outcome?
Which features of my app are set up to deliver an impactful outcome?
How will I know if I’m not affecting patient outcomes?
How many touchpoints is my healthcare partner willing to have during the course of the pilot?
What is my plan to pivot with this healthcare partner if I need to?
What are the ideal next steps after the pilot is over?

Step 5: Iterate on your product––fast. After your pilot has begun, you may discover your solution isn’t delivering your desired outcomes. In that case, it’s time to iterate––without hesitation. Speed is your best friend during a pilot. Before a pilot begins, you’ll need to establish the following:

Open lines of communication between your pilot team and developers
A commitment to bias toward action
The human resources required to iterate on key features
Team alignment on the importance of acting quickly
Team alignment on what’s considered impactful

Step 6: Publish a study. Credibility is currency in healthcare, and one of the best ways to demonstrate this is by publishing a study. Your pilot shouldn’t happen in a vacuum. To reap the benefits of your pilot, you need a tangible item to show what happened during the pilot and how you were (hopefully) able to improve your chosen metric(s). Before your pilot begins, make sure you have an agreement with your partner on a published study if the results are in your favour. Step 7: Repeat steps 1-6 to develop a solid reputation. If the results of your first pilot are better than you thought they could be in your wildest dreams, you may have a solid enough case to present to a hospital CIO. In that case, congratulations! But if you identified some weaknesses in your product during your first pilot, be honest about the work you still need to do to develop your reputation and gather more data. Remember: in healthcare, it’s better to be patient and spend a lot of time in research and development to gather the data you need to refine your solution so that it solves a real problem. Step 8: Prepare for your CIO conversation. When you’re confident in your tested solution and your pilot results, it’s time to take that information to hospital CIOs. Here are a few things to remember when you start to make contact:

Engage your highest level executive for CIO outreach. Your organization will need to reach out from a seniority level that is commensurate to the person at the hospital.
Package your pilot results into a compelling, data-driven story. Include pilot partner logos and references to published studies. Ensure your proposal is visually compelling, professionally designed, and gets to the point quickly about how your solution improves the metrics hospitals care about.
Anticipate questions about cybersecurity and compliance. CIOs care about data custody almost as much as they care about metrics. Watch our on-demand HIPAA 101 webinar to learn more about the ins and out of data privacy and how to ensure your healthcare app is handling personal health information (PHI) in a manner that’s compliant.