Big Tech in Healthcare: A Cautionary Tale

Nearly every time?Amazon, Apple, Google, et al. announce some new venture into the healthcare space, my inbox and phone blow up. Payer and provider executives, whom I’ve known in some cases for as many as eighteen years, want to know what I’m hearing about the said venture, if I have any contacts on the inside, if this one is really going to “disrupt” our industry, etc.?

I get it, I get it. These are exciting times in our industry and Silicon Valley has delivered extraordinary innovations across so many aspects of our lives –?why can’t healthcare be next??And, as we know firsthand, our industry historically has been too slow to embrace innovation.

And more than that, many of my payer & provider executive contacts are innovators and change agents who are frustrated with the pace of change within the legacy organizations in our space. Most are simply tired of “talking the talk” and nibbling around the edges of “transformation” and “innovation” in painfully risk-averse environments.

While eighteen years in healthcare has left me somewhat jaded, my cynicism toward the viability of most of these ventures has been largely validated.?They often begin with great fanfare and marketing hype only to peter out.

I acknowledge that it’s exciting to think about how the brilliant minds of Silicon Valley and their tech savvy could “disrupt” healthcare in a transformative way. There have been some notable successes among tech startups (telehealth, remote patient monitoring, population health analytics, artificial intelligence). And some have begun to truly impact our industry.?

From the outside: many great ideas and smart people, moving at a frenetic pace, with bold ambitions, all the while promising big payoffs; Silicon Valley hubris can be intoxicating…but,?buyer (or prospective candidate) beware:

I caution each payer & provider executive to take great care before making the leap into the tech space – particularly Big Tech. Ask tough questions. Test the level of commitment (resources, investment) & understanding of the complex regulatory environment. Understand the timeline & milestones.?Meet & vet each key stakeholder’s understanding of the vision. Glean why, with their brilliant track record as innovators & their formidable tech prowess, they’re even talking to?you?--?someone from the old guard, a prehistoric payer/provider (at least from their perspective).?

Here are three things to consider before making the leap:

Viability/Likelihood of Success?-- History tells us that most of these ventures won’t succeed. The road is littered with examples of those outside of healthcare who came in billed as “game changers” only to be quickly humbled by the industry’s layers of complexity, historical baggage, and regulatory guard rails.?Three recent examples:

Google Downsizing Its Health Team?

Amazon Ends Haven Health Venture ??

Apple Once Considered Launching its own Health clinics

Value Alignment?-- There’s a reason why many of us are in this business: the human impact. Healthcare touches us all personally and profoundly. Whether as a patient, family member, provider, or insurance member, every interaction with the healthcare system comes with high stakes.?

I have spoken to some tech industry leaders who speak of healthcare as if they’re merely describing a financial statement or a widget-making factory. As we’re in an industry where lives are literally always in the balance, I find that unsettling. Technology is wonderful and critical but, it can’t become more important than the patient or provider.

Culture Shock?-- As frustrated as many of us are with the pace of transformation among traditional payers & providers and with the legacy consensus-driven cultures of many organizations in our sector, the other extreme might not be so desirable.?

From countless conversations with healthcare tech executives, I can confidently report that most organizations in the space are highly transactional & brutally competitive. Further, that “sharp elbows” and cut-throat behavior is encouraged (either implicitly or explicitly) and that most associates & executives are considered highly expendable and subject to removal on a moment’s notice. Simply put, these environments are not for the faint of heart nor for those who value developing deep relationships.?Moreover, they don’t make for stable employee tenure.

There, I said it (or wrote it).?All of that aside, the above does not describe every healthcare tech organization and obviously, some will be successful and have better intentions/cultures than others. To that end, it never hurts to explore a role or an organization.?

The key may be simply to evaluate the organization, the role, the value proposition, and the leadership team with the same dispassion many in the tech world apply to the healthcare industry. Look very, very closely before you leap and don’t get caught up in the hype.

Thank you for reading. As always, I’d welcome your thoughts and feedback.

? Steve McGovern and Executive Search Insights, 2021. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Steve McGovern and Executive Search Insights with appropriate and specific direction to the original content.