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Dr. Alan Pitt

Episode 8: Understanding the Healthcare Ecosystem, with Dr. Alan Pitt

Alan Pitt, M.D., is a Professor at the Barrow Neurological Institute, one of the country’s premier centers of excellence for neuroscience. He has degrees from Stanford University (B.A 83) and the University Arizona (M.D 88). He did postgraduate training in Internal Medicine, Neurology, Radiology and Neuroradiology.

Over the past two decades Dr. Pitt has worked at the nexus of computers and medicine, looking for better ways to stitch together our fragmented healthcare ecosystem. He passionately believes that by putting the patient in front of the right person, the patient’s fear and anxiety (and that of loved ones, the nurse, or generalist) can be mitigated by the reassurance such contact provides. This approach avoids needless tests, transfers and worry. In his efforts to transform healthcare, Dr. Pitt focuses on cloud-based solutions leveraging messaging and collaboration with sustainable business models.

Dr. Pitt was the healthcare representative to the Digital Arizona Council, a group organized by the State of Arizona’s CIO. He is an adjunct professor for the ASU College of Nursing and Health Innovation and the University of Arizona College of Medicine/Phoenix.

In addition to his clinical responsibilities, in 2014 Dr. Pitt was invited to serve as CMO for Avizia, a global provider of telehealth services.

In 2011 he was awarded a $100,000 innovation grant from Dignity Health for (Mi)hospital, a novel cloud-based system for patient engagement.

Dr. Pitt has been an invited speaker at the state and national level on issues related to telehealth and patient engagement.

What you’ll learn about in this episode:

  • Dr. Pitt’s background in Neuroradiology
  • Why people with ideas to fix healthcare often fail
  • The cultural nuances within healthcare that need to be understood if you’re actually going to execute on an idea
  • Why you should accept in kind from a hospital that can’t offer cash
  • What hospitals look for before they’ll offer an in kind partnership
  • How a successful product would slowly expand through a hospital system
  • Why you need to understand an entire ecosystem, and how Dr. Pitt sees this in practice in healthcare
  • Dr. Pitt’s involvement with telemedicine
  • His new podcast Healthcare Pittstop

Ways to contact Vinay:

Transcript:

Welcome to System Execution, the strategy and system behind today’s successful companies. Systems can make or break your company, but here, we’ll solve your physical, technological, and psychological systems issues by connecting you with experts that have succeeded in overcoming those challenges in their own business and providing you the guidelines and tools you need to implement those same strategies for immediate results. Now, here’s your host, Vera Fisher.

Vera: Welcome to System Execution, a podcast devoted to using processes and systems to drive to a better outcome for your business. I’m Vera Fisher, your host. All business, no matter the size, relies on systems. Some of these are physical systems such as a factory, some are technological like project management software, while others are psychological systems such as checklists and organizational charts. Many of these systems will overlap in your business. Today, I’m very excited to welcome our guest, Dr. Alan Pitt, who is the attending physician and professor at the Barrow Neurological Institute, one of the country’s premiere centers of excellence for neuroscience. He has an extensive career and background in healthcare related companies and new companies, and just take a moment and let’s welcome Dr. Pitt, welcome to System Execution.

Dr. Alan Pitt: Thank you very much, Vera, glad to be here. That’s certainly a mouthful to say that whole thing at once.

Vera: It is, and I apologize for messing that up, but if you wouldn’t mind giving our listeners a little more about your background and your expertise.

Dr. Alan Pitt: Sure, I’d be happy to do that. So as mentioned, I’m a neuroradiologist at the Barrow Neurologic Institute. I look at imaging of the brain and spine, and as a neuroradiologist I work a lot with computers and medicine. Over the last 2 decades, in addition to my clinical practice, I’ve been involved in a host of projects, many which ended up leading to companies, largely in the health IT space but also some in the device space. You’ll find a lot of radiologists in healthcare tend to be very much involved with the health IT space, because all we do is look at computers all day, because our images are all on computers. I think there’s been something like 6 different new cos (companies) of varying degrees of success that I’ve been involved to one degree or another. I’ve gotten to see the evolution from idea to company and I’ve seen unfortunately a lot of ideas that never get to launch in healthcare as well.

Vera: That’s interesting, so whenever you’re taking these companies from the white board or the idea to fruition, is there a certain process or system that you use to accomplish that?

Dr. Alan Pitt: Usually what I had seen in my experience is that you have a disconnect of the medical ecosystem that’s responsible for bringing that idea forward. Much of the time in healthcare, you’ll have someone with a passion to fix healthcare. Healthcare is severely broken, we all know that, you just have to be a patient to know how broken healthcare is. Often times you’ll have someone who comes to their doctor’s office, is in the hospital, has a bad experience, and they say I can build something better. Often they’re a very techy person, but they’re not a healthcare person. So they’ll take their ideas and they’ll have technical skills to build that idea, and they’ll try to take it forward and they often fail. They often fail because there are nuances to healthcare that they just don’t understand. They don’t understand why it’s necessarily broken, and why their idea is going to fail, because of those hidden cultural agenda issues.

Vera: We all know that from the perspective of HIPAA and compliance and items like that, so taking those off of the table, what are some of those couple of nuances that you are referring to?

Dr. Alan Pitt: You’re absolutely right, so first is regulatory. There’s two ways to sell something, if you want to get someone in healthcare to be interested in buying your solution. One is that you’re going to sell something because it’s going to make them money. This is a capitalistic country and if you can come up with an idea that makes money, everybody likes it. Those ideas tend to probably be harder, actually, than ideas that deal with the regulatory issues within healthcare. HIPAA, privacy, security, all of those issues also represent a business opportunity. What the entrepreneur doesn’t really understand is that there’s a whole bunch of cultural nuances within healthcare that need to be understood if you’re actually going to execute on the idea. In many ways, just like the military, there’s a hierarchy in healthcare, and who can talk to whom and how, has it’s own staccato, it’s own way of doing things. There’s also a bunch of roles and responsibilities within the healthcare ecosystem that are somewhat Byzantine and difficult to understand, and like any industry, you need to understand the person who’s in front of you and what’s top of mind for them, if you actually want them to get to listen to your idea, your solution, and help you become their partner.

Vera: So from your vast experience with neurological x rays and that tie or crossover between technology and the brain, what is the specific type of ecosystem that you come up against when trying to make those two things work together?

Dr. Alan Pitt: Most of the things that I’ve been working at, well that’s not totally true, I had one project that one of my good friends Dr. Nick Theodore, who’s the vice chair of neurosurgery at Hopkins now, he wanted to solve a problem. He was putting in pedicle screws for back pain and he strongly believed that automation could help him with this problem. So he came to me as an imager and as someone who knew a lot about computers and said, “I think I can do this better than the way we do it now, anyone who’s ever put a stud in a wall knows that occasionally your hands slips as you put that stud in. If you’re not in the right place on the wall, your hand is going to slip. Well guess what, when spine surgeons put these screws, hardware in your back vein, they also slip, and when they slip, it’s not so good, cause they go into bad things.” So Nick and I and a few other collaborators came together to build a company called Excelsius Robotics. That company went through a series of stages and it finally exited and sold to Globus Medical, which is a large company that sells screws and other surgical devices for surgeons, a perfect partner. There were a series of steps along the way where it could have failed, but it fortunately got to launch.

A couple of learnings from that experience with Excelsius, frankly the company wasn’t doing very well. You had myself and Dr. Theodore, you had an engineer, a guy named Neil Proper, and you had two other people who came to the table more from the engineering perspective, but they didn’t really have the business acumen to take it forward. The company was largely floundering until another person came to the table, a guy named Mitch Foster, who took ownership from a business and sales perspective. He had a medical sales background but also business background, and he took ownership of that company, and frankly if Mitch hadn’t stepped up, Nick’s idea, which is a great idea, would never have seen the light of day. So you needed that necessary ecosystem of partners to take a very necessary idea forward. Other things that were interesting in the path of that robotics company, there was an opportunity for the hospital to invest. Dignity healthcare became an initial investor in that robot, where they gave in kind.

So often times a these healthcare ecosystems will not give you money but they can give you very valuable in kind to launch your idea. So as an entrepreneur, you should realize that even though your software, your device seems super simple, to actually deploy that to give you a use case that people use it within a hospital, is very expensive for the hospital system. The simplest device, they’re going to start thinking about an expense on the hospital side of $200-$250,000 to basically give you engineering time, lab time, clinical time, to prove out that your idea is actually worthy of pursuit. So when you come to the table and start talking to a hospital and you’re expecting them to write you a check for $250,000 for ownership, they may not do that. But if they offer you in kind for ownership, you really should give a lot of thought to that, because it’s very valuable to have a hospital partner.

It’s very common for a device or software to not have a hospital partner that’s not credible in use cases and never launch because they lack that. Many hospital systems are now looking at better ways to partner with innovators, where they can do some sort of in kind trade. But it’s tricky because innovation is not the business of a hospital system, right?

Vera: No.

Dr. Alan Pitt: They don’t really understand how to do that. In any case, in terms of Excelsius and our partnership with Globus, the hospital came in as an industrior, we were able to build a prototype because of Dr. Theodore’s personality, he’s this huge 6 foot 5 Greek guy. He was able to bring lots of industry people around this idea, Mitch was able to do follow up, and as a team we were able to get interest from both venture capital as well as industry, the company Globus, instead of taking on additional investment from a venture capital. Either path is okay, they have pluses and minuses. It certainly mitigates your risk when you’re purchased by a company like this.

Vera: All this is really insightful, I’m really happy about all this information. But I wanted to circle back on a comment you made about the hospital not writing a check. Really getting that in kind strategic partnership. Give me a couple of examples of the things that a hospital would look for where they would say okay we will partner with you, we will do an in kind partnership with you.

Dr. Alan Pitt: Sure, so if you want to get the hospital’s attention you have to solve the hospital’s problem. The hospital has certain types of problems that they’re aware of in terms of workflow and process. If your product can address their problem, they’re much more likely to invest in you. One of the real problems though is, as an innovator, you probably have not spent considerable time in healthcare, and you don’t understand issue that are top of mind. You’re not speaking the same language, so as a patient you may say, “My gosh, I should be able to have my records available to me right away.” As a healthcare administrator, you want to hear that problem in a way that improves outcome, improves patient experience, reduce cost. Unless you as the innovator can speak it in a way that the hospital sponsored can understand, they’re probably not going to listen to your idea.

By the way, some of this was covered in an earlier podcast I gave, or actually a podcast I’m going to be launching soon from one of my good friends Deb Dolphin Banner. She’s responsible to review many, many innovations, and she’ll tell you, she’s very transparent. If you don’t hit me in that first line about what the value is that you’re bringing to my hospital system, I’m probably going to hit delete. Don’t take it personal, but I probably have 900 other emails that are in my inbox, that I’m trying to get to, so you get angry that people won’t give them the time of day, realize that these people are getting hit by hundreds of requests for time and so they’re just trying to juggle their time and figure out the weak from the shaft as quickly as possible.

Vera: Exactly, and I think being able to capture in one or two sentences, that’s where those companies having a good positioning and a really succinct message plays into that a well. I’m going from a curiosity perspective, i’m familiar with the four stages of drug FDA approval, so stage one, stage two, stage four you actually get to work on humans. Is there that type of stage process when you’re, let’s say you’ve secured the in kind partnership with a hospital, and you’re testing our your product or your service or your technology, is there a stage process that you have to go through in order to get validated by the hospital?

Dr. Alan Pitt: I’m not sure I would say that, there’s sort of a stage process. Many larger healthcare ecosystems, like Dignity has 43 hospitals, might take an idea, an application, say it’s a software application. They’re willing to pilot it in one hospital and get the response around that application, and if that works they’ll take it to three or five hospitals and if that works they’ll then say, okay we’ve now shown it works at 5 hospitals, everybody seems to like it, let’s see about how we would scale this more broadly. I think that nobody is going to make a large investment in something until there’s some proof of concept.

Vera: Sure.

Dr. Alan Pitt: They want to see from their end users how the application would work and so it is to some degree, it’s not quite FDA, but there is some kind of a staged approach understandably that a hospital would want to take. Now unfortunately that staged approach can also mean the death of a young start up. A start up will have limited amount of cash. What I’ve unfortunately seen a lot of times, is that you’ll have an innovator or two, and I’d strongly recommend that you have a partner whenever you do a new co (company) so nothing gets done as one person, it’s always two. You have a limited budget, you’re probably may be a young person and your spouse is sacrificing as you burn the midnight oil and make no money. The time smart can be your definite.

I’ve found this says well, let’s take it to one hospital and see how that goes for 6 months, then we’ll take it to 3 hospitals, and we’ll see how that goes for 6 or 8 months, and then we’ll think about it. A lot of times that can be a disaster because you simply don’t have the time to stay with that hospital that long. You’re going to run out of budget, or your spouse is basically going to come down on you to get a real job. Often times you as an innovator are better off going to a small hospital system than a large hospital system, because the speed to market is much better. Rather than try to get a Kaiser, you might want to go to a small hospital system that can run with you quickly, rather than trying to get through all the doors of a large hospital. You’re going to run out of time and money as a small company.

Vera: There’s probably a lot more hoops to jump through perhaps as a larger, many more.

Dr. Alan Pitt: Many more. Absolutely many more.

Vera: The interesting thing about what you’re saying Dr. Pitt is the ecosystem where within the hospital and healthcare system if you will, and I’ve been doing a lot of research just on that concept of systems thinking which is where I think you’re really talking about from that ecosystem, is really understanding the entire system before you start to go in and plug in new concepts and new ideas. Rather than just fixating on your one little siloed approach that absolutely can fix something, but if you don’t understand the entire system in and of itself, it ultimately in any endeavor is going to fail.

Dr. Alan Pitt: I totally agree with that, so particularly for my healthcare ecosystem, I think it is imperative that either the innovator comes from healthcare and has a very good understanding of the different roles and responsibilities in healthcare. That’s not often the case, by the way. Usually it’s a techy group, and if you come to the table as a techy group then you really need to quickly find advisors who understand healthcare, because they’re going to save you a ton of time and money and so you’re not going to go down rabbit holes with your idea and basically go bankrupt. The other flip side to that is I’ve seen a number of physicians who have an idea to innovate, the problem there is that physicians tend to think that their value is much higher than it is, and they tend to devalue how hard it is to start a business.

So I’m a physician, and if I walk around the room and say I want this, I want that, do this, do that, everybody jumps. When you enter the world of a new co and start up, you are not a physician anymore. You’re an entrepreneur, so people aren’t going to jump, they’re not going to immediately respond, and often times you’ll have an investor come to a physician, I’ve seen this lots and lots of times, and the investor will offer the physician what is reasonable business value for their idea, and the physician will scoff at it thinking their idea is worth, it’s the next Instagram, it’s the next billion dollar thing. So they can’t make the deal happen, because they come to the table with their own legacy history of it, their value at the table. So you have to think about who’s on the team, what’s the baggage their bringing, what’s the strengths, what’s the weaknesses, what can we do to supplement that team so you have the right team to bring forward.

Vera: Well that is great, that’s very insightful and the biggest take away, Dr. Pitt, is really understanding this healthcare ecosystem and the idea of a new company coming in and penetrating that and being successful in it. I want to thank you so much for your time and your insight today.

Dr. Alan Pitt: You bet.

Vera: Before we go, what’s your next challenge, what’s your next goal that you’re working on?

Dr. Alan Pitt: I’m doing several things: one is that in addition to my clinical practice I’m very involved in the telemedicine space. I believe telemedicine should be redefined as reassurance, because that’s the big thing missing in healthcare is the ability to bring the right resource at the right time for the patient or their loved one and for the provider. You can’t get reassurance, you replace fear and anxiety with CT scans and lab, so I think there’s a big run for the future in medical collaboration tele-medicine, I’m very involved in that space and I took on the role as the chief medical officer of a company called Avizia out of Reston, Virginia. I’ve also recently launched a podcast of my own called Healthcare Pitstop, and I certainly welcome any of your listeners to listen in there.

We didn’t talk about it but in addition to being this attending physician and professor, my mother is also a quadriplegic, so I’ve seen healthcare from the other side, and I think it’s a broken system in terms of how we care for each other. The goal of my podcast is to bring in thought leaders as well as people who are down in the weeds caring for patients, to hear their view of the problems and potential solutions in healthcare, and do short interviews with them and hopefully learn from each other, so we have a more complete view of the world. I certainly would welcome anyone there, and feel free to connect with me on LinkedIn, I tend to use that quite frequently.

Vera: Well fantastic, Dr. Pitt thank you again, and System Execution fans, no matter how many notes you took or how often you re-listen to this episode, the key is you must know that every successful business uses systems to drive to a better outcome. Thank you so much.

We hope you found this episode of System Execution on understanding the healthcare ecosystem enlightening. For free examples, case studies, e-books, and more, be sure to visit systemexecution.com/resources. Contribute to the conversation by reaching out to Vera directly on email at vera@systemexecution.com. Until our next episode, thank you for the privilege of your time.

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