Category Archive For "For Startups"
A central theme for the AngelMD community from the outset has been one of life-long learning. Specifically, our team includes some avid readers. I count among my personal mentors some of the many authors I have read over the years. I learn from their successes and failures as chronicled in their books. I benefit from the research they conduct to author their books and from the intellectual stimulation they provide.
Today, I am introducing a new way to support and engage our startup community. I want to invite you to join our monthly book club. Each month I will select a book that members of the club will read together. (If you’ve read the book before, re-read the book with fresh eyes.) I have created a Slack channel for members of the club. Each week I will post some questions to keep you progressing on the reading assignment. Toward the end of the month, we’ll open the discussion to ways in which you learned from the book or ways in which it resonates with personal experiences.
Some months I will include the actual authors in our discussion. This will be a fun opportunity to ask them questions or hear insights that may not have made their way into the final written work.
The goal for this club is three-fold:
- Foster camaraderie amongst healthcare startup entrepreneurs. This can be a lonely endeavor and we want you to rub shoulders with people working through similar experiences.
- Create some accountability for ongoing personal learning and enrichment. It’s easy to cut this out when you are in startup survival mode.
- Develop new tools and methods that will help you build and run a more successful business. You may even decide to implement the book club concept among your team.
A few rules:
- This is a no stress group. Especially busy in a given month and cant get the reading done? No big deal. Do what you can. You will get out of this what you put in.
- The discussions will be conducted in a true spirit of camaraderie. We want to help each other win. All ideas are welcome.
- Register HERE (have friends or coworkers who might want to join? Send them this link)
- Join Slack Channel HERE
- Check out the reading assignment once you get into Slack…
- Have fun
January Book of the Month: We aren’t wasting any time. The book for January 2020 and for our inaugural effort is What You Do Is Who You Are by Ben Horowitz.
I am starting with book for a few reasons. First, I believe the old saying by Peter Drucker: “Culture eats strategy for breakfast.” Culture is critical to building the company we want. That said, most people have no idea what culture actually looks like beyond nonsensical mission statements or buzzwords. Horowitz takes a fresh approach to addressing the subject and I found it compelling.
In this episode, Mark Mescher speaks with Byron Hewett of Brava Diagnostics. Byron is the Co-Founder and CEO of Brava Diagnostics, a company that is focused on rapid triage of chest pain patients. Byron explains the pitfalls that Brava Diagnostics has faced, and how the company managed to avoid them.
Byron is an outspoken proponent of innovation in healthcare. Not only from the aspect of bringing better healthcare, but also ensuring that there is less disparity between people who can afford care and those who can’t.
We’ve been amazed at the response to Innovation4Alpha, our investment-focused podcast that we launched a few months ago. With that in mind, it was time that we went back to the drawing board and came up with a podcast that tells the other side of the story — that of the startups.
Introducing The Health Halo. Each week, AngelMD SVP of Professional Relations Mark Mescher will sit down and talk to an innovator who is helping to shape the future of healthcare. Here’s the explanation from the host himself:
Make sure to subscribe to The Health Halo via your smart speaker, or your favorite podcast app. We’ll be sure to update the links as the podcast goes live on the various services.
As the premiere destination for healthcare startups, we’re fortunate to be able to see, evaluate, and invest in the very best. But along the way, we also see the mistakes that startups make. We discussed the challenges that face direct-to-consumer healthcare startups, and that opened a new line of discussion. Could we apply that method to startups from other specialties as well?
It makes sense to start with the segment that we see most often at AngelMD — Medical Devices. Launching a Medical Device startup is challenging. In my career I have had the opportunity to be involved in many early-stage device companies. After reflecting on those successes and failures, I have developed a list of six key factors to building a successful medical device startup.
1 – Quality First
The first element of a successful medical device business model is to design and build your device from day one with an FDA quality system. This will dramatically shorten your device development and approval cycles.
According to the FDA, The Quality System (QS) Regulation is in place to ensure that manufacturers “establish and follow quality systems to help ensure that their products consistently meet applicable requirements and specifications.” Rather than dictating how a manufacturer must produce a device, QS provides the framework that all manufacturers must follow, allowing the manufacturer to fill in the details themselves.
Navigating QS Regulation isn’t a skill set that we would recommend to someone without experience. If no one on your team has medical device development experience, it is critical to secure an expert consultant to help put that quality process in place.
2 – Know the Codes
The second element of a successful medical device business model is to create a product with a known reimbursement code. Many entrepreneurs, including physicians, are shocked to learn of the complexity associated with securing a new CPT code required for reimbursement.
In order to establish new CPT codes, an individual, a physician, or a specialty group must submit a coding change request form. The CPT Advisory Committee then reviews the proposed code. The change request must address the following:
- A complete description of the procedure/service (e.g., Describes in detail the skill and time involved. If this is a surgical procedure, include an operative report that describes the procedure in detail)
- A clinical vignette which describes the typical patient and work provided by the physician/practitioner
- The diagnosis of patients for whom this procedure/service would be performed
- Copies of peer reviewed articles published in the US journals indication the safety and effectiveness of the procedure, as well as the frequency with which the procedure is performed and/or estimation of its projected performance
- Copies of additional published literature which you feel further explains your request (e.g., practice parameters/guidelines or policy statements on a particular procedure/service)
- Evidence of FDA approval of the drug or device used in the procedure/service if required.
But that’s only half of the story. In addition, a device startup needs to address the following questions:
- Why aren’t the existing codes adequate?
- Can any existing codes be changed to include these new procedures without significantly affecting the extent of the service?
- Give specific rationale for each code you are proposing, including a full explanation on how each proposed code differs from existing CPT codes.
- If a code is recommended for deletion, how should the service then be coded?
- How long (i.e, number of years) has this procedure or service been provided for patients?
- What is the frequency with which a physician or other practitioner might perform the procedure/service?
- What is the typical site where this procedure is performed (e.g., office, hospital, nursing facility, ambulatory or other outpatient care setting, patient’s home)?
- Does the procedure/service involve the use of a drug or device that requires FDA approval?
If CPT Advisory Committee approves the creation of a new code, there is still a six-month lag in its implementation. New CPT codes are released bi-annually on January 1 and July 1. If a code is approved on January 1, it is not made active until July 1.
It’s worth noting: AngelMD only considers providing capital to startups that are able to leverage existing reimbursement codes.
3 – Will Someone Use This?
The third element of a successful business model is a medical device that generates a financial or clinical return on investment. The market is moving toward pay-for-performance and it is critical that medical device startups are able to intersect with this market dynamic.
In years past, when fee-for-service was still the status quo, it might have seemed like a good idea to come up with “yet another device.” In modern healthcare, with performance-based reimbursement, the focus has to shift. During the clinical testing phase, it is important to measure positive impacts on healthcare delivery costs or improved patient outcomes.
4 – Stack Your Team
The fourth consideration is the composition of the management team. In the AngelMD network, physicians are actively involved in the early stages of startups. Unfortunately, that isn’t the status quo. The healthcare industry as a whole sees far too many companies that have a goal in mind, but no team to get them there.
In the larger startup world, it’s become more common to see non-technical founders who then find a technical co-founder to help them build their dream. The same should hold true in the med device world. If you are not coming from a medical device background, it’s important to select a business partner that has medical device experience that can complement your own skill set. Ideally, that person will have direct experience in a segment that your device is targeting.
5 – Know The Costs
The fifth element to consider — and you should evaluate this both early and often — is the projected cost of manufacturing. More than a few medical devices have failed because of the inability to manufacture the device at a price that is still cost effective.
6 – Find a Guide
The sixth element of a successful medical device company is to secure a ‘sherpa’. The role of the guide is to help the company navigate through the FDA’s approval process. FDA regulations are constantly changing, and the approval cycle can be shortened by having an expert to manage your company’s submissions and interactions with the agency.
A simple understanding of the FDA’s regulatory process isn’t enough. For example, there are changes that are specific to digital health, diabetes management, and a wealth of other device categories. There are also incentivized paths available that can help to shorten the approval process for some types of devices.
There are challenges to launching a new medical device, but physicians and entrepreneurs have never been ones to back away from a challenge. By arming yourself with the tools to be successful, and knowing the potential pitfalls, you’ll be better prepared for the journey ahead.