The pathway to success for digital health startups is challenging. Hospitals are often looked at as the point of entry for digital startups. Trying to work with large hospitals can pose challenges for early stage start-ups for several reasons:
1) Hospitals often are a part of larger systems. As a result, there are multiple layers to the approval process with multiple decision makers prolonging the sales cycle. In my experience as COO of an academic medical center the time from initial interest to contract can exceed two years. Furthermore, complex deployment processes add to the timeline for pilot implementation.
2) Hospitals and health systems have narrow margins. Most hospitals have margins of 2-4%. The Congressional Budget Office has forecasted that up to 50% of hospitals may face negative margins by 2025. There is competition within the budget for both new and replacement capital. Furthermore, there is reluctance to add ongoing new expenses to capital budgets.
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Author: David BergerSenior Executive Healthcare Leader with experience in academic Hospitals and Health Centers. Physician leader with demonstrated results in hospital operations including ICUs, operating rooms, acute care wards, and outpatient clinics. Experience with Lean management and working with systems engineers to improve processes. Master's Degree in Health Care Management from Harvard University. Recognized national leader in health care quality and patient safety.