Wil Yu and the ONC (and is Wil a “C” or a “D”?)

I had a brief phone call with Wil Yu at the Office of the National Coordinator of Healthcare IT the other day. I was pleased that he took the time to speak with me and impressed with his demeanor and analysis. It’s hard to say what he thought about *me* (which is the part that really matters) but there were a few takeaways from our conversation:

• dxTopDoc is like eHarmony for Patients and Doctors

I was describing it as Match.com for patients and doctors but Wil is more on the money. eHarmony uses an algorithm and is for serious relationships whereas Match.com is more for browsing pics and getting quick dates. This also clarifies something for us about our model: we’re probably appealing to the serious patients with chronic issues they haven’t yet resolved more than the casual patient just looking for a physical. This also means our patients might be willing to pay for the right match. I sure was willing to back when I had health problems. At the risk of over-extending our metaphor it may be that ZocDoc is more like Match.com since they offer the quick-hookup for the masses.

• We have a concept not a product

I was inclined to disagree with Wil on this one. After all, we entered a working product into the $5k Smart Health App challenge that awarded us honorable mention. We didn’t get recognized for an idea but for a real working app that we sweated over for several weeks. However, we don’t have a WHOLE product which Crossing the Chasm talks about as a key to mainstream success. Also, we are missing the key ingredient: data. Until we can actually plug into a live EMR/EHR we cannot connect real patients to real doctors.

• ROI is not a slam dunk

So Wil is actually a lot like a VC guy and gets down to the bottom line fast. I respect that. (We need a whole government like that.) My pitch was that better matching means lower costs for healthcare plans but Wil pointed out that this is really a thesis. We need a study to prove it. I agree, but I also don’t know any entrepreneur who’s going to bury himself in books and research for a year while someone else steals the opportunity. So the real point is that big plans may not adopt this for ROI benefits. Wil suggested benefit managers at large corporations instead. That’s an avenue worth pursuing. Going back to Crossing the Chasm, though, what we really need are the early-adopter visionaries and enthusiasts. I think the hard core customer group may actually be the patients like me who are not satisfied with the current process for finding a doctor.

• The current process is not scientific

Wil agreed with me that the current approach where you sift through a catalogue of doctors and pick one kinda sucks. We discussed wether you should pick an old doc with a lot of experience or a young once with the latest training and I think we agreed we don’t even know that much. When I think back to DiSC management training I think the C-types are especially aware of the shortcomings of this process. Where’s the data? Where’s the logic? The I’s and S’s may appreciate the personal pic and bio but the C’s want some numbers or something. D’s just want results and tend to be more big picture so may or may not think the current method is good. Side note: Is Will Yu a “C”? Nahh, I think he’s a “D” and like me he secretly wants to run the world. He’s just in a much better place to do it 😉

• Everyone’s on Facebook and Twitter and I haven’t talked to enough people yet

True. Facebook page and twitter account are now live for dxTopDoc. But also worth noting that at our current state this idea is easily co-opted. A partner is also a competitor. We need to build a core base of users and get traction.

• Wil knows everyone

This is a takeaway for me and every other entrepreneur in HIT space. This guy is a power broker. Reminds me of a guy like John Tuli, the HBS alum and PE guy I worked for way back when who hooked me up with Trilogy, Sensable, and other great startups. I admire these types because they connect ideas and resources to make things happen. I’m looking forward to hearing Wil speak at the HIT showcase this week because his vantage point plus his brainpower will give him a lot of interesting things to say.

Why I’m a Healthcare Entrepreneur

I just wrote this on a website that asked me why I wanted to do this. It all came out in a single five-minutes of typing into a tiny web-form box. That makes me think it’s real. Here’s what I wrote:

Several years ago I suffered some odd symptoms. The HMO doctor did a little bloodwork and dismissed them. I paid out of pocket for specialists who did expensive tests and found nothing amiss. It wasn’t until I found a doctor who had seen cases like mine before that I got a diagnosis and got better. I want to help others find the right doctor faster than I did.

Doctor shopping is a huge cost on our healthcare system but it happens for a reason: many doctors are the wrong fit for their patients. I want to solve this problem by matching patients and doctors so people get better faster. The broad implementation of the EMR gives us the golden opportunity to make this happen now. The data we need is no longer trapped in manila folders in metal filing cabinets. It’s now within our reach. We can actually see which doctor has the right experience for which patient.

I’ve spent 14 years building web applications with my own team for other people. Now I’m building one for me — and everyone like me who hasn’t yet found the right doctor for them.

Sadly, the medical system has treated doctors like commodities, like they’re all the same product which can be rated and priced on a single scale of 1-5 the way we rate crude oil on its sulfur content. That’s bogus. There is no “one best doctor” for all. It’s a multi-dimensional problem of matching not rating. The challenge here is mass personalization not mass marketing.

Health, wealth, and wisdom. When you have a health problem you realize health matters most. Now that I have my health I can refocus on wealth. I believe that solving the doctor-patient matching problem will yield massive benefits which will be quickly sought-after in the current healthcare climate. The one who gets this right will help millions — and make millions, too. I intend to be that guy.

Why ZocDoc Ain’t Worth Your Zillions

A friend sent me an email today with this subject: “WTF!!!” Inside was a link to this article in “Business Insider” (http://www.businessinsider.com/what-is-zocdoc-startup-tour) claiming that startup ZocDoc is worth $1 billion based on its latest $50 million round of venture capital. I told my friend not to worry, that valuation was obviously in ZocDollars. But seriously, someone paid $50 million for a small piece of this startup. Who? Why? And what’s wrong with this picture?

A bit of background: ZocDoc is one of a new breed of “HIT” startups targeting healthcare information technology. Now that social networking is saturated, housing is dead, and the marketplace is quaking like an i-banker in August (there was an earthquake in Manhattan, recall) the smart money is moving into tech. Again. This has led to a well-documented round of hand-wringing about valuation bubbles among investors. But not all of them are sitting things out. Others are battling for a piece of the economy where quality candidates still get multiple job offers: namely IT.

In this space Andreessen-Horowitz is a three hundred pound balding speed-talking gorilla (at least judging by Marc Andreessen’s recent appearance in the WSJ) and as good a proxy as any for the mindset of these investors. Andreessen is the guy who co-founded Netscape and LoudCloud, invested in Skype, Foursquare, Twitter, and Facebook, and sits on the boards of Facebook, eBay, and HP. He’s a guy you have to take seriously and he explains his reasoning clearly in this recent Wall Street Journal editorial. According to him, the problem is simple: “software is eating the world.” It’s disrupting established industries and claiming “large swathes of the economy.”

Is it really? Like I would know! As far as I can tell a toxic combination of mortgage brokers, earthquakes, and the United States Congress has taken that job. Yet there is no question that tech has toppled established industries like telecom (remember Ma Bell? me neither), newspapers, music, and many more. If you have any doubt just compare the rosy valuation of Facebook ($50 billion) with that of the Washington Post ($3 billion) and consider that the latter includes three thriving businesses in addition to the famous name news rag. History is indeed happening here.

So why has smart money like Jeff Bezos, Vinod Khosla, and Peter Thiel backed ZocDoc? Andreessen apparently isn’t in this crowd but we can examine his outspoken philosophy for clues. He states that healthcare and education are the two areas being targeted by his fund today because they’ve lagged in innovation. That may or may not be true — biotech and charter/for-profit schools have been trying to change that for years — but they are at least two parts of the economy where the dollars are still flowing. Healthcare also has another thing going for it: the electronic medical record (EMR). EMR has long been a dream of medical futurists, technocrats, and every person who has ever been asked to recall their entire medical history and scribble it on a single piece of paper in 15 minutes while sitting in their doctor’s office coughing up a lung. Today, thanks to incentives from Obama’s healthcare bill and the prodding of his outgoing CIO Vivek Kundra it’s becoming a reality. In other words, HIT is “it” today. Apparently that makes ZocDoc, with its mission of “improving healthcare,” a billion-dollar baby.

Well, maybe. It’s true that Apple briefly exceeded Exxon in valuation and Groupon was worth more than Google at its IPO, so who knows. But I do see one problem: the product. Let me explain. ZocDoc says they are improving healthcare. Then their banner ads offer to help you find a doctor. But once you click all they really offer is an online appointment book. That’s the new healthcare solution? I saw something similar demo’d back in 1997 when a tech company was recruiting on campus. It was an online appointment book for job interviews. One of the prospective job candidates in the audience raised her hand and asked if everyone who went to the website was guaranteed an interview. Good question. Nobody thought that thing was worth a billion dollars.

To be fair ZocDoc does have some traction with over 5 million appointments available from an undisclosed number of paying doctors. That’s a lot of available appointments. But I have a question for you. Do you really want the doctor with the most available appointments today? “I have a serious health problem so give me the guy who isn’t that busy?” I hope that’s not how ZocDoc hires their crack IT team. ZocDoc’s founder Cyrus Massoumi has a cute story about having to wait three days for an appointment to see a doctor after rupturing an eardrum. Ouch. But if it was that bad maybe he should have gone to the emergency room? I’m just sayin’.

My own experience with the healthcare system was starkly different. Several years ago I started experiencing some unpleasant symptoms. I went to the HMO doctor and was told I was fine without any more than basic blood-work. I went to a cardiologist and paid out of pocket to be told I was too young to have heart problems. I went to an endocrinologist who interned at Mass General and heard all about his sleep apnea. Lots of time and money spent. No problem getting appointments. Just no results. It wasn’t until I found a clinic with a three month waiting list and forked over a little more than I spent on my first motorcycle that I got a solution. In just thirty minutes my new doctor diagnosed mono, toxic mold exposure, and gluten intolerance.

Like wow, Scoobs. How is that even possible? I didn’t believe any of it until the spot mono test came back positive. Then I looked around the apartment and found a ton of mold above the HVAC unit. Two different labs confirmed it was the bad black stuff. Yet after moving to brand new mold-free digs I still felt bad, especially after eating. The nadir came one fine afternoon when I suffered an apparent heart attack. As I lay dying I called my dad (full disclosure: he’s a doctor) and had the following conversation:

Me: Dad, I’m having a heart attack! Sell my Google shares if they ever hit 500.
Dad: You bought Google?
Me: !@#$% I’m having a heart attack!
Dad: No you’re not. What did you eat for lunch?

Soup. Made, as it turns out, with VITAL WHEAT GLUTEN (hereafter known as kryptonite in my household). A genetic test and a stool sample confirmed the gluten intolerance/celiac thing. This doc was now three for three!

My takeaway from this whole experience was the obvious: never call my dad if I’m having a heart attack. But anyone whose dad was a doctor knows that much. (There are support groups for this.) My other lesson was exactly the opposite of ZocDoc’s. Basically, it’s not about getting to whatever doctor is available. It’s about getting to THE RIGHT DOCTOR FOR YOU. When I asked my miracle doctor how she made the diagnosis her answer was simple: she’d seen cases like mine before. In other words, her experience made her the right doctor for me.

And that is the core problem with ZocDoc: they treat doctors and patients as if they are all the same. Their philosophy is that doctors are commodities so just grab the first one that’s available as quick as you can like an ounce of gold on the COMEX after a Eurozone meeting. This is precisely the mentality that has been ruining healthcare as MBAs takeover HMOs and view hospitals as factories with fixed time-slots for delivering their “products” to “customers”. This sounds great to pharma companies who as Jerry Seinfeld once pointed-out view the American patient as a cardboard cutout with an open mouth waiting for pills. But it’s also precisely the depersonalization that doctors and patients detest.

Is this a good business strategy, though? Two ZocDoc founders are McKinsey alums, schooled in that most rarified air of Manhattan-based C-suite advisors.  So maybe a plain ‘ole web developer like me just doesn’t get it. Yet it appears that they’ve come up with a commodity play here. And just like a guy who cornered the market on pork bellies they believe that more is better. That’s why they boast to customers about 5 million available appointments. I guess it’s kind of like McDonald’s 500 billion served? You can get the same hamburger anywhere at any time?

The accepted business strategy is exactly the opposite: build a brand by distinguishing what once was a commodity as a unique product. Nike doesn’t sell you shoes, they “market the swoosh,” which means you get to be like Mike. Perrier sells you a European experience, not the free stuff that flows from your tap. And so on. Ware-housing doctors’ hours and hawking them online treats medicine like a uniform product and flies in the face of proven brand strategies based on differentiation. You can’t distinguish yourself like that.

So that leaves us with a platform play. They are creating a market of for doctors and patients. Trouble is, what’s the platform? An appointment book? That’s the wrong platform. Look at Facebook. Everyone’s Facebook page is a reflection of who’s interesting to them. It’s unique. And it’s all built on a massive social network getting smarter every day. The same thing works for eBay, Amazon, and other successful dot-com behemoths who created a personalized system of mass e-commerce. The platform must build on unique metadata. If you are looking for a similar platform in healthcare it’s not the appointment book. It’s the EMR. Every health network, hospital, and doctor’s office must get onboard the EMR revolution now to meet new medicare reimbursement standards. This is creating a massive technology platform of highly personalized data about diagnoses, medications, and procedures which can be used to customize the healthcare experience for each consumer.

The result? Mass personalization. Using your EMR data we can find the doctor with the right experience and training for your unique medical history. This doctor will be unlike all the rest because they can best diagnose and treat your problem. This will make healthcare a better experience for you as a patient. It will also make it a better experience for the doctor because they will spend their time with patients they can treat effectively. Doctors hate seeing patients with problems they can’t fix. And now that they are mostly employed by businesses that grade them on outcomes the careful selection of caseload to match skills and experience matters more than before. Perhaps most exciting of all, in an era of rising healthcare costs and falling income, getting to the right diagnosis with fewer unnecessary diagnostics will reduce healthcare expenses without reducing services. That’s a big win for managed care, and one which does not have to come at the cost of patient care.

ZocDoc’s motto is “Get well soon.” That’s a great ambition. But the best way to accomplish it is not to run to the first doc available, but rather to get to the right doctor for you. Accuracy — not a shotgun approach. That’s why I started dxTopDoc to use the EMR to match patients and doctors. The goal is to get you to the right doctor who can solve your problem the fastest. Our prototype (called then “dxSocial”) was recognized in a national contest sponsored by Harvard Medical School and Health and Human Services and promoted by the outgoing federal CIO Vivek Kundra.

We can’t offer you five million appointments yet — but do you really need that many? Our philosophy is that you really just need one. The right one. With a lot of hard work, and a little luck, we hope to bring you that one soon. Until then, hold onto your ZocDollars 😉

The Black Swan Advantage

I’ve been reading Nassim Nicolas Taleb’s bestseller The Black Swan which has absolutely nothing to do with the Natalie Portman thriller of similar name (full disclosure: the only Natalie Portman flick I’d ever watch again is Luc Besson’s Leon/The Professional). Taleb is an ex-trader and member of the Society of Judgement and Decision Making (how cool is that?) who is frankly far more fascinating than the pint-sized ingenue turned Queen of Naboo could ever be. The thesis of his book is that humans are no good at predicting the massive disruptions to their lives that determine the course of history. He calls these disruptions “black swans.” This thesis is obviously immediately appealing to a technology visionary — as well as to a web developer like myself who aspires to make the kind of impact (and valuation) that leads people to toss around such silly titles. At the risk of paraphrasing a great man (and Taleb is at least a man possessed of a great mind) we might say this: great risks may go unnoticed by the masses. Since risks for established players are opportunities for upstarts, therein lies our opportunity.

That deduction is exactly the kind of thing that would piss Taleb off, of course. His book is full of references to cognitive psychologists like Kahneman and Tversky who stick to precisely controlled cognitive experiments and report only testable hypotheses. He abhors “big picture” types who apply narratives over outcomes with nothing more than “logic” to support their ensuing heuristics. Such are the actions of financial advisors and other lesser lifeforms that infest our world (his view, not mine). I’m going to go there anyway, though, and explore what I see as the “Black Swan Advantage.”

First, let’s look at a simple example of how people miscalculate risk. In a Kahhneman and Tversky experiment subjects are asked to rate the likelihood of an earthquake in california causing flooding that kills 100 people versus the likelihood of a flood in the USA killing 100 people. Most people, including Taleb’s beleaguered financial advisors who are supposed to understand risk, rate the first event more likely. Apparently the concrete vision of a California earthquake causing a killer flood strikes them as more likely than the possibility of the flood occurring on its own anywhere in the U.S. This is obviously wrong since these two possibilites can be modeled as follows:

A = earthquake in California
B = flood kills 100 people in USA

The first case requires A and B (A*B) while the latter requires only B. Well, A*B is less likely than B. But people are stupid.

Kahnneman and Tversky won a noble prize for their work which I first encountered as a young psychology student. This made me wonder how I might profit as they did from the stupidness of others. I wasn’t smart enough back then to consider becoming a financial advisor but the new opportunity now is obvious: recognize an event of massive impact that others have underrated in likelihood. In other words, find a black swan.

Taleb calls this “the reverse turkey.” The story goes that a turkey is reared from a chick by a farmer. Each day the farmer appears and the turkey is fed. The turkey uses the daily appearance of the farmer bearing food as confirmation of its thesis that the next day will be the same. Then one Thanksgiving the farmer appears with a hatchet. That is the Turkey’s Black Swan event.  A reverse turkey is simply betting on the black swan event in the same way that traders short a stock. Rather than profiting a little every day on a large investment you lose a little every day until one day it pays off big. Essentially, you get your Thanksgiving meal.

How does this apply here? I would argue that the electronic medical record (EMR) is one such “event”. As a result of Obamacare it’s pretty much already here. Yet when I talk about how it will change everything people seem to think that might be years away. The thing about Black Swan events is that people think they are years away. And then they happen.

Why should EMR-based “events” start to happen now? One reason is that we begin to reach a tipping point. If you envision EMR as a platform or network you understand that it’s value increases exponentially with its size. At a certain point there are enough doctors and patients on a system to give that system massive value. We can start to do things with it. People have talked about this for years so the masses may have stopped believing it was real. But people talked about gold for years before it spiked in the past few years (full disclosure: I’m a goldbug, too). In other words, you cannot talk away the black swan. It still happens.

So how is that to our advantage? Simple. The major players are not taking the possibilities of EMR totally seriously. They are expecting business as usual just without as much paperwork. They are even hoping that Obama gets voted out of office and they can go back to the old way of doing things, or that the financial crisis will delay stage 2 of “meaningful use.” They are not realizing that once personal healthcare data is portable the rules of the game fundamentally change. Once patients can control their data they can control their destiny, at least a little bit more than before. They do not see that the first healthcare system to capitalize on this power and parlay it to their patients can become massively more successful than all the rest. Like Amazon.com building a database-based bookstore they can own the market forever after that by providing a customized experience that is faster, cheaper, and better at delivering the goods the customer wants.

That, in essence, is what dxTopDoc is all about. We will start by delivering the right doctor for you. Healthcare execs may poo poo that thinking a widget’s a widget. The AMA may claim all doctors are the same and worth the same pay. But patients know better. Therefore, the first healthcare network to capitalize on this differentiation will become the biggest and best doctor-providing service available and their rise will be the black swan event in the industry for years to come.