How Healthcare Policy Impacts a Startup’s Ability to Succeed

Covid-19 has accelerated digital health transformation and impacted policy in addition to everything else.

Many startups in the digital health and med tech space may be unaware how crucial it is to understand healthcare policy and how it affects their business model. Understanding the impacts of policy has become even more critical during the Covid-19 era as government institutions have changed policies in direct response to the need for social distancing and operating in virtual environments.

My Sacramento-based non-profit organization, StartupSac, convened a panel of doctors and digital health experts in October to explore the rise of digital care due to COVID-19 and how it has changed how healthcare is delivered.

Moderated by Francis Kong, MD the panel featured Nicoleta Bugnanu, PhD, MBA, Peter Yellowlees MBBS MD, Davis Liu, MD, Larry Ozeran, MD, and Albert Chan, MD. The panel covered an array of topics but perhaps the most relevant for startups covered how health policy, and COVID-19’s impact on it, has impacted startups’ abilities to succeed or fail.

How do health policies impact the ability of startups to innovate in healthcare and to succeed, especially now during the Covid era?

Panelist Dr. Larry Ozeran is a trauma surgeon, a software developer, and health policy advisor who provides support to healthcare organizations, government entities, and startups in the areas of strategy policy and innovation. Ozeran offered some key insights for startups to consider.

“The pandemic has accelerated digital health transformation that was already underway and it has impacted policy as much as it’s impacted anything else,” said Ozeran. “For example, due to the pandemic, Congress gave the Secretary of Health and Human Services the ability to change requirements for tele-health that had been hindering its broad distribution.”

Ozeran went on to advise that startups keep three things in mind regarding policy.

Understand How Policy Impact Your Customers

“The first thing about policy that’s important is that policy defines what you can do and what you must do. If you’re a startup you need to understand how policy impacts you. But perhaps more importantly you need to understand how policy impacts your customers. If your customers are health systems or clinical providers there is a whole lot of regulation and law that impacts them and if you don’t understand that, it’s going to limit your ability to connect to your customers,” said Ozeran.

Rules are Temporary

The second insight Ozeran offered startups was to keep in mind that rules may be temporary and emphasized the importance of staying up to date on policy and getting involved in the policy process.

“If you have plans as a startup to sell into the market based on what the rules are today, you need to be aware of the fact that the rules are temporary,” said Ozeran. “You need to know that there is a bill in congress right now to try and make the rules permanent. You need to understand what that is and you need to consider thinking about, do you want to lend your voice to trying to get that bill in congress passed, so that some of these changes become permanent.”

Policy Around Remote Patient Monitoring Devices

Ozeran’s third insight was especially relevant for startups who have remote patient monitoring devices as products.

“If your business model depends on those remote patient monitoring codes there is a discussion in Medicare on the payment proposal for providers for next year where they had been talking about removing the one that pays for the devices that are involved in remote patient monitoring,” said Ozeran. “That’s important because you have to know whether the doctor or the patient is going to pay for those devices. If the payer stops paying for them and if you weren’t paying attention and you didn’t notice that that thing went away it could completely destroy your business model. So the point I’m trying to make here is that even as a startup you have to understand policy and how it impacts you, how it impacts your business model, and how it impacts your customers.”

While there is so much innovation possible in the healthcare space, it’s critical as a startup to keep in mind that if the innovation you want to do goes against policy, you’re not going to be able to do it. As a digital health or medical device startup you need to stay informed and educate yourself on policies that impact your customers.

Watch the video of the full panel discussion: