Overcoming The Challenges of Digital Health
I love meeting new people. Well, not always. I love meeting new people I find interesting, which is most people, but definitely not all people. Carm Huntress is the sort of person I love to meet, and he was a guest on the Fortune’s Path podcast this week. Carm is an entrepreneur, technology enthusiast, healthcare geek, audiophile, and father of young kids. He also understands the value of automating a manual process in healthcare, always one of my favorite business strategies. Carm and his company Credo Health want to make it easier — e.g., not require a fax machine — to access data from a medical record.
Fax Machines are Not the Future of Digital Health
Healthcare providers send billions of pages of faxes each year, further proof that healthcare is run by sadists. How can this be? Paper has high reliability and is easy to use, which is a lot more than many healthcare IT systems can say. It’s also infinitely portable if hugely wasteful, but this is healthcare we’re talking about. Improving how medical data is moved from one provider to another and how patients access their medical data gets Carm’s fires going every day.
Digital Health Entrepreneurs: Raise Your Prices
In our podcast, Carm tells an interesting story about what it takes to get a meeting with the CEO of a multi-billion dollar healthcare system: ten million dollars. If you’re talking about anything less you’re not worth the time. To all those healthcare entrepreneurs out there who can’t get a meeting with senior leaders, try raising your prices.
Speaking of raising prices, health insurance companies are on the march to raise premiums with little justification. After years of relatively stable healthcare cost inflation of between 2 and 3 percent, health insurers are looking to raise rates dramatically because of “rising wages for nurses” and other chimeras. Single payer system anyone?
Purchasing Decisions are Irrational
Before he got into healthcare, Carm helped a family owned audiophile retail business position their platform for growth. How many of us SaaS-ters would give our left arm for 400k unique visitors a day? Audiogon had it when Carm started, and he helped them replace their old infrastructure with a new technology platform that set them up to take advantage of all that traffic.
During the interview Carm solved a mystery that’s troubled me my whole life — how can all those thousands of audiophile companies stay in business? “High margins and addicted customers.” That’s a formula that works in software, too. It’s hard for most mortals to find 20x worth of difference between speakers that cost $100,000 a pair and ones that cost $5,000, but the $100,000 ones are oh so much cooler. And it’s not just software and speakers where we overpay for the coolest thing. People spend $5 million for PowerPoints from McKinsey. No one ever went broke underestimating the rationality of their buyers, or over estimating our desire for exclusivity. Ask the tobacco companies. Cigarettes remain a nearly $1 trillion dollar market worldwide, despite irrefutable proof that they kill us, and SalesForce costs over $100 a user per month. High margins and addiction.
Find out More About Digital Health
Check out the full Fortune’s Path podcast interview with healthcare CEO and multi-successful-starter-and-exiter Carm Huntress here.