Bottom-Up Enterprise Software Is Now Mainstream

Back in 2012 I wrote about the 'bottom-up' approach to enterprise software distribution. Bottom-up happens when a product is initially procured by an individual employee or group of employees and then, once a critical mass is reached, a seller upsells the product across the organization with additional features, bulk pricing, etc. This has now become a mainstream approach to enterprise software distribution. I recently attended a Go-to market conference held by a prominent venture capital firm and they advised everyone that the first question an enterprise startup should ask before designing a go-to market strategy is: are you bottom-up or top-down?

With successes like Atlassian and Slack and others the bottom-up model has come a long, long way in recent years. 

However, bottom-up doesn't work for every industry -- at least right now. Take healthcare as an example. To sell a product into a large healthcare organization you must get IT approval, work with compliance, promote workflow changes, train staff, potentially integrate into an EHR, address HIPPA concerns and do lots of other stuff before the first user can log-in. The top-down model can be a requirement.

That said, I believe we’ll start to see this change. The bottom-up model will only become more mainstream and will take market share from vendors that don’t adapt. Traditional enterprise vendors should take note and start to evolve.

Some specific implications:

Software vendors need to prioritize the user of their product over the buyer of their product (they're quickly becoming the same person). Engagement and user satisfaction metrics should be equally important as sales metrics. Employees are increasingly demanding that the software they use at work function at an equivalent level to the apps they use on their phone. And switching from vendor to vendor continues to get easier. If a product isn't adored by its users its ripe for disruption.

This change also means that product must play a much larger role in distribution. The product must be remarkable so people will talk to their colleagues about it and it must be easy to spread the word about and nearly effortless to access. If you look at the fastest growing enterprise startups (see below) the one thing you’ll find is that nearly all of them make it extremely easy for a new user to sign up.

Finally, this trend will bring big changes to sales and marketing teams. Marketing (messaging from one to many) will play a larger role in the selling process as it'll be responsible for acquiring the product's early users. This changes messaging and use of channels in a big way. When any employee within a company is a potential buyer your marketing starts to look a lot more like Apple's than Oracle's. And salespeople will need to increase their selling competence to represent both the user (human factor data insights, workflow changes, usability) as well as the enterprise buyer (product context, integration, ROI).

The line between enterprise software and consumer software is continuing to blur. And while there are industries where top-down will continue to thrive, the processes and systems and beliefs that have enabled this approach are beginning to crumble.

In the end, the real threat that bottom-up startups present to top-down vendors isn't just that they may have a more effective way of getting a product into market, it's that their approach requires them to build something that's very unique in enterprise software: a product that people love.

Some Thoughts On Trump & The Election

I couldn’t stay up to watch the results come in. I went to sleep around 11pm. I woke up around 4am and checked my phone and saw a Business Insider alert that said:

“Trump strikes conciliatory tone in victory speech, praises Clinton."

A small bit of light in an enormous amount of dread.

I didn’t sleep much after that. I laid there and felt a weird combination of fear and sadness. But a couple hours later when I went to the gym I started to come around a bit. Here are some of the thoughts that have been rolling through my mind today.

1. I used to kind of like Donald Trump. I remember listening to him when he would call in to the Don Imus show many years ago. I didn’t know much about him and he was pretty right-leaning on fiscal issues but on the social stuff he was definitely a New Yorker. He was a reasonable guy and made good some good points. And I loved how positive he was. We’ve all been annoyed by his constant use of adjectives like "terrific" and "tremendous" and "unbelievable" but back then I kind of liked it.
2. Month after month throughout the primary and into the general election everyone laughed at the notion of Donald Trump becoming President. It was a joke. What he pulled off last night was amazing. He brilliantly tapped into a large amount of fear and anger and ignorance and was able to light a fire among a huge number of rural voters.
3. To light this fire he talked about a ban on Muslims entering the country, reversing Roe v. Wade, repealing Obamacare and building a wall on the Mexican border. I’d be willing to bet that not one of those things will happen. And I’d be willing to bet that Trump doesn’t actually want any of those things to happen. Those issues generated talking points that won him the election. He won. He doesn’t owe anybody any favors and he doesn’t need to do any of that nonsense. If he wants any chance at reelection he’s going to have to come way, way back to the middle.
4. We need to create a new word and stop using the word “racist”. It’s too strong and inflammatory and in most cases inaccurate. I don’t think Trump is racist and I don’t think most of his supporters are racist. I think they’re ignorant and uninformed and fearful of a changing world but I don’t think they’re racist. When we call them racist it makes thoughtful conversation almost impossible.
5. Trump is a brilliant marketer and he knows that taglines work. "Make America Great Again" was the perfect tagline for him and it’s a crystal clear indicator of his strategy. When he says this to fearful voters in rural areas what he really means is let’s go back 50 years to a time when the world was less competitive. Where automation wasn’t destroying jobs and we didn’t have to compete globally and you could stay at a job for thirty years and you didn’t need two incomes. We live in a global economy now and those days are over but that vision is incredibly appealing to a lot of people.
6. The most important political issue to me personally is healthcare. Throughout the campaign Trump has continuously threatened to “Repeal Obamacare!” and has received loud cheers for it. I’ll bet if you asked the people cheering what that actually means most of them would have no idea. Those that do have an idea would probably just assume he’s referring to the mandate. I really doubt that healthcare is going to be high on Trump’s list. The election is over and he doesn’t need the “Obamacare” talking point anymore. Further, there are now 22 million people that have insurance as a result of the Affordable Care Act and that will be difficult for politicians to roll back. A lot of people were angry when Medicare launched but virtually nobody would advocate taking it away. And most of the payment reform has been rolled into a new law called MACRA that is separate from the Affordable Care Act. Healthcare is complicated and for the most part on a good path that should be supported by both parties (if you remove the politics). I don’t see things changing in a material way in the next four years.
7. You can argue that Trump has no experience but the reality is that Obama didn’t have the greatest experience and that turned out ok. What Obama did in the last two elections was also amazing. I’m a big fan of Obama but he was not the most qualified candidate when we was first elected. The presidency is now a popularity contest. We just have to get used to that.
8. Having said the above, I think we deserve a president that is prepared and dignified and isn’t reckless. I always thought George W. Bush was in over his head and wasn’t well prepared and was misguided but he didn’t embarrass our country and he wasn’t reckless. This is my main concern with this outcome. Being embarrassed by our President isn’t the end of the world but I do fear his recklessness. The generals should keep him in line when it comes to putting troops on the ground where they don’t belong but his rhetoric clearly can’t be contained. This isn’t about fearing that he has his finger on the button. This is about tiny groups of people all over the world looking for a reason to hate America. There is no worse time in American history in my view to be alienating our enemy. They are inside of our country and outside of our country and they have no home state and no borders and we can never find them all. Reckless, reactive, inflammatory speech from the American president is the most useful recruiting tool that Isis and other terror groups could ever imagine. I fear that he may not be able to rein this in. I truly hope I’m wrong.
9. As of right now it's being reported that 118 million people voted. Trump got 59 million and Clinton got 59 million. The difference is 0.3 percent. That's just crazy.
10. Finally, Trump is our President. Obama said this morning that we should all be rooting for Trump now and he’s absolutely right. We may hate everything he says and disagree with everything he says but like it or not he’s our President. As much we don't want to, we have to at least accept that.

Some Notes On MACRA For Digital Health Startups

Over the weekend I spent some time reviewing the 2015 Medicare Access & CHIP Reauthorization Act final rule (MACRA) that was released by HHS last week.

MACRA was a bi-partisan law focused on the Obama administration’s goal of moving 50% of Medicare payment away from fee-for-service and towards alternative payment models. The final rule lays out details on how the program will work and how clinicians can participate.

For those of you that are new to this stuff, the goal of all of this is to allow clinicians to focus on (and get paid for) the quality of care they provide as opposed to the quantity of care they provide; with a focus on disease prevention and improving coordination between clinicians. This is a major part of how we're going to reduce the $3 trillion cost of healthcare in the U.S.

The overarching set of policies that make up MACRA are referred to as the Quality Payment Program.

The document released by HHS last week that explains all of this is 2,398 pages long though the majority of it is made up of responses to public comments made regarding the proposed rule (you can find a 24 page summary of the document here). The rule will be implemented beginning in January of 2017 and will impact nearly all stakeholders across the healthcare system.

I thought I’d capture some of my notes on the rule here with a particular focus on those things that might matter to digital health companies. If your company is focused on improving outcomes, patient engagement, patient volume, interoperability or care coordination then you should take some time to understand MACRA. Key points from the rule below:

• For context, Medicare covers 55 million people and accounts for more than 20% of all U.S. healthcare spend. Medicare’s approach to payment is generally followed by commercial payers — in fact, many of these payers are farther down the road in payment reform than Medicare is at this point.
• MACRA is a statement by the government that they are dead serious about paying clinicians for value. If your business relies on a flat fee-for-service model it's time to start thinking hard about how you can get ahead of this change.
• Medicare has setup a transition year for the Quality Payment Program (2017), but physicians must act in some form during 2017. If clinicians do nothing in 2017 with regard to the Quality Payment Program, they’ll receive a 4% penalty against their Medicare payments beginning in 2019.
• With all of these acronyms the Quality Payment Program can seem confusing. It's really not. There are two simple payment programs that clinicians can participate in: 1. Merit-based Incentive Payment System (MIPS) or 2. Alternative Payment Model (APM) — NextGen ACO, Medicare Shared Savings ACO, etc.
• If a clinician is already in an APM nothing will change for them and they'll receive a 5% lump sum incentive payment that will run through 2024 and they can avoid the reporting requirements that will come with MIPS.
• Some of the APM options in 2017 will include Comprehensive ESRD (end-stage renal disease), Comprehensive Primary Care (CPC+), Next Generation ACO. Medicare Shared Savings Program - Tracks 2 and 3 (Track 2 allows clinicians to take up to 60% of shared savings; Track 3 - 75%).
• If a clinician is not participating in an APM, they can participate in MIPS. MIPS will focus on 3 areas: quality measures, advancing care information and general improvement activities. Medicare has created a nice set of guidelines to help better under the measures associated withe each of these areas. Vendors should take a hard look at these measures as these are major business drivers that non-APM clinicians will be thinking about next year.
• The MIPS program allows for more flexibility than previous programs in that clinicians can select their own pace and the amount of data they would like to collect and submit to Medicare. There are three options to participate in MIPS in 2017. 1. Test the program by submitting a minimum amount of quality data. 2. Submit 90 days of 2017 data. 3. Submit a full year of data.
• The timeline for implementation looks like this. At some point in 2017, clinicians must collect some amount of performance data and collect data documenting their use of technology and submit that data to Medicare by March of 2018. Medicare will give feedback on that data during the remainder of 2018. If eligible, clinicians will then earn a positive MIPS payment adjustment or APM incentive beginning in January of 2019. The payment adjustment will start at 5% and increase to 9% in 2022.
• MIPS will consolidate three existing programs: the Physician Quality Reporting System, the Physician Value-Based Payment Modifier and the Medicare EHR Incentive Program.
• The program will impact 600,000 clinicians.
• Clinicians must participate if they receive $30k+ in Medicare billings and care of more than 100 Medicare patients per year.
• “Quality” will be measured using both evidence-based standards and practice-based improvement efforts.
• The payment program applies to physicians, physician assistants, nurse practitioners,  clinical nurse specialists, certified nurse anesthetists.
• Medicare is putting aside $100 million to be paid over 5 years to train small practices on the rule.
• CMS will also allow “reporting as a group” for clinicians that put themselves under the same tax identification number.
• MIPS replaces meaningful use with the "advancing care information" program which speaks to use of technology. This program is focused on only 5 key areas: 1. Security risk analysis, 2. e-prescribing, 3. patient access, 4. summary of care, 5. request/accept summary of care. Again this is a good area for digital health companies to dive in.
• The rule is set to be finalized on October 19th.

For the most part, commentators are praising this effort by Medicare. The Quality Payment Program does a nice job of setting up clear objectives for clinicians, with flexible levels of participation and lots of concessions for smaller providers that don't have the infrastructure or resources to facilitate complicated reimbursement activities.

With a new administration coming next year and the inevitable confusion around what will come next, the Quality Payment Program does a nice job of making it much easier for clinicians to embrace those activities that will significantly lower cost and improve quality and ultimately patient health.

Exciting times in healthcare.

Sharing & The Next Generation of Enterprise Software

Salesforce.com runs the CRM system (Customer Relationship Management) for a huge number of companies — at last check more than 150,000. It’s interesting to think of the number of duplicate records that must exist in Salesforce. As an example, there are probably hundreds of vendors that, as we speak, are trying to sell their product into Microsoft. Each of these vendors has a record (or opportunity) titled, “Microsoft” in their instance of Salesforce. In many situations, such as sales to a large software company like Microsoft, this redundancy makes sense. Most of the vendors selling to Microsoft are selling very different products to very different stakeholders within the company. So it's logical to have a different record in Salesforce for each sales opportunity.

But for narrow industries like real estate, this redundancy makes no sense at all. As we speak, there are at least ten brokers trying to rent space on the 11th floor of 600 Park Avenue in New York. If all of these brokers use Salesforce.com as their CRM that means there are ten records for only one sales opportunity. Ten brokers would be entering information on the same opportunity in ten different places. This is silly. But this is the way traditional, silo'ed CRM works.

Real estate brokers would benefit immensely from shared records in Salesforce where they all could view the same profile for the same sales opportunity. The opportunity would include the most up to date information on availability, square footage, price per square foot, etc. This would bring 10x more value to Salesforce's customers.

Now consider what's happening in healthcare. The average Medicare patient sees seven providers per year; if the patient has a chronic condition it can be many more than that. These seven providers don’t work together. They’re employed by different organizations, work in different locations and likely use different medical record software. This means that there are seven separate records in seven different places containing seven separate sets of information for only one patient. This isn't just wasteful, it makes it impossible for providers to work together to optimize patient care.

Real estate, healthcare and many other industries need software that doesn't simply get the same job done seven or ten times across disparate organizations but instead brings all of the stakeholders together to use a single, shared record.

Of course there are a number of challenges associated with building this type of networked software -- not the least of which is getting disparate stakeholders to agree to share important information with one another. But I'd guess that a big segment of the next generation of multi-billion enterprise startups will build software around sharing and networks as opposed to silos and features.

A List Of Health Tech Startups

For a while now I've been keeping a running list of the health technology startups I come across sorted by the category they compete in. There are about 100 companies on the list.  I've moved the list over to an open Hackpad that you can find here. Hopefully this list will help people better understand what's happening in the industry, research competitors and even discover new investment and job opportunities.

I've left the Hackpad open so that anyone can add a company or category. Please add any that I've missed (I'm sure there are a lot).

As we move to the "Post-EHR" world where innovation is led by patient and provider needs as opposed to government mandates, I'm sure we'll see even more startups and categories emerge -- so I expect this list to get a lot longer.

The Next Big Thing In Healthcare Technology Will Start Out Looking Really Small

Fred Wilson had a great post last week titled, Bootstrap Your Network With A High Value Use Case. He points out how Waze's initial value proposition was to help drivers that like to speed identify speed traps. But it of course quickly expanded way beyond that and now provides lots more value to lots more drivers. It has become mainstream. Same thing with Snapchat -- it started out as a "sexting" app and has now expanded to more applications and is used by the mainstream. This is sometimes called the "bowling ball strategy" in new product development where you focus on knocking down the first pin by being very focused on one segment and one application and then you gradually knock down more pins (segments & applications) over time until your product works for the mainstream. The idea is to find a narrow niche that loves what you're doing, refine the product and expand from there.

Related to healthcare, this blog has talked a lot about centralizing patient data with the patient, as opposed to multiple medical records across multiple healthcare providers. Most would agree we need to get to this place but the path to getting there isn't terribly clear. Patients aren't clamoring for it yet and there will likely be some resistance from software vendors and healthcare providers as it flies in the face of the strategy of owning the data and, by extension, the patient.

My guess is the way that we're going to get there is similar to the way that Waze built a massive maps business and Snapchat built a massive photo sharing business -- it's going to start with a small niche.

I can see an application that has built a network of highly engaged users with a very specific and highly sensitive medical condition that shares important clinical information back and forth between provider and patient becoming the starting point for consumer-driven patient data. Big software vendors will likely ignore this application because it impacts a small niche and the patients will be highly engaged because their affliction is such an important part of their lives. Once the product is refined it can be extended to other patient segments with other medical conditions and it'll grow from there.

As Chris Dixon likes to say, "the next big thing will start out looking like a toy".

In this case, the next big thing in healthcare technology will start out looking really small: a simple tool that serves a very small, but highly engaged set of patients.

How Mobile Is Impacting Facebook & Healthcare Strategy

Many people used to believe that Facebook was an extremely defensible business and that it would be almost impossible for another social network to compete. It has grown to an enormous scale with massive troves of data and more than 1.5 billion monthly users. The thinking around their defensibility was that because all of your friends and photos and updates are already stored on Facebook, it would be tedious and unnecessary to switch to another social network. Everything you need is there. Why go somewhere else?

Facebook did have quite a bit of defensibility back when the predominant access point to the service was the desktop web. Moving your data to a new social network was painful and impractical. But now that the main access point to social is our mobile phone (more than half of Facebook’s traffic comes through mobile) things have changed dramatically.

We now carry around all of the key elements of a social network on our cell phones. Our phones carry our location, our photos and our address book and allow us to message anyone at no cost from anywhere in the world. With the click of the touchscreen we can view and connect with all of our friends on a new social network and instantly recreate our social graph. We can take a photo and instantly send it to a multiple social networks. We can easily join different social networks with different groups of friends focused around different needs. The friction of leaving Facebook and joining a new network has disappeared. This wasn’t possible with the desktop web, or it was at least much more difficult.

As a result of the increasing use of mobile, we’ve seen lots of new social networks emerge (there are now dozens of social networking apps with 1 million+ downloads in Apple’s app store, including Kik, WhatsApp, Tumblr, Google+, Instagram, Snapchat and many others).

This increased use of mobile has reduced the friction of launching a new social network to near zero and as a result has shifted ownership of data away from the network and back to the individual. Trying to own the data and lock-in the consumer is no longer a viable strategy.

Facebook is well aware of this and has adjusted by rapidly buying up many of these new networks. We’ll likely see more acquisitions like these in the months to come.

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Over the last several years, large healthcare provider organizations and healthcare software vendors have been employing a similar strategy to that of Facebook. Health systems have been growing by buying up ambulatory, community-based sites and employing doctors to build out giant systems that can offer clinical services across the entire continuum of care giving the patient no reason to go anywhere else. In parallel, providers and software vendors have been creating a single patient record (including blood tests, physician notes, imaging and other data) that flows across the entire provider organization and can be easily shared with providers across the system. This avoids all of the classic frustration associated with having to fax your x-rays from one provider to another. Everything exists on the web in one single record. Providers then roll out a patient-facing portal that lays across the patient record where the patient can access all of their data (mostly through the desktop web).

The strategy is simple. Providers are telling the patient to 1.) stay with us because we do everything and you don’t need to go anywhere else and 2.) you can’t go anywhere else because we have all of your data.

But as we saw with Facebook, now that a consumer’s primary entry point to the web is their mobile phone, this strategy has some flaws.

Not only do our phones enable messaging and carry our location and address book and photos, they can also carry data on our movement, our sleep, our heart-rate, the prescriptions we’re taking, our body temperature and, with the use of implanted devices, much, much more. This real-time data that we carry on our phones is arguably more valuable than the data stored in our clinician’s patient record that only gets refreshed while we’re sitting in the examination room.

Increasingly, providers will own some patient data but the patient will own more data and better data.

Like Facebook, healthcare providers are trying lock in their customer by owning the data. But the increasing use of mobile has changed the game. Just like social network users can effortlessly syndicate their own data out to multiple social networks, a patient will be able to syndicate their real-time clinically relevant data out to multiple providers, regardless of which system they’re associated with.

Mobile has put patients in the driver’s seat.

Meanwhile, with the emergence of home care and tele-health and urgent care clinics and apps and implants that manage more serious and chronic conditions, in many ways healthcare has actually become more fragmented. The traditional providers may be consolidating, but new players are creating new channels for care and causing more fragmentation across the industry. Where and when and how care is delivered is being completely reshaped.

But unlike Facebook, large healthcare providers can’t buy their way out of this conundrum. First, because they don’t have enough cash (most are non-profits with microscopic profit margins) and second because healthcare is local. Health systems are no longer just competing with the hospital across the street, they’re competing with web services that are available to the global market.

As a result, large provider organizations are going to have to consider new ways of providing value and will have to select which segments of patients they want to serve.

In short, they can’t own the patient because they can’t own the data.

The idea of locking the patient into one network of providers was always a bit flimsy. But the strategy was somewhat understandable. A lot of this was driven by the trend towards value-based payments and the convenience of 'owning' a patient under that model.

But the lessons of Facebook are clear. Locking up the data is not a path to success.

Social networks and healthcare providers must focus on what they do best and focus on serving the consumer they want to serve and abandon their attempts to win by owning data that isn't theirs to own.

Disruption & Access

I came across thIs chart the other day on Twitter showing camera production from 1933 through 2014.

This chart is great because it perfectly illustrates the good and bad parts of disruption. Better, more portable cameras destroyed the incumbents (Polaroid, etc.). But at the same time these innovations massively increased access to and use of cameras (this is the point that most people miss). It's estimated that there were more photos taken in the year 2014 than there were in all of the years prior to 2014. That's incredible.

The fact is that while disruption can cause some short term pain it almost always results in a greater good for those in the industry. More people travel because of Expedia. More people go out to dinner because of Open Table. More people listen to music because of Spotify. More people get a ride because of Uber. And on and on.

This is perfectly analogous to what needs to happen in healthcare and education. We need the incumbent analogs to go away and the innovators to take over and give access to a lot more people at a much lower cost. We just need the regulators to get out of the way and allow it to happen.

Healthcare Technology: Who Owns The Data?

A couple weeks ago I was listening to a panel discussion with a bunch of venture capitalists and someone (I can't remember who) made the point that the value of so many of today's web services comes down to one question: "who owns the data?" For example, while Uber has some nice UI/UX, the real reason they're so valuable is that they own the data. For them, the data is knowing where all the cars are located. I go to Uber because I can quickly locate and communicate with the drivers in my area. I like the app, but the real value is the location data. Same thing with AirBnB. It's not the app, it's the data they have on all the properties that I'd like to rent.

With this in mind, last week I read that Stanford Healthcare announced that they built the first patient facing app that integrates data from devices such as Fitbits and Withings scales into Apple's Healthkit app. Apple can than transmit that data to the patient's provider through the provider's patient portal app (in this case, MyChart, which is built by Epic Systems, a huge health IT vendor that builds software for hospitals and health systems).

This is an enormous step forward for the integration of patient captured health data with provider captured health data. It's awesome news.

But as all of this finally starts to come together, it begs the question: who owns the data?

Or, at scale, which company benefits the most from all of this data floating around?

Stanford? Withings? Fitbit? Apple? Epic?

Well, Stanford is very local, and isn't terribly focused on data collection, so it's probably not them.

Withings, Fitbit and other device makers contribute a relatively small part of human health data so at least for now they're not going to own a large piece of the data pie.

Apple still only owns well under half of U.S. smart phone market share -- and that number is expected to shrink. And they own even less of the market share of the chronically ill patient segment that can really benefit from this kind of data exchange.

So that leaves Epic, the 30-year-old health IT vendor that currently owns a medical record on well over half of the U.S. population. They have long-term contracts with large providers and (presumably) a long-term contract with Apple and will likely cut deals with Android and other smartphone operating systems in the near future.

In short, more than anyone else, Epic will own the data.

But this raises all sorts of new and interesting questions and conflicts. Will Stanford allow Epic to share its patient records with other Epic providers? Will Stanford allow Epic to share its patient records with other health IT companies? Will Epic allow Stanford patient records to be shared with other health IT companies? Will Apple allow Epic to share data captured from an Apple device with data captured from an Android device?

As I've written before, it seems to me that in the long-term, the answer is a Mint.com for Healthcare, where the patient truly owns the data. But in the meantime, the question of "who owns the data?" will be watched closely by investors, app makers, providers, health IT companies and patients. It's going to be fascinating to watch this play out.

Mint.com For Healthcare

Vince Kuraltis, a healthcare IT consultant, tweeted this the other day:

He’s referring to the fact that each of his healthcare providers has a different patient portal run by a different IT vendor with a separate log-in and separate data and functionality. Providers are launching patient portals to allow patients to view clinical records, refill prescriptions, email their providers, etc. The point is to better engage patients in their health. It's a very important effort. But as Vince points out, the disconnected and fragmented experience can be really frustrating for patients.

This challenge is quite similar to the challenge that banking faced years ago as they took their customer experience online. Personally, I have accounts with Bank of America, Fidelity, eTrade, American Express and a few others. All of these accounts have separate web “portals” with separate log-ins. That's frustrating. But not really. Because I spend very little time on any of them. Most of my time is spent on Mint.com, where I’ve integrated all of these accounts into one place. From there, I can view all of my transactions and balances, track expenses and create budgets. It's great. It's has award-winning UI/UX and everything is one place.

Mint has taken the bottom-up approach. They started by building a platform for the consumer. And the consumer allows data from multiple vendors to be integrated into their account.

Healthcare needs a similar bottom-up approach.

We need a portal that allows us to integrate all of the data collected on us from our dentist that runs Dentrix software, our primary care doctor that runs eClinicalWorks, our gastroenterologist that runs Epic, our wife’s OBGYN that runs Cerner and our child’s pediatrician that runs Allscripps. All of that data could be neatly compiled into a really user-friendly website (and app), similar to Mint. If I move to a new area and select a new primary care provider, she could simply tap into my account and view all of my scans, test results, prescriptions, etc.

As we consider all of the controversy around forcing EMR vendors to become more interoperable and share patient data with one another, in some ways, you can argue that this isn’t their role.

Why should Bank of America freely pass data they’ve captured about me to Fidelity (a competitor)? They don’t want to do this because they want me to stay with them, not make it easy to use other vendors. Why is that any different than asking UCLA Medical Center to pass my data to USC Medical Center? It would be nice if they did, but I'm not sure it's the government's role to force them to do something that might not be aligned with their competitive interests.

The bottom-up, consumer led approach circumvents this entire conflict. We need a patient portal that starts with the patient, that allows providers (and their EMR vendors) to plug-in (if they'd like). Not the other way around.

Real World Healthcare vs. Venture Capital

Fred Wilson, the well-known venture capitalist, wrote a blog post last week with some technology predictions for 2015.  He touched briefly on healthcare:

the health care sector will start to feel the pressure of real patient centered healthcare brought on by the trifecta of the smartphone becoming the EMR, patients treating patients (p2p medicine), and real market economies entering health care (people paying for their own healthcare). this is a megatrend that will take decades to fully play out but we will see the start of it in 2015.

All of these predictions are spot on, of course -- the patient will become more and more in control of their care.

But if you talk to the people on the ground you'll find that these things aren't really being talked about or worked on at the provider level.

Case in point, John Halamka, the CIO of Beth Israel Deaconess Medical Center, considered one of the most innovative thought leaders in healthcare technology, wrote a post the other day reviewing some of the key health IT issues on his plate during 2014 with some predictions for 2015. In short, he's focused on implementing software that will facilitate accountable care workflows inspired the Affordable Care Act; meeting government electronic medical record adoption standards (Meaningful Use); and complying with government regulations around the protection and security of personal health information (HIPAA).

These are very different things than the things that guys like Fred Wilson are thinking and talking about. Venture Capitalists are completely focused on the patient. Real world healthcare operators (CIOs) are primarily focused on meeting government requirements.

This disconnect -- or, at least, that degree of separation from the patient -- isn't the fault of CIOs; they have no choice but to focus on the urgent and intense demands coming from the government to ensure that they continue to receive government incentives and avoid penalties.

Venture Capitalists are focused on where healthcare technology and the patient are going (e.g. where the money will be). Given the intense regulation, health system CIOs don't have that luxury.

All of that said, for the most part, I think government intervention into healthcare IT has been a good thing. Healthcare execs are totally focused on efforts to increase quality and reduce cost. Most stakeholders (providers, payers, regulators) have gotten behind value based care payment models -- the winds are all going in that direction. And providers are now fully onboard with electronic medical record adoption (at last check ~80% of providers are using them). None of this could've happened this quickly without government intervention.

But now that the groundwork is laid, it's time for the government to back off a bit and let the market start to drive more of the innovation in healthcare IT. Providers need the room to move their businesses and IT investments away from meeting the requirements of restricting, top-down government initiatives and closer to providing tools that are centered-on and built around the needs and desires of the patient.

Enterprise Software For Patients

Most readers know that an EMR (electronic medical record) is the back-end software that runs a healthcare organization (think ERP for healthcare). EMRs have been around for a while. Recently most large hospitals and health systems have begun building out the patient-facing version of their EMR; allowing patients to communicate electronically with their doctors, refill prescriptions, schedule appointments, view clinical information, etc. I've written at length about the differences between B2B software and B2C software and how B2B software is generally not very good (particularly from a usability perspective). And it's not very good simply because it can get away with not being very good. B2B companies really just need a good salesperson that can lock-in long-term contracts to be successful.

B2C companies, on the other hand, need an incredible product to be successful. If your user experience isn't flawless, you cannot survive in the B2C space. The switching costs for consumers are near zero -- the user experience must be incredible. Product is much more important than distribution.

Applying this to healthcare, if you're a hospital and your EMR is hard to use, your employees will still use it because they have to.

But if your patient portal is bad you will lose patients instantly. It's too easy for patients to switch to something else.

The Healthcare Information and Management Systems Society (HIMSS) published a good report last month talking about patient portals.  They noted that despite the difficulty of building a wonderful online consumer experience and the totally different skill set required to execute on it, 80% of hospitals surveyed chose their patient portal vendor simply because it was the same vendor that provides their EMR (the top three portals are made by Epic, Cerner and McKesson). All of these vendors have been building B2B enterprise software systems for more than 30 years. They're all wonderful companies. But they have no idea how to build a patient facing product. Their management, engineering talent, sales force, culture and DNA is all about B2B. They have almost no chance of building a world class consumer product. That's not a knock on these companies, it's just reality. You can't be really good at both.

As we transition to a world where the patient is in the drivers seat, exposing patients to old fashioned enterprise software code is a terrible idea. Hospitals shouldn't let a piece of software touch their customers unless it's been vetted and tested fully and it's clear that patients love it. If you check out the satisfaction scores for most patient portal apps you'll find that most patients despise them (one of them had 2,000 reviews in the iOS app store and more than 1,500 of them were only 1 star).

Patients are becoming consumers. They want slick, easy, mobile, beautiful, simple and seamless web experiences. If the software that touches patients doesn't give them that they're going to go somewhere that does.

Now, in defense of these hospitals let it be known that there aren't a lot of great consumer-focused software companies building out patient portals. So in the short term they might have no choice. But I'd encourage CIOs that are making patient portal investments to consider the consumer, and to cautiously enter into flexible and short term contracts with these patient portal vendors.

You wouldn't buy groceries from the company that washes your car and you shouldn't buy a patient portal from the company that built your EMR.