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If you saw the movie, the Pursuit of Happyness, you’ll be aware of GLIDE, the Bay-area center for humanitarian programs.   Somehow or other, they’ve got Warren Buffet involved and if you bid quickly, you can have lunch with him for a mere $80,000.

I do like that the “Free Shipping” tag.   Nice to know you won’t need to fly Mr. Buffet, who owns his own jet company, out for a snack at Au Bon Pain.

It’s that time of year again: time for the RFPs.

Every time June rolls around it seems as though the website project that’s been shelved comes around again for its due and to sum up the hopes and dreams of said project, we receive an RFP.

What perfect way to begin a relationship – with lots and lots of paperwork.

Let me share with you the sad truths about RFPs and why we reject 90% of the ones we get: a good vendor can tell a bad RFP within about three pages.  You may think, “But we worked so hard on it, why won’t you respond?” or conversely, “If you don’t want our money, fine!”

These arguments don’t really work on me: as we’re in the enviable position to have many really awesome clients and no bad clients, I am determined to keep it that way and see no reason to change.

There are three kinds of really bad RFPs:

1. The Kitchen Sink RFP whereby a hospital gets together and makes an unprioritized wish list of “stuff” they wish they had and seeks a “ballpark” quote.

The underlying theory: if we put it all down, we can see what we can get in under budget.

How to recognize one: you make a bulleted or numbered list of 20+ items.

The results: all you’ll get back are lies, lies, and more lies.   Why?  Well, you’re lying in the first place.   Building a site with a real CMS is far more important than including a gift shop for your volunteers.  And becuase you can’t decide on that, communicate it effectively, and disappoint people at the beginning of the process, you’re counting on a vendor to come in and take the heat.   Does that sound like a project you’d want?

2. The Consultant RFP whereby a hospital hires a consultant to help them build the point-by-point items that are most important to them and susses out functionality before cost.

The underlying theory: a consultant will help us stay focused, provide us an industry-standard RFP template, and manage the vendor responses so we don’t have to.

How to recognize one: your pocketbook feels lighter after every conversation.

The results: you’ll get back responses which conform to the consultant’s own opinions of how things should be done and then, once you pick a vendor, the consultant leaves.  It’s an arranged marriage of sorts.  Except that instead of spending quality time with the vendor, you spend all that time with a consultant… who then leaves.   The problem for a vendor in this relationship is that we’re never sure if the consultant is speaking for themselves or for the client.  And, we note, many consultants mysteriously end up recommending the same vendors.

3. The Checkbox RFP whereby all features and requirements for the project are reduced to Yes/No questions and then priority ranked, ordered, sorted, and priced.

The underlying theory: Excel can make our decisions for us.

How to recognize one: it’s unreadable to human beings and is often over 1″ thick when printed.

The results: you will get back shockingly few respondents and even though you went through all the trouble, you will end up with canned results nonetheless.  Then your Excel genius will be ticked off and you’ll pick the vendor who got within a mile of filling out the paperwork properly, which often is the one who is most desperate for your business… because they had the time to put into filling out this immense paperwork.  Mmmm — a recipe for success!

Look, there’s about three companies in the United States who are qualified to do this work at all and another four or five who have some overlapping experience in the market.   The main reason you don’t need an RFP is that the world of folks willing to provide services to healthcare is incredibly small.  (And the world of talented folks is even smaller…)

You could spend a single day hearing 1 hour pitches from everyone, cut your list to three, and then go chat up their references.   Your success, in any multi-disciplinary web projects, is not going to rest on features but on selecting a partner you can trust will deliver.

Bad RFPs scare away good vendors and appeal only to those who are desperate for cash.  The point of an RFP is to de-personalize a purchasing experience but with a web project, you need a partner, not a dealer.

And please note next time you visit: the Mayo Clinic does not have cheer cards.

One of the funny things about running a web company in the healthcare space is that there’s a lot of interest from the venture capital community.   And about once a month, someone from a VC firm will call me up, ask me a few questions about the space, and conclude that yes, we don’t need their money.  (Admittedly, I start the conversations with, “I’m happy to talk to you, but we’re not looking for your money…” so this idea has been well-planted in their minds.)

Yesterday it was Michael Segal, from Bessemer Venture Partners, whose name I mention as I promised him I would: he subscribes to a Google Alert for such name dropping events such as these.  Bessemer is a fine fund — one of two family-run VC firms that I know of which has thrived — Venrock, from the Rockefeller family ventures, being the other. 

I always enjoy these conversations since they follow a predictable pattern: the caller has attended Harvard, is learning about the healthcare space, inquires about competitors, asks about our products, asks about the market, concludes with a vague interest and I suggest if they ever have questions about the space, they should feel free to call.  

I never hear from them again.

I’m not knocking VCs — in fact, someday I think it’d be fun to join the ranks – but their job is increasingly hard given the stock market, decreasing talent who can run large companies, and a shrinking need for their services.   Thanks to web technology becoming less expensive every day, the need for $10m or $20m has been cut to a few hundred grand.   That’s actually tough for VC firms since they want to put the most amount of money in the most likely winners and focus their portfolio on what they need to manage.  If you had a choice between putting $10m to work in one company or $1m in 10 companies, which would you pick?

I’d go for the latter, but that’s my outlook as a passive investor.  When you’re managing a $350m fund, you pick the former, believe it or not.

So why the ramblings about VCs other than to tweak my new acquaintance?  Nearly every HIT vendor needs to take outside capital to get a company going because of the sales cycle in healthcare.   If one were to custom build an application for a specific hospital and then try and roll it out globally, you will fail. 

The sales/marketing cycle for healthcare is easily 18 months, often much, much longer.   HIT companies need to capitalize accordingly.  In other words, hosptials are loathe to make decisions quickly and that drives up their costs, which requires outside capital to fund the sales cycle, and that drives up the costs.   And when the companies are big enough and need to pay back the VCs?  They go public… which drives up the costs.  So anytime you see large amounts of outside funding flowing into a healthcare company, especially when they are profitable, you can be sure prices will rise within 18 to 24 months.

All that said, I don’t see any other way for HIT vendors to get into the business except if you’re lucky or very, very good coming out of the gate.

In the (admittedly small) market that we are in, MedTouch is known for delivering results at a considerably higher quality and at a very fair price, still less than what others charge.  I think that’s such a competitive advantage, I’m not sure we’d trade that for a few million in funding we wouldn’t need anyway.  Maybe someday, we’ll have the Starbucks-sized idea, but for now, we’re content to get smarter with each new client – and boy, do we have some exciting announcements coming out regarding new clients — as the industry moves away from e-health and towards Health 2.0

More about that change, later this week…

UPDATE: A had some complaints from VCs about a comparison I made to the banking industry, which I thought was a fair critique given it wasn’t the point of this article.  Hence, rescinded. 

I’m back from the AMA Houston SIG meeting on healthcare and technology, presented by:

Plus Katie Laird, from Schipul, moderated the panel.  

We had about two hours to present, take questions, and wrap it up.  I felt the Q&A could have gone on for another two hours, the audience was so engaged.   The most helpful aspect was that each presentation built on the previous.  Ours was focused on why healthcare was changing due to social media and then Chris and Jennifer followed up with the successes and challenges of from an inside the hospital point-of-view.  (Chris does it because it’s a clear passion, in the midst of other jobs; Jennifer is fortunate enough to have this be her full-time position.)  Jay, from CareFlash, finished up with a demo of sorts to show the benefits of social networks to the caregiving community.

My favorite thing about speaking at conferences — aside from my desire to one day be a talking head over a blue screened city backdrop on CNN – is that it’s a rare time when I can be completely honest with my opinions since the room is not full of clients at varying stages of engagement with what we’re doing.   That resulted in a neat exchange with an attendee (Richard Laurence Baron) on his blog over his concerns that I predicted the death of the written word (I didn’t, but you could take some comments that way) and what it meant for his life as a freelancer (hopefully, more work for more innovative.)

Most of all, this conference forced me to examine our embrace of social media for the company — we now have a MedTouch Twitter page; thank you Jennifer — and our clients.   For example, I’ve had this blog sitting outside our main site because I wanted to make sure that I’d write enough to keep it up (it’s been a year!) and also, I wasn’t sure our point of view would warrant exposing it to every visitor to our site.  Thanks to this conference, I’ve figured it out, so in a few weeks, we’re going to tear this down and rebuild it stronger.

Until then, feel free to talk to us about your hospital’s social media needs.

From the Boston Globe, Walgreens looks to open retail clinics in Mass:

A Take Care spokeswoman, Lauren Tierney, said yesterday that the company expects to open the first of its Bay State clinics in the fall. The company currently operates 173 clinics in 14 states and intends to have 400 running nationwide by the end of the year.

Tierney said the company was attracted to Massachusetts, in part, because of the state’s drive toward near-universal health coverage.

“We applaud the progressive efforts Massachusetts has taken to cover more lives in the state,” Tierney said. “And we hope that Take Care health clinics can provide more access points to get patients into the system.”

This is the quote that has me scratching my head. Why is universal health coverage good for a retail clinic outfit? Shouldn’t it be the opposite — that, as previously posted, 50%+ of the walk-in care has no insurance, thus you’d go where no other alternatives exist? Take Care was acquired last year after building about 100 stores and, I think, Walgreens was right to see the opportunity.

I suspect the play here is less the coverage for healthcare, but more the pharmacy, for which any health plan can provide legitimate, cost-savings benefits. After all, Walgreens (and CVS) are in the pharmacy business. This after Walgreens targets 7,000 stores nationwide and Rite-Aid buys up Brooks. If you’re in the Northeast, you know that the CVS store is as ubiquitous as Starbucks, but that won’t even match the super-chains:

Although the drugstore chains can’t beat Wal-Mart Stores Inc. or Target Corp. on price for health and beauty aids or other items, they are superior on convenience, Mr. Hertel said. “Consumers get choices, pricing, hours, and a lot of the benefits that go with 24-hour access nationwide to a prescription system,” he said.

Ah, it’s store placement — that’s how the drugstores will compete.

UPDATED:

So this tells me that Walgreens’ or CVS’ or Rite-Aid’s comparative advantage lies in:

1. Being open after hours to suggest they are “always open”
2. Locating themselves fractionally closer to you than the big box (Wal-mart, Target) retailers

Therefore, population density and socio-economic makeup is critical to the drugstore chain’s survival as they aren’t as efficient as the big boxes at logistics. Since they have to charge higher prices for that inefficiency, they can make it up on smaller, more profitable sales.  (Instead of the CostCo size tube of… well, never mind.)

Hmmm. If I owned a drugstore chain, I’d try opening a store next to an ER in a well-heeled zip code to see if it out-performed one with a clinic in it…

Remember when Cerner dissed Google Health?  This news came out today in the Globe about Google Health and BCBS of Mass:

Come this fall, members of Blue Cross and Blue Shield of Massachusetts will be able to go online to look up their healthcare claims and some medical records, which the insurer says will help patients manage their medical care and have more productive discussions with doctors.

The feature is being offered through Google Health, the new healthcare Web portal recently opened by the Internet search giant based in Mountain View, Calif. Blue Cross-Blue Shield said it is the first health insurer to sign on to the service.

Since Cerner sells its goods to hospitals and hospitals are reimbursed by health plans and those health plans are demanding more up-to-date, quality information on patient outcomes…  Hmmm.  Seems like those patients are going to want to use their Google Health accounts — backed by their health plans — when they show up for a doctor’s visit.

And kudos again to the great state of Massachusetts, the right in the center of healthcare innovation.  (Did we mention we had an office here?)

About 50% of the time we get asked to do a project for a new client, they are doing so in response to updating their brand. Research has shown — to no one’s surprise — that the tri-colored yellow, pink, and blue marks do not signify academic excellence. Or there’s been an adjustment to the moniker, usually to broaden the scope of the hospital and allow it to brand other, non-critical care facilities.

Here in Boston, Tufts New England Medical Center is aggressively advertising itself as… wait for it… Tufts Medical Center. Not much of a change, but Tufts and New England Medical Center joined forces back in 1968, back before you could love a national coffee store chain. So, they’ve taken on a good deal of expense and put out new, innovative ads merely to remove the words New England. Might they have higher, more national aspirations?

The funny thing about brands is that what one defined you can now entrap you. And keeping your brand up-to-date, but not losing its fundamental value is tricky.

See the hubbub about revitalizing the Strawberry Shortcake brand – you know, the scented 1980’s kiddie doll? — and see how seriously they take “de-fruiting” the image.

How fruity-licious is your hospital brand?

I’ll take comments nominating the most 70’s stylish hospital brands below.

Kudos to the NY Times for an engaging piece about infertility.  With bright, compelling photos of the women in their homes and an audio accompanyment, it’s remarkable how well the piece works online.  After all, aren’t they a newspaper?

This is exactly the kind of content health consumers want to read — real stories, decisions, and backgrounds of people making healthcare decisions.  How easy would it be for your hospital to do this?

Today, I attended a talk by Alicia Ledlie, Senior Director, Health Business Development of Wal-Mart Stores, about the future of retail clinic care within the largest retailer on the planet.

Wal-Mart has already changed healthcare for low-income, underinsured Americans by lowering the cost of generic prescriptions to $4 — and, by extension, a larger population than their customer base thanks to Target and competitors joining in. The low-cost, “pass the savings on” mentality extends to their philosophy of clinic care — walk-in costs are $40-60 a pop, and include some basic testing services.

Here’s what Wal-Mart is doing right with healthcare:

1. Extended hours: they are open 8am to 8pm M-F and also on weekends from 9 to 5. That’s about twice the hours of an average doctor’s office.

2. Access to care: 55% of their population served by these clinics have no insurance. (Compared to about 40% for the average walk-in clinic.) This should be a measurable community benefit as it removes a strain on the ER, where visits run $1,000 or more and are often written off by hospitals anyway.

3. Fixed costs: by posting fees upfront, they reduce the likelihood that a potential patient won’t just walk away. As Ms. Ledlie says, “If you have $50 in your pocket and it costs $60, you won’t go.” A greater proportion of the community can afford to receive care and therefore elects for care.

Now none of these are unique to Wal-Mart, except for maybe the incredible access of retail space. But with their scale, Wal-Mart can offer a few more things. Through an innovative partnership model, Wal-Mart becomes a landlord to a hospital-sponsored tenant — either a direct offshoot of your hospital or a third-party relationship that refers into the hospital system.

Also, they’re proving eClinicalWorks as an EMR for the patients. (I guess that makes it a PHR, but go with me here.) Without the baggage of a system from the 70’s, they can roll-over a real, hard-ROI EMR platform… for those 130 million customers that pass through their doors.

What are you doing to make life easier for your patients that Wal-Mart can’t do better, cheaper, or faster nation-wide?

One of my favorite things about being a CEO is that I believe it is forwarding my life’s dream of becoming a pundit.

Pundits, you will note, only discuss the future and, the future being a distant and murky place, by the time one can prove you wrong, you’ve already moved on to the next, future subject.

I attend many, many conferences and I’ve learned a few tricks from some excellent keynotes which may be helpful to you establish yourself as a pundit within your organization.

First, show a lot of irrelevant but very cool technology. If, for example, you are asked to explain how to do service line marketing on the web to your internal team, show them a few screen shots of Second Life and explain, that in 10 years, we’ll all be avatars anyway, so what’s the point of actually trying to talk to consumers now? Your audience will soon lose you as you outline the future growth of massively multiplayer online games and begin thinking about more mundane tasks such as their checkbook balances and if they should get a new haircut.

Perfect. They are now putty in your hands.

Flash a few meaningless statistics you lifted off another presentation that lifted slides from a Forrester or Jupiter Research report. Show a few screen shots of the coolest things you’d like to do and end by showing a multi-million dollar website as a good example of what to do, even though you have a budget 98% smaller.

If anyone dares ask what the return on investment might be, explain that healthcare is complicated, that we can’t really assess the true cost of doing such things but that the future is now.

It’s important to maintain an air of righteous indignation to ensure you have the moral high ground: how can anyone question your conclusions? How can anyone point out errors in your data? To be a pundit, one must have an attitude of utter security about one’s opinions and then ensure one leaves before the future promised results.

So, a quick recap:

• Project at least 2 more years into the future as you plan to be at your organization
• Show kewl, unnecessarily expensive examples of what your organization can never achieve
• Back up your findings with a double-shot of opinion and imply anyone who doesn’t believe you is a dinosaur

I wish you the best of luck in your rise to the top. May we meet each other as fellow keynote presenters someday soon.