How Not to Kill Clinical Workflow Innovation

A PLG-based Model For Clinician-Driven Innovation

Healthtech go-to-market (GTM) is a hot topic, especially with new gen-AI based tech everywhere. What is the best way for hospitals to digest innovation? How do they choose the right innovation? Do VCs need to start buying hospitals to make it easier? 

This is a pain for hospitals with limited IT resources that need to carefully justify every tech project they choose to add to the queue.

It’s a pain for clinical teams. They are tired of top-down innovation that fails to help. They gave up pushing technology projects because it’s so difficult.

It is a pain for founders. They dedicate their time and talent to improving healthcare, only to hear time after time “I understand how this could dramatically help clinicians and patients, but who is going to pay for it?”.

One thing is clear: technology alone will not save health systems. New business models will. 

An important model to review in this context is Product-Led Growth (PLG). PLG introduced a transformational leap in work software. It skipped healthcare. This article explains why and proposes a new model that adapts PLG to healthcare.

A decade and a half of product led growth

Around 2010, Enterprise Software was disrupted by players like Slack, Github and DropBox. Much of it had to do with workflow: critical business intersections where stakeholders needed to align daily. For example: helping developers continuously collaborate and release new software (GitHub). Helping designers share design guidelines with developers (Figma). Helping teams manage shared tasks (Asana, Trello).

These players invented a new GTM model that challenged the ‘classic IT sale’. Instead of selling ambitious software tools to senior IT leaders and then managing long and frustrating implementation projects, they went directly to the end users. 

• They solved real problems for users.
• They solved them immediately.

The end users didn’t have their own budgets. Potential customers with zero spending power? Never a good start. But these software players showed that with persistence it was possible to change the rules of the game. End-users started using the products, either for free or at a minor subscription cost. With fast feedback cycles, the tools got better fast. The users could show results that impacted the business, and surfaced these results to their managers. The managers could get the budget. 

In 2016 Blake Bartlett coined the term Product-Led Growth (PLG) to describe the motion that transformed enterprise software: “a growth strategy where the product itself acts as the primary driver of acquisition, retention, and expansion”.

The clinical workflow catch

People talk about how healthcare should borrow best practices from other industries. But PLG, a model that transformed tech, never made it into the hospital. For anyone who has experienced PLG in other industries, the potential of introducing products directly to clinicians is clear. Healthcare VC opinion-leaders such as Andreessen Horowitz Julie Yoo and Bessemer Morgan Cheatham have been talking about Direct-to-Clinician for a few years. Deloitte’s report about the healthcare talent emergency stressed the importance of involving clinicians in decision making.

There’s a great promise in PLG for healthcare, but PLG does not seem to work in the clinical workflow space. The reason is simple: clinicians are not allowed to try new software. 

Clinical-workflow software typically includes some level of patient health information. The hospital’s IT organization must therefore approve the implementation of such software. It needs to make sure that the software complies with security and regulatory requirements (e.g. HIPAA), and that it can integrate with the hospital systems. Typically, IT would drive the implementation, integration, maintenance and security of any software the clinicians use. This means every new vendor becomes a huge project.

With limited resources, IT leaders can consider only top-priority software projects each year. The result is a years’ long queue, and a long sales-cycle that can easily kill a startup. The system naturally becomes biased towards generic software that covers as many use cases as possible to justify the heavy lifting. It also becomes very resistant to change. 

Healthcare innovators that build tools for clinical workflow need to show results to survive. They must appeal to the decision makers’ priorities and win the budgets. The direct result of this GTM is that software for clinicians is designed in boardrooms. This is the opposite of PLG. 

Then everyone goes to conferences to talk about clinicians’ burnout.

Introducing the ‘License to Innovate’ model

A new model called ‘License to Innovate’ offers a path to making PLG work in the clinical workflow space. The model enables a partnership where the hospital lets a software vendor be a PLG agent, and the vendor takes the implementation risk. Sort of reverse-engineering PLG.

The vendor is committed to work within predefined guardrails:

• Security and compliance automation.
• Integration requirements after phase 1.
• SaaS pricing.

IT is not involved in phase 1. They don’t plan the implementation. They don’t enforce usage. They don’t train or support. This part is critical. It requires executives to give over some control and let the vendor engage with users within the guardrails. 

With ‘License to Innovate’, clinicians can get started quickly, provide feedback, iterate and show results. They don’t worry about security, compliance or budgets. They can focus on solving problems.

Vendors get to be insanely focused on the clinicians. This is PLG.

The hospital also wins – if the vendor fails to get buy-in – nothing happens. If the vendor gets buy-in: the hospital reaps the benefits with a faster return on investment.

Small budget. Open Mind

As automation tools make continuous monitoring of HIPAA and SOC2 compliance seamless, EMR integration gets easier, and cloud-compute is mainstream – technological and regulatory obstacles fade away.   

The first health-systems to adopt models like ‘License to Innovate’ will achieve a rapid and low-cost productivity and performance improvement. It will be easier for them to attract and retain talent. No need for a big IT department or big budget – just an open mind.