Missed ViVE? I got you.
Key takeaways for B2B healthcare startups and what I learned from enterprise buyers
Like many investors, operators, and policymakers, I recently returned from Nashville after a jam-packed four days at the ViVE health conference. To say that it was productive, insightful, and fun would be an understatement. In 36 hours, I had 12 meetings, attended 7 panel discussions, visited dozens of startup booths, and maxed out my tolerance for country music.
With the ‘who’s who’ in health under one roof and hundreds of vendors showcasing novel therapeutics, cutting-edge medical devices, tech-enabled services, and SaaS platforms, it can be tough to prioritize how to spend your time. To ensure that I made the most out of my ViVE experience, I set a goal for myself before venturing into the conference hall — pun intended ;).
By the end of the trip, I wanted to:
- Become a better steward of knowledge, support, and guidance for my portfolio companies when it comes to navigating the B2B sales cycle.
- Ask smarter questions when evaluating net-new opportunities. Specifically, for businesses that sell to payors, providers, health systems, or employers.
To achieve this aim, I made it a point to speak with people I don’t usually have the chance to interact with, such as representatives from Medicaid and commercial insurers, payer-affiliated CVCs, enterprise health systems, and employee benefit managers.
For those intimately familiar with this complex, red-taped world, my learnings might seem unremarkable. However, hearing each of these stakeholders’ priorities and interests repeated back at me for four days straight really helped things click, and I hope this post conveys a similar “ah-hah” moment for others navigating the broader healthcare landscape.
Health & Hospital systems
Priorities
- Operate faster and more efficiently
- Do more with less (find cost savings)*
- Grow the business through specialty services
- Address workforce burnout
- Improve overall ROI
- Improve patient outcomes
Areas of interest
- AI for automation (e.g., virtual scribe services, claims filing)
- SaaS to streamline workflows
- Risk compliance/data security tools
- Staffing/resource management
- Solutions that improve timeliness, communications, and administrative ease
*Health systems are cash strapped now that the Public Health Emergency funding has ceased. They are looking for any opportunity to grow while cutting costs.
Medicaid
Priorities
- Eliminate health inequities (specifically, for Black and Hispanic populations, as well as women)
- Expand access and affordability for patients in rural care deserts
- Improve patient outcomes by tackling root-cause symptomology
- Lower fees at risk
- Improve timeliness, communications, and administrative ease
Areas of interest
- Preventative care solutions focusing on SDOH (Social Determinants of Health)
- Solutions that meet patients where they are and prioritize culturally competent care. I.e., leveraging providers who look and sound like the demographic being served; speaking at least English, Spanish, and Chinese.*
- In-home healthcare
- Businesses that leverage performance-based, fee-for-service models (e.g., value-based or utilization-based care). Bundles are tougher for Medicaid to approve if components of the bundle vary state by state.
- AI for automation (e.g., prior authorization, claims filing)
- Anything that will help states reach their identified financial, access, clinical, and patient engagement performance goals (set annually).
*One senior executive I spoke to from Healthfirst made it clear that having all three languages (English, Spanish and Chinese) is now table stakes for successful Medicaid partners. Multiple language proficiency is fundamental to being considered for a Medicaid pilot, which typically run 12–18 months with ~1,500 — 2,000 patients. Pilots do not guarantee paid contracts or work renewal.
*Under the Biden Administration, states are now being encouraged to propose innovative Section 1115 waivers that expand coverage, reduce health disparities, and/or advance whole-person care (including addressing health-related social needs). Startups focusing on these value propositions will have a much easier time being approved.
Commercial Payers
Priorities
- Reduce hospital readmission rates
- Lower/prevent ER visits
- Prevent costly surgeries
- Improve patient outcomes while lowering cost of care
- Improve administrative ease
Areas of interest
- Chronic conditions management
- Post-op rehab (virtual PT/OT)
- Tech-enabled acute care/specialty services, specifically for musculoskeletal (MSK) medical conditions and chronic pain
- Early cancer detection (solutions with high sensitivity and specificity)
- AI for automation (e.g., prior authorization, claims filing)
- Anything that delivers ROI in < 2 years — the average lifetime of an employee on a commercial health plan*
*Sadly, preventative care seemed like less of a priority for commercial payers, given the longer timeline needed to see results.
“Any value that would be generated [from preventative care] will likely be seen by our competitors,” said one investor from Cigna Ventures. Further proving this point, the same CVC told me that their team had recently conducted significant research into the ‘food as medicine’ space, but the Investment Committee — comprised of c-suite executives from Cigna’s insurance company — could not get behind the deals because of the longer ROI timeline.
Employee Benefit Managers
Priorities
- Retain employees longer (particularly, women)
- Help women back to the workforce quicker (postpartum)
- Keep the employee population healthy — mentally, physically, emotionally, financially
- Reduce the caregiver burden
- Improve overall mental health/reduce employee burnout
Areas of interest
- Family planning/egg freezing
- Menopause
- Maternal health
- Whole-family mental and behavioral health
- Addiction and rehabilitation
- Gender-affirming care
- Caregiver services
- Anything that will improve employee’s general health & wellbeing to increase retention and employee satisfaction
TL;DR: Your B2B sales strategy must be fit-for-purpose
After digesting the above, I hope it is clear that there is no one-size-fits-all approach when it comes to selling to B2B healthcare customers. And for founders struggling to scale their businesses, it might not be that your company isn’t innovative enough to garner interest, but simply that you’re going after the wrong customer.
Outreach to payers, providers, health systems, and employers should be crafted intentionally, and pitches used should highlight key value propositions or “reasons to believe” that match the priorities of each entity’s incentive structure.
In some cases (as with Medicaid), it also helps to have an internal advocate when attempting to be credentialed by insurers. For example, if your company has achieved great results with a particular provider or hospital system, leverage testimonials from that provider — or ideally, an LOI for continued use — to make the case that you already have the patients lined up to receive care, showcasing little downside and easy setup.
A word to investors
Unlike with other sectors, margins achieved in healthcare (especially with Medicaid) tend to be lower than 40-50%. However, the Total Addressable Market for health services usually counteracts this loss.
Given this dichotomy, it is not helpful to compare GPM (gross profit margin) with what you’d see in categories like consumer tech, fintech, enterprise SaaS, or CPG. And it is also not helpful to completely write off early-stage healthcare businesses if they don’t yet have B2B customers. Oftentimes, these startups need to be able to prove clinical efficacy through improved outcomes (read: D2C or cash-pay models) before they are able to sell to payers, providers, health systems, or employee benefit managers, which is also their ideal end-state. Understandably, documenting improved outcomes takes time, as people typically need 12–18 months to improve. So having patience (for patients) is a virtue.
That said, if you’re investing in pre-seed or seed-stage tech-enabled health services, you should expect those companies to be in the data-gathering phase. And if you’d prefer businesses to be partnered with insurance co’s, hospital systems, or employers before you place a bet, you’re better off investing in a later round (or a non-services-based business, such as risk compliance, workforce SaaS, or automation tools).
Parting Thoughts
In reflecting on everything I learned at ViVE, I left Nashville feeling both hopeful and crestfallen. Despite the massive innovation happening all around us, it is clear that the U.S. healthcare system is still as fragmented and misaligned as ever.
Commercial insurers are still paying for sickness rather than tackling root-cause issues. Hospital systems are short-staffed and cash-strapped, leaving quality of care to suffer as workforce burnout worsens. Employers are facing one of the steepest cost-hikes in recent history. And chronic conditions, care inequality, and the broader mental health crisis are on the rise.
Reassuringly, however, the consistent throughline across sectors lies in the ultimate goal of improving patient outcomes, which was a top priority for every B2B stakeholder in some way, shape, or form.
Although being at ViVE underscored how real some of these issues are, it also made me proud and excited to be investing in an industry on the cusp of constant change, with the mutual pursuit of helping people live longer, happier, healthier lives.
To the formidable founders I met this week — keep fighting the good fight. The world is undoubtedly a better place with you in it, and I am lucky to have crossed paths with you. If there is ever anything I can do to help, please don’t hesitate to reach out.
Until next year…
