Product Market Fit in Health IT Training

By Dan Gebremedhin, M.D.


Several studies have shown that when healthcare workers implement new forms of Health IT (Electronic Health Records and other systems) their productivity drops as they are learning to use these new systems. (Click here to learn more about EHRs.) 

In attempting to solve this problem, our company has created a robust online training platform. The platform has proven effective in returning users to full productivity faster than the industry standard. Despite this evidence, customers have been reluctant to purchase access to the platform. In this blog entry, I’ll outline the evidence for the effectiveness of our product and begin to examine whether or not there is product market fit.


The Research
There have been a handful of studies that have looked at productivity drop with Health IT adoption. Bhangrava et al, found that providers uniformly dropped in full productivity by 25-33% for at least one month after EHR implementation. After 3 months out, internal medicine physicians returned to full productivity but a large subset of physicians never returned to full productivity during the remainder of the study.


A report by Clayton et al. out of Intermountain Health corroborates this data, by showing that their subset physicians did not return to full productivity until 6 months. Despite the drop in productivity, the physicians in the study increased their level of data entry significantly. This supports the argument that although EHR implementation decreases productivity, EHR use leads to more comprehensive care. 


iHIT Results
With the use of our platform technology and methodology, our customers return to full productivity within 4 weeks. Some customers have achieved full productivity within 7 days. From this superior margin of improvement compared to the industry standard, our clients have achieved an ROI of 4:1 and savings of > $1M. These results have been published separately at HIMSS 2011 and ACE 2011. (Click here to learn more.


Proven Results = PM FIT?
It would seem natural that with proven, published results, there would be significant demand for our product. With 13 healthcare organizations using our product, we have achieved initial traction. In reality, many of these sites were beta-sites that were upgraded to paid subscriptions to our platform. These existing customers did not have to face the same purchase decision that our prospective customers are currently facing. 


From our initial market launch in Q32010, we’ve had to adjust our pricing to find the willingness to pay (See below for a chart of our pricing trajectory over the last 10 quarters). We quickly learned that the ROI calculation alone was not enough to convince HCO’s to pay > $150k/year for access to training software. 


In focusing on unit economics, we’ve found that HCOs are willing to invest between $100 - 200 per physician per year in total IT online training spend. Further, we know we need to communicate the long term benefits and ROI of the product as opposed to implementation only. As this message is crafted, careful attention will be focused on our conversion rate which sits around 15%. In my estimation, if we can double this to > 30%, our CAC will drop significantly. I think then, we can say that we’ve hit PM Fit and are ready to scale the business. 

Source: Interal iHIT research


References
Bhangrava, et al. Electronic Medical Records and Physician Productivity: Evidence from Panel Data Analysis. December 2010. http://www.news.ucdavis.edu/search/news_detail.lasso?id=9665

Clayton et al. Physician use of electronic medical records: Issues and successes with direct data entry and physician productivity. AMIA Annu Symp Proc. 2005; 2005: 141–145. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1560588/

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