Kat Kuzmeskas, Founder and CEO of SimplyVital Health, says she has always been driven to create something. In 2015, while working as a Strategic Planner at Yale New Haven Health, she realized she wanted to find a startup opportunity in healthcare.
INNOVATION DESTINATION HARTFORD: How did you develop the idea for your startup?
KAT KUZMESKAS: A year in at Yale New Haven Health, I started brainstorming about ideas. I focused on what I was hearing from the clinical and administrative staff in terms of things they needed, areas that were weak, and areas for opportunity.
First we considered a national health information exchange, then I settled on quality metrics at the time—finding ways to assess quality in a hospital. I called up my former co-worker, Zack Manville, and said: Let’s start a company. He said: Okay!
Zack and I had worked together previously at Community Health Center, Inc. in Middletown, CT. We created a healthcare platform the company still uses today. Other community health centers have asked to purchase the product, which is really cool.
I knew we worked well together and we could create a product together. We spent November through May 2016 coming up with ideas, testing the market, testing the customers, and talking to a lot of mentors.
That spring, we got accepted to the Yale Entrepreneurial Institute, which helped us iterate ideas too. And in May 2016, we really set on the path of value-based care and block-chain technology, which is what we’re doing now. The technology behind block-chain creates an audit trail of activities that cannot be changed or deleted, which is really important for healthcare reimbursement.
We’ve been working with that idea, pivoting slightly a few times since then, but that was the main pathway.
IDH: Can you elaborate a little more about your experience working with mentors?
KK: Sure. Two people are the anchors for what really started this. The first one is Andrew Zehner, from the University of Connecticut, the second is Rick Stahl from Elm Street Ventures. I would attribute our start to those two.
We also relied on some of the other mentors who we worked with mainly through the Yale Entrepreneurial Institute at the time. I was also connected to Richard Guha, Entrepreneur in Residence at CTNext. He’s a really good mentor. So those were the main mentors who helped with our startup.
IDH: Tell us something about what it’s really like to be an entrepreneur.
KK: I think the thing that surprised me is the amount of emotional fluctuation that can happen in one minute. You can have the worst day and you can get a phone call that will totally change your outlook. Your day is always up-and-down.
When we first started, those ups and downs were every second. I would feel fully confident in what we’re doing, and then I’d go to a meeting or read an article and I would learn about a new direction of where healthcare was going, or change in laws that happened and I would think: We’re doing the wrong thing; we’re in the wrong direction. And then I would talk to someone who would tell me: Your idea is awesome! And I would go right back to feeling on top of the world again.
In the beginning, there was a lot of fluctuation within seconds. Now it actually it fluctuates between minutes, hours, and days. But I am very surprised at the amount of emotional fluctuation. I’ve never experienced anything like it before.
IDH: You mentioned pivots a couple of times. How have you rolled with having to change direction?
KK: We’ve experienced a lot of pivots. We handled them by talking to customers and talking to our mentors. Specifically with customers—I had a lot of conversations with healthcare providers to test the idea before we even had a platform.
At that time, we were thinking about focusing on quality metrics that had come down from the federal government. We were receiving the same feedback over and over. They kept saying: We don’t care about quality metrics, they are coming out of the electronic medical record anyway, and I’m not going to pay for that product.
Once we figured that out, we realized we needed to pivot. We were lucky we didn’t have a product yet. We were still working on the wire frame, so any changes didn’t really matter. It was just hard to face the relative disappointment with our mentors.
IDH: Can you tell us about that?
KK: There’s a distinct moment in time I remember with the Yale Entrepreneurial Institute specifically where we made a huge pivot. The quality metric product we had pitched earlier was going to be like TurboTax, where all you do is enter in your quality metrics, all the doctors have it in one place, and they can all assess each other’s information. It was a really cool idea, but no one was going to buy it because they didn’t care about those specific quality metrics.
When I explained the pivot to the Yale Entrepreneurial Institute, they didn’t get it at first because they were focused on the previous idea. I tried to explain: This is not just some random pivot. This is coming from customer feedback—they flat out said they wouldn’t buy this product.
So that took a little bit of convincing. But, every time we were questioned or someone had a concern about our product, it forced us to ask ourselves and then justify it one way or the other—is this right or is this not right?
It’s been good, but all of those pivots and all of those conversations with customers are how we got to where we are today. Everything we’ve done from our business plan to our platform was strategically built on more than 10 months of customer research.
IDH: Aside from those pivots, what would you say that was the startup’s biggest challenge?
KK: For healthcare specifically, finding the customers to speak to was the biggest challenge.
We needed to speak to healthcare providers, and even being at a hospital it was really hard to find providers to talk to. I also didn’t want to talk to the providers at Yale New Haven Health, because there might have been a conflict of interest.
I relied more heavily on my network. I reached out to the second- and third-degree connections on LinkedIn. Because it’s not a consumer product, it’s really hard to find your customer base to test the idea. I couldn’t just stand outside Starbucks and ask: What do you think about quality metrics? So that was a huge challenge.
IDH: What makes your product unique? Why does someone need your solution?
KK: We’re taking it from the perspective of financial savings for healthcare.
Zack and I wanted to connect all the electronic health records in the world. We wanted to create one massive platform where everyone could talk and communicate—very similar to health information exchanges. But then we figured out why they weren’t working.
The reason why is because, healthcare is a business that looks at products and platforms the exact same way as any other business. If a product has no return on investment and they can’t justify the cost, they won’t purchase it.
So there’s an issue with what we call “interoperability,” which is the inability for electronic medical records to communicate. Interoperability is a business issue, it’s not a technology issue.
The business issue is that a small physician practice may not want to connect their information with a large hospital because there is a fear of a loss of sale since a hospital can take the patients from the smaller practice. That was what we discovered in our interviews—there needs to be a business reason to share clinical information in a usable format and not a fax.
What we are seeing in healthcare right now is a shift from volume to value. Volume is where providers get paid for every single thing they do from an X-ray to an MRI. What we’re switching into is value-based care, where providers are reimbursed based on the value, or quality outcomes, of their care. An example is a bundle program where one provider, say a hospital, is clinically and financially responsible for the care of the patient for a certain period of time, 30 days to 6 months, after discharge regardless of what happens to the patient.
However, patients move around. So, for example, after a joint replacement, the patient sees many post-acute care providers in a different clinical network, so the surgical hospital needs to communicate with the other providers—now there’s an actual business reason why they need to share information and work together.
So why do they need our platform? Because the electronic health record is inefficient for this new focus. And because their reimbursement is now tied to their effectiveness of coordinating that care. We’re starting small. Right now, we’re focusing only on orthopedics and spine. The clinical programs will continue to expand. For example, cardiac programs begin this summer.
IDH: Who are your competitors?
KK: We have a few competitors in the region. We are not first to market, which we’re actually excited about because that means that we can improve upon what’s already there.
IDH: And that means there’s a need for your product.
KK: Yes. What we’ve done to identify and address our competitors is to reach out to strategic advisors or people who have worked at those companies before.
There’s a healthcare advisory company called Sg2 that assesses the market for healthcare tools. I had a conversation with a representative in early 2017 to identify other players in the market. We identified what they do and what we do. The representative justified the fact that SimplyVital Health has a very special differentiation that the others don’t, which is excellent.
IDH: Any advice for other people who are launching startups?
KK: Focus on easy wins and use those to get to your larger goals. Celebrate those small steps, because there are so many ups and downs.
IDH: Let’s talk about your experience with the Healthcare Hackathon.
KK: In October 2016, SimplyVital Health participated in and won the Blockchain in Healthcare Hackathon in Nashville, TN. which is actually the basis of our platform. That was the pivotal moment for our company. We have moved so fast from that day because we were able to complete our team and get justification for what we were doing. It was huge. It was really exciting.
Opportunities like that—offering entrepreneurs a chance to get out there—can be incredibly transformational. We are appreciative of that.
IDH: You recently got accepted to the Boost VC accelerator in Silicon Valley.
KK: Yes. We’re thrilled! It is the #1 accelerator for block-chain technology and had a 4% acceptance rate. We’ll be there full time through May, so we’ll still have a Hartford connection when we return. But we are really excited to have a different perspective.