Doctors and techies are clashing at digital health companies, and one start-up exec is seeking a fix

Key Points
  • Digital health companies are struggling in part because the clinical teams and the product teams are at odds.
  • Omada Health's chief medical officer is working on solutions to bridge the gap.
  • Start-ups in the industry raised $8 billion last year, and exits are just starting to produce returns.
Omada Health's product and clinical heads discussing ideas.
Omada Health

When Carolyn Jasik recruits doctors to work at Omada Health, where she's the chief medical officer, she has product developers vet the top candidates to make sure they're the right fit.

Jasik, a trained physician, has seen numerous well-funded companies in digital health struggle, in part because the technologists and medical experts too often sit on opposites sides of the house, make discrete decisions and rarely communicate. At Omada, which develops digital programs for people with chronic ailments and sells them to insurers, health systems and large employers, Jasik goes out of her way to bridge the gap.

Clinicians who join are given an onboarding document with a list of 10 tips for working with product teams, including "insist on outcomes" for patients, "get alignment" so there aren't conflicting medical perspectives in meetings and "ask lots of questions." The company just embedded a clinical expert on the research and development team, called "disco," and a medical representative attends every product meeting.

Jasik said she's never hired anyone who gotten a single "no" from the product side.

"As clinicians, we go through a ton of training to be able to make decisions," Jasik said, in a recent interview at Omada's San Francisco office. "But in industry, it's different. It's a partnership. You don't get to just make the call. And that's a big culture shock for a lot of us."

Jasik doesn't have a precise template for success, but she knows a lot is riding on her industry's progress. Digital health companies pulled in more than $8 billion in venture capital in 2018 to bring new technology to the health-care industry. They're just starting to see some market validation, with Livongo Health, an Omada competitor, going public and PillPack and Flatiron Health selling for healthy sums.

In recent years, the missteps have gotten more publicity. Even beyond the notorious collapse of Theranos, former medical hires have spoken out about problematic behavior at companies like Nurx, which sells birth control, and uBiome, which offered health tests before suspending operations and then closing down this year. Doctors working with men's health companies like Hims have raised concerns that they didn't have enough of a voice.

Theranos founder Elizabeth Holmes arrives for a pre-trial hearing
Theranos founder Elizabeth Holmes arrives for a pre-trial hearing

It's not just a problem at start-ups. Apple is facing internal strife and has lost talent in its health efforts as it attempts to move deeper into the $3.5 trillion medical industry.

"So many companies are quietly struggling with how to match these two cultures in their workplace," said Ruby Gadelrab, a marketing executive who previously worked at 23andMe and co-founded a health-tech consulting firm this year.

Gadelrab says that Silicon Valley entrepreneurs and engineers are used to the hustle of high-growth start-ups, which is completely at odds with the deliberate approach preferred by doctors, who go through a decade or more of rigorous education and take the oath, "first, do no harm." As Nurx's medical director, Jessica Knox, told the New York Times, start-ups have a "mentality of 'don't ask for permission — ask for forgiveness later.'"

CNBC spoke with more than a dozen current and former employees from companies, ranging from large tech firms to early-stage digital health start-ups, about the complications they've witnessed and experienced when techies and clinicians collide. Most of the interviewees asked for anonymity due to nondisclosure agreements or because they weren't authorized to speak on behalf of their companies.

While their stories vary, it's clear that Omada is the exception to the rule, and much of the industry has a lot of catching up to do.

The medical perspective

One San Francisco-based physician recalled the excitement he felt when he first showed up to work in 2018 at a diagnostic testing start-up. The company seemed to be growing quickly and was backed by tens of millions of dollars in venture capital.

But during his first month on the job, he saw behavior that would surely raise questions if regulators were aware of it. The company used doctors from a staffing agency to prescribe tests to patients. Those doctors appeared to be liberally issuing prescriptions, without doing thorough reviews, out of concern that the agency would lose its contract with the company if it was perceived to be limiting business.

After bringing up the issue with management, the "CEO flipped out," the physician said, and accused him of not being a team player. He was subsequently put on a performance improvement plan.

"I stayed away from the regulatory issues after that," and then left the company a year later, the physician said.

At another digital health company, a behavioral scientist had been trying for months to inform leadership that an app nudging users to take medications wouldn't work for a large group of people, including those with mental health issues. Despite having research to back up her claims, she said that company executives were dismissive of her warnings.

"I feel like I'm the least popular person at my company because I'm perceived as trying to slow people down with my science," she said. "It's really an uphill battle."

Sherry Pagoto, a behavioral scientist who has previously consulted with digital health companies like Fitbit, said she's heard this sort of feedback from others in her field. One particular challenge, she said, is that there's been a wave of books from non-medical authors that delve into pop science and dietary strategies.

"People in the tech world will read one of these books, or they'll hear a story about someone losing weight or eating better, and think they are an expert," said Pagoto, a professor at the University of Connecticut.

Jill Hagenkord, another doctor who's worked in the health-tech industry, said she hears anecdotes like this all the time. Hagenkord co-founded consulting firm MDisrupt with Gadelrab earlier this year to help companies avoid Theranos-like mistakes.

"I've yet to talk to a happy health-care person in digital health since I started having these conversations," she said. "After we talk, I think it's a relief to realize that it's not just them."

'Token hire'

A common sentiment that Hagenkord said she hears from doctors and other medical experts is that they feel like a "token hire," and frequently are brought in far too late rather than when companies are developing their products. They get trotted out to meet customers and put on stage at conferences to talk about the company's commitment to clinical evidence, but internally they see chaos and mismanagement.

The problems cut both ways.

Doctors often join tech companies after working at hospital systems that can be very hierarchical, a sharp contrast to Silicon Valley, where work environments are more open and projects tend to be consensus-driven. In interviews with technical employees at health-tech companies, CNBC learned of several instances where medical personnel were given high-level positions on the backs of their credentials but without a sense of how to work in a collaborative system.

"I've worked with many 'key opinion leader' type doctors over the years," said one person who's worked in product development at several digital health companies. "They have strong opinions, which are often totally black and white, and they are used to people just listening."

Stephanie Tilenius, a former executive at Google and eBay who's now CEO of digital health company Vida Health, says that medical experts and technologists have to learn how to coalesce around a common language.

She acknowledges that she's gotten negative feedback from clinicians for emphasizing the importance of "obsessively delighting" customers, which is familiar vernacular in Silicon Valley but can be off-putting in medical scenarios.

Livongo executive chairman Glen Tullman on the company's IPO
Livongo executive chairman Glen Tullman on the company's IPO

Jasik said she's found the most hiring success targeting doctors from so-called safety net hospitals, which treat everyone regardless of insurance status and often have to learn how to get by on limited resources.

Still, she's had to undo some of the medical training of her clinicians. For example, one of her employees put together a 25-page report on behavioral science, summing up academic research, for other teams to review. Jasik pushed her to pare it down to the most important points so it could be accessible to everyone. The result was a very useful five pages, Jasik said.

Another way Jasik has brought her teams together is by promoting what she calls minimally clinical viable product. It's a derivative of the software concept, minimum viable product, which generally refers to getting out a product with just enough features so customers will use it and provide feedback. Jasik said that by adding the clinical element to it, the idea is to create the simplest version of a tool or feature that's acceptable by the standards of her doctors, while pushing them to try new things.

To keep a close eye on what's happening with the product developers and make sure everyone is on the same page, Jasik said she walks almost every day from the train station to the office with Mike Tadlock, the company's senior vice president of product. That's when they discuss any brewing issues and look for ways to compromise.

At Vida Health, Tilenius is now working to solve communication gaps using a "cultural cabinet" Slack channel, where employees discuss the type of language that makes sense for both the medical and technical staff. On a personal level, she's stopped using the term "obsessive" and switched to "persistence," which resonates more positively.

"This is something that so many digital medicine companies will face," she said.

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