_Outcomes Rocket Podcast_Michael Dillhyon.mp3: Audio automatically transcribed by Sonix

_Outcomes Rocket Podcast_Michael Dillhyon.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Saul Marquez:
Hey everybody, Saul Marquez here with the Outcomes Rocket, welcome back to the podcast. Today, I have the extraordinary Michael Dillhyon on the podcast. He is an entrepreneur and health tech strategy nerd. From Zurich to San Jose, open health data to EKG wearables, Michael has been a pioneer in the digital health revolution from its onset. His health care dream is for patients to become better consumers and drive improved outcomes. I’m excited to have him here on the podcast today. He’s got so many unique perspectives to share and explore around health care, consumerism and digital health. So, Michael, thank you so much for joining us.

Michael Dillhyon:
hey Saul! Thanks for inviting me on the program.

Saul Marquez:
Absolutely. So you have such a rich history of innovation. You’ve led organizations. You’re an entrepreneur. You always do things differently and not just to be different, but different to add value. What is it that has inspired your work in this space?

Michael Dillhyon:
Right. So that’s a fabulous question. But I love that it’s not a softball question because it is a tough question for me to answer. And it’s probably it’s a little orthogonal from the standard health care do-gooder sound bite. My inspiration, and it’s grown, but it’s really pretty, pretty well settled into consumer spending. I think up until recently, I’d say generously, that’s five to seven years ago. I started out in this space almost 12 years ago in the digital health space. But up until recently, the US health care was kind of one of those, it was a disco era, plaid sports jacket, nineteen eighties business ecosystem. You had the retail end of health care, which is the providers still mostly bricks and mortar, even now with a lot of great telehealth traction that happened in the past 18 months. But bricks and mortar entities with very low margins. And then the other end of the middle part of the ecosystem, if you will, was manufacturers. That’s the wonderful products of the world, the strikers and the Zimmers and all of the biotech companies now and in the future. And the thing about this is they were classic manufacturers, remain classic manufacturers, enormous R&D costs, and pretty ridiculous marketing. And I think one of the funny things to me is watching somebody I lived in Switzerland for 15 years or so, watching someone from Switzerland come to the United States and watch one of two types of television commercials. One is the personal injury lawyer commercial. They’re fascinated by that. And the other one is US-specific, direct-to-consumer pharma marketing.

Michael Dillhyon:
What is this about, Michael? Just wait. You’ll see that there’s something coming out for the person running through the field. It’s something for IBD. And then the other the final piece of the ecosystem that I think is really ripe for change as we move into this consumer-based system is the finance sector. And in health care parlance, that’s the payers, right? You know, and traditional finance, 1980s finance sector. There’s not a lot of pricing transparency. And I think I’m being generous there and it’s pretty generally distrusted by the consumers. So I think it’ll sound a little broad because I’m interested in a lot of pieces that help shape those three areas that I just went over, which is the manufacturing, the payers’ space, and then the retail end of things. But I think what we’ve seen over the last 10 years is where health care needs to go, right? I mean, you’ve got focused consumer education with commiserates spending, massive amounts of spending, and it’s transformed all these core business areas, commerce with Amazon, automobiles with Tesla, entertainment with Netflix, finance block chain and so on and so forth. So, you know, I guess in closing, it’s a long-winded answer to a great question. I think that other than the prison system, maybe health care is an oddity and that consumers are not the buyers. And even when they are the buyers, there’s a massive built-in switching cost to be put in that space. So I get inspired by scalable ways to leverage the power of both the data and the pent-up consumer demand to change health care.

Saul Marquez:
Yeah, I love it and I love your passion for it, Michael. I mean, you are certainly a student of the industry as much as.

Michael Dillhyon:
I’m learning, learning.

Saul Marquez:
Always right. And you act on your learnings and. Therefore, you learn even more each time. Talk to us a little bit about how you and really the work that you do and I say work because you wear a lot of hats, so feel free to take this and whatever angle you want to take it. How are you adding value to the health care ecosystem with the work that you do?

Michael Dillhyon:
You’re a smart guy, right? Let’s just give Michael the floor, but you’re also brave. So I do. I find myself, for better or worse, simultaneously addressing multiple points on the health care value creation stack. And, you know, and it’s kind of spanned everything, as you said, from devices, EKG patches, injectables to data. I’ve been back and forth across that gamut fairly extensively. But I think that consistent theme for me in that why and where is the business adding value to this, to the health care ecosystem is again, this what’s becoming less and less and less of a blurry line around the consumer sentiment? One of my projects, if you will, I don’t know if it’s really a startup, but project sounds a lot more academic than I’ve been working on for the last few years with a couple of other cranky health tech pals is we really decided rather than come up with another piece of tech, let’s focus on something where there’s already an existing patient demand that’s not being met. And, you know, this is I guess, just an example, I suppose. But breast cancer-related lymphoedema, it’s not exactly what you’d call a health care headline or disease. Breast cancer, obviously, for all the right reasons, receives a lot of marketing attention. But for folks that have been diagnosed with this terrible acute illness, there are also other things that may be in store for them. And one of them is lymphoedema. There was a Mayo Clinic study back in 2013 that as breast cancer survivors were about points in the care continuum, that really there were high anxiety.

Michael Dillhyon:
And there are obvious ones that are completely sensible around the surgery itself, the follow-up treatment. But what came out of this was lymphedema. Seventy-five percent of the survivors of that high anxiety over this possible diagnosis. And why? I mean, we’ve got all this great technology, what you’re facing this terrible acute illness. What’s what is it about once a demon that brings such anxiety, the insult to injury piece to this? And it was because clinicians had didn’t have good answers. They still don’t have good answers. The patient said in the pre-surgical console, what can I do to ward the swath? And the answer is an answer they’ve been giving for a long time. It involves a tape measure and in the best case, it involves something called a pitting test where you press on the skin. And so we thought we were looking at some technology to measure noninvasively fluid variation. And we thought, let’s not just sort of drive this value broadly, but let’s look for very specific areas where there is patient demand. So we came up with something. The company is Spectral Flow, the name of our first product if you will. It’s called the Orb. And we don’t have a video, but it’s a small handheld device and it allows patients at home to look for or really sign screening for lymphedema. And obviously, we want to take it much farther up the value chain. But again, what is it that patients want? And we did a survey last year and we asked the crazy question of would you pay for this out of pocket? And 60 percent of the patients we surveyed out of one hundred and fifty lymphedema patients said they would pay for it out of pocket like mind-blowing.

Michael Dillhyon:
And then add to that roughly a third of the participants were from the UK where it’s a single-payer system. So I think that’s one of the areas I hope to be able to essentially put my money and my time and my efforts where my concerns are, which is the patient piece of this. Another completely separate side of it is on the value creation side is that that sector around manufacturing, biotech and medtech and the enormous cost around R&D. I’m very fortunate to be involved with the company in Cambridge Elemental Machines that is building a fabulous platform around, and it’s a new word. you know, everybody loves a buzzword, but it’s around labs and they’re building a platform that they’ve got two hundred plus customers, biotech customers on a short period of time. But really what’s interesting, and it’s a friend of mine is the founder, just an amazing person. But it’s really not just about collecting the data that’s happening in the lab. It’s then taking that data and allowing researchers to fit that into their workflows and really determine how they can optimize your Web ops. Again, is that pent-up customer demand? No, but it points back to something within the ecosystem that is preventing us from moving into more consumer-focused outcomes.

Saul Marquez:
Yeah, well said. And around lymphoedema, you know, no cure. How did you pick that?

Michael Dillhyon:
OK, so I used to tell the story and one of my co-founders told me, like, you have to stop saying the story. So Saul this is your exclusive here.

Saul Marquez:
Let’s hear it.

Michael Dillhyon:
I was in Scotland on a Scotch trip, of course, drinking responsibly, but just enjoying some of the nicest scotches. And I was with a few friends of mine who were clinicians, and one of them was this gentleman, Dr. Bengesh. So that’s we’re very fortunate that part of our team at Spectral Flow, was a breast cancer surgeon. And I talked to them about this technology and say, I think we’ve got a really novel technology for measuring extravascular fluid. But mind you, the places where we want to get involved are very complicated disease phases, CHF, COPD, urology. I mean, it’s hard to build data, reliable data sets in that space and it’s hard to understand where the going in is at. And he’s the one we’ve had a couple of glasses of Scotch and all retired for the evening and came up, knocked on my door. And he goes, Man, I know what exactly what you need to do with this thing. There’s this disease called lymphedema that my patients ask me about. And I’ve been a breast cancer surgeon for twenty-five years. And he said I feel completely helpless because I don’t have a solid answer. That’s how we got started. So for all those people that are thinking about starting a medical device company and wonder how you find the right space, there’s one version.

Saul Marquez:
Fascinating. Thanks for the story. Yeah. You know, it’s you got to be open-minded and you’ve got to be open to the opportunities when they show up. So my understanding is lymphedema is one of those things that kind of happens for various reasons. It’s either congenital or it kind of happens as a result of cancer treatments. Like maybe this guy was doing some chemotherapy that damages lymph nodes and you get lymphedema.

Michael Dillhyon:
Yeah. It’s interesting because the human body and obviously not a clinician. So I’m going to speak as a first-person owner of the human body. It’s so resilient. And in the course of an oncological procedure, you’ve got potential surgery, you’ve got chemotherapy and then radiation. And it’s not always, this is the insidious thing about it. And it really there is some parallels here to some other bits. It’s the diseases that you’re not sure how you get them and when you get them that are the most scary. And that’s lymphedema. It doesn’t affect everybody. But when it affects you, usually by the time that at this point you’re able to determine that you have lymphedema, the vascular tissue has been damaged to the point that you might end up having to have therapy for the rest of your life. And therapy can be exercise but it also can be a very telling compression garment that you must wear all the time. And that’s maybe the best-case scenario because, in the more advanced stages, there’s a pneumatic device that patients need to wear. And so it can result in a poor quality of life, particularly if you’re also battling another illness.

Saul Marquez:
Totally. And that’s for sure. I appreciate your insights there. And so as you approach different technologies and different businesses, Michael, how would you say what you do is different or better than what’s available today?

Michael Dillhyon:
Yeah, I mean, for me, the important thing about all of this wonderful technology that we’ve I think that I saw something of the day how high tech those rockhill when it started way back in the day, everybody got excited when a billion dollars in total funding went towards the space digital health back then. Now it’s kind of segmented into other things. But I now know there’s a billion dollars in funding and I think the last two weeks of March. So lots and lots of money going into this. And the important thing for me is the money, of course, goes towards technology of some kind of the products service. It’s an approach, but the big differentiator needs to be it has to move the needle. And this is a tough needle to move. It has to move the needle in terms of how the patients, how people that receive these technologies, their quality of life, how are we improving the outcomes? This is a big theme of your show is what are we really doing? Is it sometimes I wonder I’m old enough to remember life before an iPhone and I it’s anecdotal, but I’m wondering, is the is the iPhone making my truly making my life more efficient? And then on top of that, is it making it better? So I think that’s what really needs to be.

Michael Dillhyon:
It sounds a little white, like I’m whitewashing the whole thing, but it does have to have some key indicator in people’s lives. It does have to have this measure of of use that people feel passionate about. You and I were talking before, and, you know, it’s unusual to hear somebody’s passionate about their spinal implant. It’s a visual to hear people passionate about their glucose monitoring device. I’m just I could come up with dozens of them, but people get super passionate about using their iPhone. So I think that’s where it really needs to move forward. And for me, that’s why things like spectrum flow and elemental and other companies I’m working with is, you know, really the technology is there and it’s important. And it’s it’s a key bit of why this thing does what it does. But if it doesn’t make a difference, at the end of the day, when a person picks this up, a researcher, be the patient, whatever it might be, and they don’t finish their day and think, well, my day is better because of that, then you missed the boat. Totally.

Saul Marquez:
Yeah. And that’s a great perspective, because as we look to make a better impact on whether it be an approach or or a technology, it’s important that we take the consumer’s perspective into account. I mean, for a long time we have not. And we go through this again and again. But the reality is the consumers become so important right now. If you’re not thinking about what the consumer wants and how to focus on that, you’re you’re totally missing the boat. And to Michael’s point, it’s important to keep that in mind. What type of, I don’t know, frameworks or how do you typically look at it, Michael? Like, I’m curious what the questions you ask are around these things as it relates to the consumer experience.

Michael Dillhyon:
Well, I’m going to say something that’s going to sound so obvious, and I hope it doesn’t sound pedantic.

Saul Marquez:
We’re learning here. We’re all open-minded.

Michael Dillhyon:
We go out and ask patients, we go out as consumers. I review startup proposals back before COVID. I did accelerator’s pitches, all those sorts of things. And I’m constantly amazed by the people that are generating these fabulous ideas around things, products, and services that can improve health care. But I want to know, have you talked to a patient? How many have you talked to? Now, this isn’t this is a clinical trials, right? It’s just to go out and ask patients, be upfront. Ask the tough. Would you buy this? Not necessarily. You have to, but what you’re buying. I think that’s a key sentiment indicator. Right. Ask clinicians, I was part of a one hundred thousand dollar marketing study. And one of the big takeaways was we asked clinicians and patients whether they would use a piece of technology that would, on the surface make both of their lives better. And all of the respondents in this study, it was it was an onsite study said, yeah, absolutely. We think this is a great idea. Then we ask him, would you buy it? And they all said no or looked at us, looked at the interviewers like they were crazy. So there’s this gets to that third pillar of the finance, nineteen eighties, fine finance structure around payers and so on and so forth. But I think my framework is ask the patients, ask the clinicians, ask the health care providers. In our case, a lot of what we think this device will be used as health care workers, nurses, occupational therapists, we go out and ask them first. Yes, of course. Validate the technology. Yes, of course, you don’t miss all the quality fun, but that needs to come first. And I don’t see it happening all the time.

Saul Marquez:
Yeah, you know, if you asked that question and you get no, then it’s definitely an opportunity for you to think about the approach and maybe the follow-up if the answer’s no, would be would it need to do or what is it what would it need to be for you to buy it. Yeah. And Michael, the other thing that comes to mind, too, is this thought that maybe people don’t know that they would buy it. Like, for instance, if you were to have asked Steve Jobs about the iPhone. Yeah. How do you deal with that? Yeah.

Michael Dillhyon:
So I think one of the things that I and you asked me about frameworks earlier is leaning really heavily on the fast-moving consumer goods approach and honest to gosh, you know, branding approach to things and building profiles things along those lines. So when you ask people and I’m an advisor for a company that does behavioral profiles, that is eventually one day you’re going to move into, I’m sure, mental health. But right now is focused on the marketing space, but, yeah, if you ask people, do you think you’d want a non-invasive device for monitoring early stage one for lymphedema number one, the only people that are going to really give you any sort of accurate response are the folks that have been through the process or know somebody that has been to the process. That’s not the best. It’s not the prime data set when I think it would be great is for more mental health tech companies. And I believe I mean, I’m not talking in a vacuum. I mean, this is happening, right? I mean, very smart people think about this. But just for the whole this is where we’re going is to say it’s great that we’ll talk about the disease, but let’s talk about where you want to be, where you always want to be in your life. It’s how they sell vitamins and supplements. Nobody says, oh, let me tell you about how we make vitamin D and what it does from a physiological perspective to your body. If somebody says it’s just like sunshine and, you know, and I’m not suggesting have devices like supplements, but they know they’re keying in on why people want to do what they do. And it’s been like a verboten area of health care since day one, because it’s been based on science. But I can tell you, I worked with a lot of marketing people and they’re very numbers driven and they’re very quantitative. And I would love to see that sort of fast-moving consumer good approach taken to evolving technologies and health care.

Saul Marquez:
Yeah, man, that’s so great. Michael, thank you for that. So I’ve had a lot of different people on the podcast. One of them in particular, Kathleen Elmore. She’s head of this company called Engages. But she was a VP of marketing for Procter and Gamble and a lot of consumer companies. And she is now helping payers and providers in the space help patients take the right actions for their health. And to your point, yeah, you look at this stuff and you’re like, what is buying Cheerios have to do with the science of my medical device? The reality is it’s what works, right? I mean, it’s these consumer strategies that help people take action for their own health. And you’re right, I never thought about it that way. You know, it’s like, yeah, this is a non-science, so why should we employ it?

Michael Dillhyon:
Right. There are a lot of smart people thinking about this. I mean, folks like Christine Lemcke over –. And it’s a rapidly growing mindset. But obviously, I think as we move forward, the closer we get to getting patients excited about what we’re up to, the better chance we have of what everybody wants to do. We want to revolutionize the health care system. Well, you know, if you want to start a revolution, you know, not to start quoting of famous singers, but you need to get a lot of people involved.

Saul Marquez:
Yeah. Yeah, totally. Totally. And this is how it starts. Conversations like these. What would you say Michael’s been one of your biggest setbacks that you’ve experienced and what was the key learning that came out of that?

Michael Dillhyon:
Yeah, I don’t think you have time on this or does another podcast listen to me whine about my setbacks. But I had a lot of learnings when I first got involved in my first I’ll say and I put my toe in the water as a serial tech entrepreneur in bioinformatics in 2009. And one of my big setbacks early on, and it still is one that I have to remind myself of, is there are a lot of incumbents in this space and they employ a lot of people and they do good things. And you need to learn you being made that it needs to work for everybody. It needs to work for all entities to move this forward. Yes, there’s displacement. Yes, there are disruptors. Yes. I mean, everything you can every health tech accelerator on the planet wants to use this is their buzzwords. But really, the setback for me was not spending more time with the incumbents. Once I moved into the frame of mind and said, I need to understand. I mean, got to understand, I understood the enterprise tech world or for some reason I thought the enterprise health tech world was somehow different and it’s not.

Michael Dillhyon:
So once I really set my mind to say, OK, what was the details with the folks and the entities that have huge footprints globally and that covers the whole shooting match the large insurance companies, the large health care providers, and the large health tech manufacturers that help me be a better entrepreneur? It helped me be a better strategy person. And I think, again, along with the idea of asking patients in a thoughtful, process driven way about where the demand is, understanding strategic partners and how we’re providing value to them. And I don’t mean just exits. I mean getting into the market space, because sometimes there are really great complimentary opportunities, but it was funny, I didn’t take a lesson I learned in the enterprise tech space. It took me a couple of go-arounds, but it was I finally figured out that it really doesn’t matter if it’s how many billions of dollars of revenue that a company does. If you don’t have the sales team on board for what you’re up to, you’re going to be stuck in innovation hell forever. And that’s that was both a setback and big learning for me.

Saul Marquez:
So on that front, the sales team for the type of business you’re building, tell me a little bit more about that. So are you saying your revenue today doesn’t matter? You need the sales machine and the salespeople to build the company you’re trying to build? Or tell me what more specifically what you mean by that?

Michael Dillhyon:
Yeah, what I mean by that is, and I’ll be very specific, building a med device startup, something that’s got hardware and software. And it’s a heavy lift for all the reasons that you’re keenly aware of. And I imagine your listeners are. But the regulatory piece, the HER piece, the patient piece of it, but then getting into the channels in order to properly the market access piece of this, what I’m getting at is I think that companies really need to focus on how are we going to provide value to this huge enterprise player? And it probably isn’t going to be through incremental revenue. It’s going to be because you’re differentiating that enterprise player in a way that’s helping them pull through significant revenue share. And that happens when you do a large deal together. And people in the sales team say, aha, I see that that that was successful and you copy yourself from there going. And I reserve the right to be completely wrong about this. And in other areas where the incumbents do not have a large footprint. And when I’m saying that I mean more of the behavioral patient side of the house, but where there are large footprints and large opportunities of clinicians and in established relationships, that’s where I think that’s the revenue driver early on. You have to go out, you sell together, you learn how I help. What I do changes what you do, the enterprise player. And that is usually a recipe for success. Yeah.

Saul Marquez:
Thanks for clarifying, Michael. And totally I mean, in a lot of these larger strategics have a very difficult time doing the innovation work. So if you could find a way to play and influence the lanes that there they have a big footprint in your, you’re putting together a business plan that’s going to work in your favor for sure. You know, you work on a lot of cool things, Michael, but out of all of them that you’re working on or any particular topics that you’re giving thought to, what are you most excited about today?

Michael Dillhyon:
So I’m generally excited that and I’ve said this before, but it really is exciting for me. It’s generally exciting for me to see that the regulatory hurdles are lowering, that they appear to be lowering. And what I mean by that is specifically around the FDA and the breakthrough programs and we’ll see where it goes. But it’s very promising to hear that as an entrepreneur in the space and an investor in the space and a strategy person, that’s great. It’s great to see the reimbursement side softening up a bit. But I think what I’m most excited about is that we haven’t really touched much in this call, but I’m excited about seeing the innovation on the finance side. So we talked about the retail side of the house and how we can do remote patient monitoring. We talked about the manufacturing side of the house where we can optimize R&D and dramatically reduce the cost of R&D through optimizing the operations piece. But really what we asked me, what am I most excited about today? Because it’s the finance into this thing. I’m excited to see these new payor models where transparency seems to be the default rather than the exception of large payers. You know, Bruce Brassard over at Humana teaming up with Imitrex Petina and talking about how I certainly know how to underline a word, but it’s consumer-focused that we get to the point where the finance end of this ecosystem start softening up and becoming more consumer-focused. Everything else is going to really start to fall in line for us.

Saul Marquez:
Yeah, well said, Michael. It is definitely the place we need to be thinking about in health care. And so as we wrap today, up can tell you this has been fun. I really, really enjoyed our discussion. Tell us what you think people should be thinking about. And if they want to get in touch with you and connect with you, what’s the best place and way for them to do it? Sure.

Michael Dillhyon:
You know, I don’t know. What should we be thinking about? I think people should be considering at least the idea that consumer education is paramount. We need to take off the jargon gloves and begin talking to consumers in a way that again mirrors how other industries talk to their consumers, health care needs to be more friendly in that way. I’m not suggesting that health care is complicated. Human body is terribly complicated. So they’re going to be some things where it’s still a six-syllable word and that’s just the way it’s described. But we need to work onc, ontinue to work towards that. And if you want to get in touch with me, my email address, my first name, Michael@spectro.flow. All one word.

Saul Marquez:
Outstanding. Michael. Well, listen, just great to connect with you and really appreciate you sharing these insights on what we should be thinking about around consumer health and just consumerism in general. I do believe it’s the future. I do appreciate the work that you do and everything you’ve shared today. So I really appreciate you.

Michael Dillhyon:
Yeah, thanks Saul. And I mean, great podcast, great set of questions. And, you know, I have to say not to be too gratuitous here, but it certainly helps that you’re in the middle of it. You work for one of these companies that I was referring to. You understand it. This goes a long way towards the education that consumers really sharp industry folks like yourself Saul, you are willing to take the time and the effort to build a solid broadcast of what’s out there. So thanks. I appreciate you doing this.

Saul Marquez:
Yeah. And thank you so much for saying that, Michael. Really, really appreciate that.

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