Why Physicians Are Turning to Startups

To appreciate the potential impact of the startup movement on health and medicine, you really need look no further than Drs. Rushika Fernandopulle and Farzad Mostashari (disclosure: I was colleagues with both at college and later at MGH).

Both are passionate about transforming healthcare – Fernandopulle has an M.D. and a public policy degree from Harvard, and was the first executive director of the Harvard Interfaculty Program for Health Systems Improvement; Mostashari served as Assistant Commissioner for NYC’s Department of Health, and more recently as the National Coordinator for Health Information Technology in the U.S. Department of Health and Human Services in the Obama administration.  Both are committed to improving the delivery of patient care.  And both have deliberately chosen to pursue their vision by creating a company as the vehicle to deliver the change they each believe in.

“The world of start-ups may not be the usual path for those leaving a senior federal post,” Mostashari wrote about his new direction, “but it’s the right decision.”

Last month, Mostashari founded Aledade, which seeks to enable independent, primary care physicians to establish accountable care organizations. A few years earlier, in 2010, Fernandopulle co-founded Iora Health, an innovative model of direct primary care, and continues to serve as CEO.

Explains Fernandopulle:

“As a practicing physician it soon became obvious our current model of care delivery does not work; instead of simply complaining about it I felt I needed to try to fix it, but got frustrated trying to do it within existing health systems, and found studying the problem (in academics), working through the government, and consulting was not effective. I decided that the best way to make change happen quickly was to simply strike out myself and just do it- being an entrepreneur allows you to break what others think are the rules (they aren’t) and take change into your own hands.”

And Fernandopulle and Mostashari aren’t alone – across the country (and the world), physicians from every specialty are creating, joining, or hoping to join startups.  While many of these doctors are fairly junior, and have little (if any) substantive clinical experience, some are more seasoned – HealthLoop’s Jordan Shlain comes to mind, for example.

While the motivation is probably slightly different for each physician-entrepreneur, I suspect that the common theme is a deep-seated passion for explosive, tangible real-world impact – and the optimism and conviction to believe you can achieve this. Let’s break that down:

Passion: Participation in the startup industry is an expression of a heartfelt conviction – it’s not a job, a way of getting paid, but rather a form of self-actualization.  This is the John MacKay, Richard Branson, Howard Kurtz, and Mark Zuckerberg view of the world – not that of Valeant’s Michael Pearson and the “Outsider,” or the view that the spock-like CEO William Thorndike lionizes, nor is in the middle manager phenotype that Monster.com famously mocked. (Then again, Scott Adams, of Dilbert fame, has argued it’s misguided to follow your passion, suggesting you tend love what you’re successful at, not successful at what you love.)

Explosive: “Startup” is used here explicitly in the Paul Graham, Startup=Growth sense – generally VC backed, formed with expectation and intention of hitting a phase of exponentially accelerating growth.  Most new companies (think local dry cleaners and restaurants) aren’t startups, in this sense (though occasionally they hit it big; the EMR giant Epic, for instance, grew gradually and famously never took a penny of VC funding). In contrast, companies started by doctors like Fernandopulle and Mostashari are supported by A-list VCs (like Polaris, Fidelity Biosciences [disclosure: I spent some time with this firm about eight years ago] and Venrock) precisely because of the aspiration for explosive growth.

Tangible, real-world: The goal of Aledade and Iora Health isn’t to come up with a brilliant idea validated by publication in a top-tier scientific journal or think tank white-paper, but rather to tether a promising idea to successful implementation, as demonstrated by adoption in the market.  Startups – as I argued in 2005 – represent, in a sense, the purest distillation of the translational research ideal.

Impact: Perhaps no aspect of startup culture has been more lampooned than the idea that you’re trying to dent the universe, disrupt, revolutionize, and make the world a better place. Turns out: it’s true – most entrepreneurs truly are striving for outsized impact.  Similarly, many physicians were drawn to medicine because they saw in it an opportunity to make a difference; startups, it would seem, represent a natural vehicle for this ambition.

Optimism and conviction: These qualities – which I might summarize as “startup=applied hope” — represent my favorite aspect of silicon valley, and arguably capture its most distinctive, compelling, and essential features. There’s a pervasive sense of possibility out here, a belief that a smart, motivated group of people can, must and will change the world. While such fervent, almost religious optimism can be both excessive and dangerous (see here and here), in moderation it can also be enormously attractive – and for many physicians, ego-syntonic.

With so much going for startups – not to mention the ever-increasing number of digital health accelerators, incubators, and translational centers that now dot the landscape (I’ve been very impressed by the experiences I’ve had with Rock Health, the UCSF Center for Digital Health Innovation, and the MakerMD community, and I’ve been privileged to be a co-founder of the MGH/MIT Center for Assessment Technology and Continuous Health [CATCH]) – the real question may be why more physicians aren’t leaving for startups.

Four factors may stand in the way:

1. Professional pressure to stay in the system. Many early career physicians contemplating entrepreneurship are counseled by colleagues not to “throw away” their training, and to remain in clinical medicine. While the idea of academic physicians urging young doctors to become…academic physicians is hardly new, entrepreneurship may be seen to represent a double disappointment – leaving the fold, and joining the private sector.

2. Institutional pressure to surrender all (promising) IP to the university or hospital. The flip side of the first challenge: many institutions, perennially on the hunt for new sources of revenue (especially in the context of a tight NIH budget) pounce on any physician advancing a promising idea – see this 2012 Boston Globe story involving a doctor from MGH.  I’ve been amazed by the amount of feedback I’ve received from fellow physicians about this specific concern. I suspect many academic leaders may  inadequately appreciate the extent to which their own institutional policies may be damping the exact entrepreneurial spirit they’re trying so intensively to cultivate.

3. Concern from potential collaborators and (especially) investors that physicians are more likely part of the problem than part of the solution.  I’ve heard some well-known technology-focused VCs here in the Valley suggest doctors are too enmeshed in the system to develop radically disruptive solutions — though many of these same investors have also gone on to fund companies with physician founders or co-founders.  As I’ve long argued, physicians can bring unique insight to the problems of their profession, and are often more motivated than anyone to drive change.  I believe deeply in the value of what Eric von Hippel’s, “field discovery,” in Aenor Sawyer’s “front line innovators,” in Judah Folkman’s “inquisitive physicians.

4. Inertia: The challenge of change may be the most difficult problem to solve.  Especially as their careers start to accelerate, physicians tend to be both extremely busy and reasonably well-paid (certainly compared to the salary they’d likely pull at a newly-funded startup). It’s hard to leave something you know well, and that you’re good at, at that you’ve invested so much time in, and leap into the unknown – to say nothing about the open architecture (most startups have not gotten Maria Konnikova’s brilliant New Yorker memo) and “brogramer” culture.  Not surprisingly, many physicians who ultimately leave medicine to become full-time entrepreneurs do so gradually, or else make the decision before they even enter clinical practice.

Despite these concerns, and others, the draw of entrepreneurship in medicine may prove too overpowering to restrain. As Fernandopulle summarizes:

“When I decided to strike out on my own it was seen as crazy, and there were very few physicians doing it. Now I see more and more (mainly younger) doctors deciding to leave full time practice and spend some or all of their time in startup companies. They sense the huge opportunity to remake the health care system, and people with both a clinical perspective and credibility and system/business skills will be key to building new tools and models.”

I share Fernandopulle’s enthusiasm — I’m tremendously optimistic about the potential for synergy and the opportunity for impact that physicians have at startups.  So much so that (disclosure) I’ve recently changed jobs, and this very week, joined a silicon valley startup, DNAnexus, as Chief Medical Officer, where I’ll get to focus on a topic that’s animated me since I read Eighth Day of Creation in high school: delivering upon the collaborative, patient-inspired vision of genome-enabled (really, data-enabled) medicine.

My former biotech colleagues have no doubt concluded that the world is already a better place.

This post comes from our partnership with The Direct Primary Care Journal and was originally posted on the Health Care Blog.

Dr. David Shaywitz

Dr. David Shaywitz

    Dr. Shaywitz is trained in internal medicine and endocrinology at MGH, and conducted his post-doctoral research in the Melton lab at Harvard. He gained experience in early clinical drug development in the Department of Experimental Medicine at Merck, then joined the Boston Consulting Group’s Healthcare and Corporate Development practices, where he focused on strategy and organizational design. Most recently, he was Senior Director of Strategic and Commercial Planning and Corporate and Business Development at Theravance, a publicly-held drug development company in South San Francisco, where he concentrated on new product development and led a product team. He's also the Chief Medical Officer of Mountain View-based DNAnexus, where he focuses on delivering upon the collaborative, patient-inspired vision of genome-enabled (really, data-enabled) medicine.

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