Experts say hospitals must plan for providing care after an attack

Cybersecurity and patient safety

Experts offer advice for hospitals on protecting systems and patients

Tips and tough love

Criminals know smaller systems are vulnerable to cyberattacks

Targeting small hospitals

Manpreet Singh Dhalla is a founding partner at Reverence Care

For the nation’s home health business, 2023 promises to be a year of tectonic change.

Starting in January, the Centers for Medicare & Medicaid Services (CMS) plans payment cuts so substantial that the National Association for Home Care and Hospice, the leading industry group, says 

of the country’s home health agencies will operate at a deficit.

 nationally its value-based reimbursement program, the Home Health Value-Based Purchasing (HHVBP) Model — incentivizing agencies to prioritize the quality and outcomes of care over simply maximizing the quantity of services provided.

The combined impact of the proposed payment cuts and a continued shift away from the traditional fee-for-service (FFS) model is a not-so-subtle nudge for home health agencies to innovate—both clinically and financially— and to do so with urgency. This change represents a generational opportunity for forward-thinking agencies to embrace and effectively implement new models of providing in-home care.

As a former operator of a home care agency, I am acutely aware of the challenges and opportunities posed by this pivotal moment. While home health agencies will inevitably make reactive adjustments going into 2023, this moment marks an opportunity to make more holistic changes to truly improve outcomes for in-home care delivery. Specifically, by focusing on patients' care transition as they move from acute and post-acute care settings to home-based care settings.

Transitional care is extremely complex. There are multiple stakeholders (provider groups, caregivers, families) involved often without visibility, coordination, or proper communication between them. This disjointed process can not only leave patients and their families feeling overwhelmed and underinformed. Far too often, it leads to preventable emergency room visits and hospital readmissions—thereby putting patients at risk and burdening the system with unnecessary costs and poorer health outcomes.

The negative outcomes surrounding transitional care are most prevalent within the elderly community and amongst vulnerable patients with chronic conditions. A recent 

 shows the negative impacts of healthcare transitions for adults with chronic illnesses: roughly 26% of patients experience emergency room visits, 18% are rehospitalized, 66% experience adverse drug events, and a whopping 81% experience medication discrepancies.

These poor patient outcomes are highly concerning, yet also unsurprising given how siloed care management is today. Just imagine the game of telephone that occurs when an elderly patient— who has multiple diagnoses, complex conditions, and numerous healthcare providers—is transitioning from a hospital to a skilled nursing facility and finally back to his or her home.

At the hospital, this patient will be treated by a physician, numerous specialists, and a nursing team, then a different physician and nursing and therapist team during a stay in a skilled nursing facility, and finally a visiting nursing and therapist team, a team of caregivers, and family members when back in the home.

Without a holistic, real-time perspective of a patient's daily care needs, home dynamics, and personal care goals, it is nearly impossible to provide high quality care.

All too often, a lack of coordination and communication leads to issues with medication reconciliation, DME fulfillment, and misunderstandings about follow-up visits and daily care needs—especially when the patient moves from a care facility into the home.

I’ve personally experienced numerous occasions when my former agency would send caregivers to a recently discharged patient’s home and see that the patient arrived home without his or her updated medications, needed medical equipment (such as a hospital bed or oxygen tank), or a physical therapy provider in place. Providers often operate independently and don’t have the resources or processes to ensure follow-through on seemingly simple tasks, which leads to care aides scrambling and patients suffering.

As it stands, there is often no coordinated communication or unified patient view (with real time updates) amongst caregivers and providers to optimize transitions of care and health outcomes. Therein lies the problem that must be solved–and solved quickly.

Next year's introduction of the HHVBP model offers optimism for providers who focus more on clinically effective patient outcomes. The program will hopefully prompt others to examine how they provide care.

Furthermore, as home health agencies continue to face rising nursing costs and lowered reimbursement, the need to innovate is paramount – both through the adoption of technology and improved processes that focus on value and outcomes.

Specifically, there will need to be an increased focus on transitional care, especially in conjunction with chronic care management. Providers should utilize technologies that increase communication and coordination amongst care stakeholders, while simultaneously investing in tools that enable real-time monitoring of patients and their adherence to the most critical tasks (e.g., medications, follow-up visits).

Focusing on processes that are proven to significantly improve health outcomes and reduce avoidable readmissions will also be important. This includes standardized risk assessments at discharge; automated alert mechanisms to proactively escalate care interventions; and proactive, frequent check-ins with patients or families.

Finally, implementing new technologies and processes to improve transitions of care will place an increased emphasis on care coordinators. Care coordinators are best positioned to utilize emerging technologies that help them “quarterback” and manage a patient’s care, family, and provider team.

Ultimately, providers willing to innovate and adopt change will be best suited to thrive in a reimbursement and inflationary environment that favors more value and risk. Focusing on ways to improve transitions of care will inevitably enable better outcomes and position providers to become more financially sustainable.

Manpreet Singh Dhalla is a founding partner of Reverence Care, a home care technology company.

Articles

CMS is moving to a value-based reimbursement program for home health agencies. This change represents a generational opportunity for agencies to implement new models of in-home care.

Solving the blindspots in transitional care | Manpreet Singh Dhalla

Rob Allen has been named the new president and CEO of Intermountain Healthcare.

Allen has been Intermountain's chief operating officer. Allen will succeed 

, Intermountain’s interim president and CEO, on Dec. 1. Jumonville will serve as Intermountain's executive sponsor of integration until the end of 2023, when she plans to retire.

, who served as Intermountain’s CEO for six years, said in August he was stepping down. Harrison accepted a new position to run a healthcare platform business for General Catalyst.

Intermountain, a nonprofit system, operates 33 hospitals and 385 clinics  in seven states. Earlier this year, 

Intermountain completed a merger with SCL Health

“I’m humbled and proud to have this leadership opportunity, working with our incredible team of caregivers and providers,” Allen said in a statement.

“Each of us has the privilege to build on Intermountain’s legacy and carry forward our mission and charge to be a model health system that inspires the world,” he said. “Intermountain is a place for big ideas and even bigger hearts. I’m confident that we will continue helping people live the healthiest lives possible.”

Allen joined Intermountain in 2008 and has been chief operating officer of the system for six years.

He has 25 years of leadership experience in healthcare and previously served as the CEO of hospitals in Massachusetts, New Jersey and Wyoming. Intermountain said Allen was selected after a search that included leading candidates from across the country.

Mike Leavitt, chair of Intermountain’s board of trustees and the former U.S. Secretary of Health and Human Services, said in a statement, “Rob embodies the Intermountain values and will provide steady, servant leadership to the organization. He has always put our patients and caregivers first.”

MyMichigan Health selects chief medical officer

Paul Berg has been named chief medical officer of MyMichigan Health.

Berg will oversee the medical staff, graduate medical education, clinical quality, and population health. He succeeds 

, who begins her appointment as president and CEO of the Midland-based health system on Dec. 1.

Watson said in a statement that Berg “will be a tremendous resource as we continue to elevate standards of care.

“He has a proven track record for physician leadership and has demonstrated his expertise in both clinical and quality operations, especially during the pandemic. Dr. Berg has a true gift in cultivating relationships with our health care providers which pours over into the quality care we provide our patients.”

Berg, a family physician, has been with MyMichigan since 2005 and has served as president of MyMichigan Medical Group since Feb. 2018.

“I look forward to continue working with our teams to tackle the many challenges the healthcare system faces as we navigate the post-pandemic world,” Berg said in a statement. “I’m eager to take on that important work ahead and carry on the legacy Dr. Watson has established as the previous chief medical officer.”

He also plans to continue caring for patients. “I have been active as a hospitalist since March of this year on our Midland campus,” he said. “I enjoy my work with direct patient care and want to continue with that moving forward.”

MyMichigan Health operates nine hospitals and serves nearly 1 million people in a 25-county region.

Northwell Health announces director for maternal health center

Dawnette Lewis has been named the new director of Northwell Health’s Center for Maternal Health.

She’ll lead the center in its mission to reduce maternal mortality. 

More than four out of five maternal deaths are avoidable

, the Centers for Disease Control and Prevention reported in September. Black women are three times more likely to die of pregnancy-related causes as white women.

“The risks Black women face during and after pregnancy and childbirth are a shameful illustration of the disparities that continue to diminish the well-being of our nation,” Michael Dowling, Northwell Health’s president and CEO, said in a statement.

“Dr. Lewis has long been a leader in the effort to eliminate the inequities that produce these deplorable risks,” Dowling said. “We are confident that she will lead the Center to success as we provide the resources and do the work to ensure that Black women and their babies get the care and attention they need not just to survive but thrive.”

Lewis has practiced for more than 20 years in maternal-fetal medicine. She is also physician lead for the New York State Birth Equity Improvement Project.

“Supporting birthing people before, during and after pregnancy is one of the highest responsibilities a society has, and Northwell Health has made a commitment to decrease the risks that have unfairly burdened Black birthing people and their babies,” Lewis said in a statement. “I’m proud to help guide the health system in keeping that commitment and ensuring that all women are given the tools they need to stay safe while bringing life into the world.”

President Biden’s administration has focused on improving mental health. At the HLTH Conference this week, 

 administrator of the Centers for Medicare and Medicaid Services, said, “It’s really a disgrace where our country is in maternal health outcomes.”

Texas health system announces new president

Kimberly Shaw has been selected to serve as president of St. Joseph Health, which operates five hospitals in Texas.

She will begin her new role Dec. 27. St. Joseph Health is a member of St. Luke’s Health and part of CommonSpirit Health.

Shaw has more than 30 years of healthcare leadership experience, including Catholic and faith-based hospitals within CommonSpirit Health. She has been serving as the president of Dignity Health St. Rose Dominican San Martin in Las Vegas, Nevada, for the past three years.

“I’m excited to return to Texas, where I have deep family roots, in this important role with a health care system as impactful at St. Luke’s Health,” Shaw said in a statement. “I look forward to collaborating with the compassionate team of caregivers at St. Joseph Health to continue delivering the high quality compassionate care our communities deserve and have come to expect.”

St. Luke’s Health CEO Doug Lawson said he has the “highest confidence” in Shaw’s leadership skills.

Kim is an inspirational, servant leader who understands the challenges at the bedside for frontline staff and the importance of delivering compassionate high quality care to our communities,” Lawson said in a statement.

St. Luke’s Health operates 16 general hospitals in Texas.

In other news, MyMichigan Health hires a chief medical officer and Northwell Health selects a director for a maternal health center.

Intermountain Healthcare names new CEO, and more | MED MOVES

Mindy Kairey, senior partner of Korn Ferry, speaks at the HLTH Conference, Tuesday, Nov. 16.

Women are gradually making more progress in becoming chief executive officers, but most of those in the corner office are still men.

female CEOs are leading 44 of the Fortune 500 companies

 (8.8%). The healthcare industry actually does better compared to others, with women leading about 15% of healthcare organizations, according to an 

Mindy Kairey, senior partner of Korn Ferry, a consulting firm, talked at the HLTH Conference about ways women can rise up the ranks.

, surveying their perspectives and interviewing leaders about their roles and how they reached the C-suite. Kairey spoke about the report and its findings at HLTH, and she spoke with 

 about the report and how women can move up the corporate ladder.

“What we found is that these women take very different paths,” Kairey said. “There’s no one straight linear direction on any of these women. It’s all over the map. Everybody’s different. Everybody’s unique.”

At the same time, some common threads emerged from the discussion of women leaders, and they can inform younger women who dream of running companies. 

(See video of our conversation with Mindy Kairey. The story continues below.)

Women can bolster their chances of rising to chief executive officer by putting themselves into positions where they are running the finances of an organization. Many women rise in marketing and sales, and those are valuable roles, but companies want to see executives who know how to manage profits-and-loss centers.

“Somehow or another at the end of the day, try to be managing a business,” Kairey said. “Because at the end of the day, your ability to demonstrate that you can do that, particularly with the competitive and financial pressures that exist in the market today, every board wants to have confidence that you know how to manage the business.”

Women doctors are suffering bigger career setbacks in COVID-19 pandemic

Women should also look to find ways to earn seats on the boards of other corporations or non-profit organizations, Kairey said. Even voluntary positions on other boards can be valuable.

Among the women CEOs interviewed in the Korn Ferry report, 70% said early experience serving on board proved to be very valuable. They developed leadership skills and also gained a higher profile.

“That perspective of working with other companies is really helpful and additive to your overall experience, and positions you well to be ready to step into the CEO site where you’re reporting to a board,” she said.

Increasingly, companies are also looking for chief executives who are empathetic and know how to get the best out of workers. Boards are also looking at leaders who know how to collaborate with their teams.

Companies don’t just want strategic thinkers. They want leaders who connect with their employees and inspire them.

“One of the things we’ve seen in spades coming out of the pandemic is, more often than not, it’s a requirement by the board for the CEOs that they’re hiring … that they have empathy, that they are caring, that they are genuine, that they have high EQ, that they are building a culture of positivity and positive energy,” Kairey said.

“And quite frankly, women do that really well,” she added. “So let’s use it.”

Organizations that are looking to help provide women with more opportunities for executive roles should look at the qualifications, because some demands may exclude some women, and some minority candidates.

Companies also require advanced degrees, and some prefer graduates from Ivy League schools, preferences which may shrink the pool of candidates and create impediments for female candidates and people of color.

Female doctors earn $2M less over their careers

More women should be aiming high and striving to be chief executives, the Korn Ferry report suggests. Some women leaders said they didn’t consider themselves as potential CEOs.

More than half of the women who were interviewed touted the merits of embracing challenging assignments earlier in their careers and delivering results. Those wins helped women gain confidence and credibility in their organizations.

Korn Ferry worked with the Rockefeller Foundation on the report. The Rockefeller Foundation has set a goal of seeing women leading 20% of the Fortune 500 companies by 2025.

Most chief executives are men, but women are making progress in getting to the C-suite. Mindy Kairey of Korn Ferry says more companies are looking for leaders with empathy and positivity.

How women can improve their chances of becoming CEOs | HLTH Conference

Dr. Tiffany Avery is Chief Medical Officer for 

, responsible for providing clinical strategic direction.

Access to quality healthcare should not be a privilege for a select few, it’s a basic right.

 of social, economic, and environmental factors exist that often restrict access. These issues affect a wide variety of medical conditions, specifically chronic conditions—examples include heart disease, cancer, stroke, and diabetes.

 Americans suffer from at least one chronic condition, and as disparities in care continue to affect populations across the country, many are not receiving the level of optimized care needed. In addition, chronic conditions like diabetes, hypertension, and cancer account for the overwhelming majority of U.S. healthcare expenditures, with some reports citing the total annual costs at 

The healthcare ecosystem has its fair share of challenges, from administrative burdens to strenuous regulations. Amidst these issues, it may seem impossible to address and amend inconsistencies in care.

For this reason, it is important that health systems implement proven tech solutions that aggregate evidence-based data and protocols to determine treatment plans that provide optimized outcomes for all patients.

An evidence-based approach allows providers to make informed analytical decisions founded on up-to-date, valid clinical data, including an accessible database listing historically effective treatments.

Relevant, indispensable data—readily accessible to all physicians, specialists, and medical staff—can help clinicians navigate complex treatment options, and improve patient outcomes. Advanced technology bridges gaps in healthcare by pulling together discordant data and providing a clear picture of patient needs without resorting to a lengthy and costly 

As an example, cancer treatment sometimes varies depending on the circumstances of diagnosis without a firm foundation of uniform, evidence-based data, and medical intelligence. It is not uncommon to find different treatments within the same provider networks.

, 442.4 new cancer cases are identified per 100,000 men and women each year, and there are 158.3 cancer-related deaths. Ongoing evidence-based research evaluates new and existing treatments, producing an extensive database of proven approaches and clinical trials which are continuously updated and refined. 

The challenge for providers and payers is that newly discovered evidence can frequently change the protocols, and keeping up with the new findings is increasingly complex. Treatment validation tech helps to sort through the massive amount of medical options, clinical studies, and statistical data to identify the most effective procedures. 

Eliminating disparities in healthcare is only possible through a multifaceted approach at all levels of care delivery. Utilizing treatment validation tech can strengthen the relationship between all parties and make laborious administrative processes more efficient.

For example, providers and their staff often get caught up in arduous tasks like securing health records from multiple locations and wading through mounds of paperwork. The simplification of basic processes streamlines workflow and allow providers to direct their focus more toward optimizing care for their patients.

Treatment validation technology provides needed tools for improving equity and consistency in care across all conditions. While these digital solutions will unfortunately not solve societal inequities, they provide healthcare professionals the tools and resources needed to effect actual change in health outcomes.

Dr. Tiffany Avery is Chief Medical Officer for NantHealth, responsible for providing clinical strategic direction.

Health systems must implement proven tech solutions that aggregate evidence-based data and protocols to determine treatment plans that provide the best outcomes for all patients.

Addressing healthcare inequities through advanced treatment validation solutions | Tiffany Avery

 - When Clearwater CEO Steve Cagle was asked if hospitals are improving their cybersecurity or if they still had a long road to go, he simply said, “Yes.”

“Making progress and still have a long way to go,” Cagle said.

Clearwater, a cybersecurity firm, works with the healthcare industry and other highly regulated industries. Clearwater recently acquired CynergisTek, another cybersecurity firm with expertise in healthcare.

, as hackers are targeting the healthcare industry. CommonSpirit Health, one of America’s largest hospital systems, said it was hit by 

 last month. Cybersecurity analysts say healthcare lags behind other industries in terms of bolstering their defenses. 

Two out of three healthcare IT professionals (67%)

 said their organizations had a significant cybersecurity incident in the past 12 months, according to the HIMSS 2021 cybersecurity survey.

 at the HLTH Conference this week, Cagle said hospitals need to view cybersecurity as a continuing process.

“Unfortunately, there’s probably not a finish line per se, because it will continue to get more complex as time goes on,” Cagle said.

“As a health system buys a new business or implements new technologies, threat actors are becoming more sophisticated and they’re changing their approach and their techniques,” he continued. “It’s an ongoing process, and one that I think healthcare is definitely getting better at. But it’s becoming more and more difficult to be at the level that you need to be in order to be at a risk level that’s probably going to be acceptable to the organization.”

 in the healthcare industry, and that’s because bad actors know that many hospitals and health systems are vulnerable. Ransomware groups have breached patient records, which are a treasure trove of both health data and financial information. Attackers also know that hospitals will pay to get access to their records, experts say, even though authorities advise against paying the ransome.

“Threat actors have become more aggressive because it is a juicy target,” he said. “It’s an easier target as well.”

Hospital executives play a critical role in bolstering defenses against cyberattacks. Cybersecurity isn’t just the province of the IT departments.

“One of the fundamental pieces of advice I would give is to ensure conversations are being had at the executive level of the organization, that there’s continued education of boards, and there’s really great leadership from the top in terms of how we’re going to manage security as an organization,” Cagle said.

Ben Denkers, chief innovation officer of CynergisTek, told 

 that the investment and attention of the C-suite in cybersecurity isn’t just a critical factor. He called it “the most important” aspect of organizations in strengthening their defenses.

“The top down approach is the only real effective way,” Denkers said.

While CEOs can drive the change and set cybersecurity as a priority, healthcare workers need to understand the importance in protecting patients and the organization’s finances. 

The average healthcare breach now costs more than $10 million

“From a culture perspective, our employees are our best weapons against cyberattacks,” he continued. “There are so many attacks that have been successful through social engineering. Making sure we have continued security awareness, that starts at the top.”

Health systems must have a thorough understanding of all the risks in the organization, including those that come from vendors and medical devices. Health systems that are faring better in protecting themselves have undertaken robust risk assessments, Cagle said.

“As you’re beginning to get to a level of maturity in the organization, it’s really time to have a very comprehensive, thorough assessment of all the different applications in your organization, all the different systems that you’re using, and truly use that as a way to map out where you’re going to invest,” Cagle said.

“That all starts from leadership,” he continued. “Leaders really need to be sure they’re establishing that culture as an organization.”

Read more from Chief Healthcare Executive

How hospitals can improve their cybersecurity: Tips, training and tough love

Why smaller hospitals are targets for cyberattacks

Health systems have made progress, but they still have a long way to go, says Clearwater CEO Steve Cagle. Hospital executives must drive change from the top.

Hospitals must do more to improve cybersecurity | HLTH Conference

David Feinberg, chairman of Oracle Health, talks with Heather Landi, senior editor of Fierce Healthcare, during the HLTH Conference, Wednesday, Nov. 16. (Photo: Ron Southwick)

 - David Feinberg proudly talked about how Oracle Cerner is the global market share leader in electronic health records, but he’s not exactly bragging when he described the EHR.

Oracle completed its $28 billion acquisition of Cerner

 in June, he said, “we were really clear that our number one goal was to fix the EHR.”

“They are clunky, non-intuitive and don’t help clinicians,” Feinberg, the chairman of Oracle Health, said of electronic health records.

Speaking at the HLTH Conference Wednesday, Feinberg talked about how Oracle’s acquisition of Cerner is going to accelerate the transformation of electronic health records. Feinberg had been CEO of Cerner before the acquisition.

“We’ve got to make the EHR usable,” Feinberg said. “We can’t have people burning out and quitting medicine because it’s too hard to use.”

He also told the health and tech leaders gathered at the conference that 

Oracle has made healthcare its top priority

“In the next couple of years, it’s going to be easier to find information, find that needle in a haystack, and help the patient,” Feinberg said.

Digital health market in 'correction,' rebound may take some time

Other tech companies have tried to transform the healthcare industry before and crashed and burned. “There’s a lot of stories of tech companies failing in healthcare,” Feinberg said.

Feinberg said many of the failures of previous tech efforts were focused on just one aspect of healthcare.

“What Oracle is saying now is the way we’re going to do this different is we’re going to take the whole thing on,” Feinberg said.

Oracle is looking at a platform that utilizes electronic health records and improves everything from claims processing to managing the supply chain, Feinberg said.

Oracle Chairman Larry Ellison has said he wants to 

develop a national electronic health database

Feinberg reiterated Ellison’s commitment to changing healthcare. He said Ellison spoke at a recent event in Las Vegas and used 48 slides in his keynote address, with 42 focused on health

“He has said very clearly that the mission of Oracle is health,” Feinberg said. “This is a huge shift and focus.”

“This is Oracle jumping in the water,” he said.

While Oracle has big ambitions in transforming healthcare, Feinberg said the company isn’t going at it alone. Oracle is teaming up with others in the private sector.

“I want to emphasize We’re doing this with everyone else,” Feinberg said.

In a conversation with Heather Landi, senior editor of Fierce Healthcare, Feinberg said the merger of the two companies has him feeling optimistic about the future. As Oracle acquired Cerner, Feinberg acknowledged being “a little skeptical or apprehensive.”

“Tech companies think those of us in healthcare are a little stupid,” he said.

But Feinberg said the culture of the organizations have meshed well. He also spoke effusively about the Oracle team, calling his new colleagues “incredibly humble and inquisitive.” Oracle has viewed it as a marriage of a company with deep healthcare experience combined with Oracle’s success in other industries. Feinberg also noted that two-thirds of Oracle’s workforce are with the company through acquisition.

“I’m wildly optimistic that this is going incredibly well,” Feinberg said.

Ultimately, Feinberg sees the need to shift the healthcare systems, which has historically been built around the wrong groups.

“We built the system around the hospital and the physician,” Feinberg said.

“We need to rebuild healthcare, and I think we’re on our way, around the patient, the family and the community,” he said.

Feinberg also addressed the ongoing work to modernize the electronic health record system of the Department of Veterans Affairs, a project that has been hampered by setbacks and criticized by lawmakers.

delaying the rollout of the new system to additional facilities until June 2023

. The VA cited problems including “latency and slowness, problems with patient scheduling, referrals, medication management, and other types of medical orders.” The VA’s Office of Inspector General has identified issues affecting patient safety. The new system has been installed in five VA facilities.

While acknowledging the challenges, Feinberg said, “We’re making a lot of progress on that kind of list of things we want to correct.”

Early in his career, Feinberg trained in a VA medical center. He said he’s committed to getting the system in place.

“This is really personal to me,” Feinberg said.

David Feinberg, chairman of Oracle Health, talked about Oracle’s acquisition of Cerner, the need to fix electronic health records and transforming the industry.

Oracle is ‘jumping in the water’ in healthcare | HLTH Conference

A panel at the HLTH Conference examined the more challenging environment for new and emerging companies. From left, Chrissy Farr, investor, OMERS Ventures; Michael Yang, managing partner of OMERS Ventures, Cheri Mowrey, head of U.S. healthcare investment banking for Morgan Stanley; Missy Krasner, venture chair for Redesign Health; and Jonathan Bus, founder and CEO of Zus Health. (Photo: Ron Southwick)

 - Moderator Christina Farr, a health tech investor, kicked off the discussion by calling it possibly “the most depressing panel at HLTH.”

In a discussion at the HLTH Conference Tuesday, investors talked about the much tougher environment for founders building digital health companies and young companies looking to find money to grow. Startups are finding it much harder to get money than a year or two ago.

Cheri Mowrey, head of U.S. healthcare investment banking for Morgan Stanley, said, “This is a pendulum that swings. It will swing back again.”

Investors “are going to do much more diligence” before putting money into digital health companies, Mowrey said. They are going to look not just at the technology solution but the business plan, which didn’t always happen a year or two ago.

“There was so much coming to market that no one was able to do due diligence on these companies,” Mowrey said.

CMS leaders says innovation must be accessible to everyone | HLTH Conference

Jonathan Bush, founder and CEO of Zus Health, likened the current environment to tourists visiting Las Vegas. “When you go to Vegas, you have to cleanse afterward,” he said.

For digital health companies earlier in the COVID-19 pandemic, “it was exciting and manic.”

But he said a backswing of the pendulum is needed to clean out the market and allow the stronger, more innovative companies to find a way. And he acknowledged the cleanse would be “painful.”

Missy Krasner, venture chair for Redesign Health, which is in the business of creating companies, said founders aren’t going to find investors to put their money on a concept or a team unless they’re able to show profitability. The trick is to “de-risk” so investors will feel comfortable writing a check, she said.

“I feel we are in a market correction. It is a good correction,” Krasner said.

Michael Yang, managing partner of OMERS Ventures, said the pendulum has swung too far in digital health.

“We’ve overcorrected,” Yang said. “Now it’s nuts on the other side.”

The market isn’t insurmountable for founders, Yang said, but it’s going to require more work.

“If you as a founder believe in your mission, you’ve got to do whatever it takes to get to the other side,” Yang said.

Founders of health tech companies can find success, but they’ll need sound business plans. Investors are doing more homework before putting money into new companies.