Lessons for entrepreneurs from Orchid's rollout: Gambling with patient lives is not an option

Health systems like Providence Health & Services and OSF HealthCare have accepted the digital rounding tool called Orchid with open arms because it adds value for their hospitals and care providers.

Today, CipherHealth's software is up and running in over 300 hospitals. The New York-based startup hopes to expand its share of the acute care market and move into other care settings. Orchid's adaptability allows the program to fit into subacute care units, long-term care hospitals and ambulatory surgery centers.

“It has been a tremendously fun journey over the last six years, watching the company grow and seeing the adoption of our technology,” said Alexander Hejnosz, co-founder of CipherHealth along with Randy Cheung and Zachary Silverzweig. Before launching the startup, the 29-year-old entrepreneur worked as an emergency medical technician and studied biology at the University of Pennsylvania.

Hejnosz and his colleagues have clearly gained the trust of some of the nation's larger hospital systems. How did they manage to move from promising start-up with pilot projects to system-wide rollouts?

For starters, they quickly learned that traits that may fly in the Silicon Valley tech world such as risk-taking or impulsivity don't play well in the healthcare industry. Healthcare settings with lives on the line are not playgrounds for figuring out how to make key parts of your product work.

“In tech, there is the general belief of 'Fail fast, fail often, fail early,' but I don't actually think that applies in the healthcare arena because it is such a small ecosystem,” said Hejnosz. “If you try to do something, and it fails—well, executives change jobs every couple of years and all know each other, so you really only get one shot.”

CipherHealth hedged its bets by starting small. Providence Health & Services, based in Oregon, began with Orchid going live at only one out of its 32 hospitals. After proving the concept, they rolled out the technology at several more over the ensuing months.

They also learned to deal with complex issues like data security, which in healthcare required learning about HIPAA privacy regulations. “Being hyper-vigilant around security is a really strong consideration that all other entrepreneurs and tech companies should take into account,” Hejnosz said. “There's nothing that can kill a small or emerging business faster than a data breach.”

Startup partners who haven't put significant time and attention into HIPAA compliance may leave their upstream customers—for instance, hospitals or physicians—exposed to security breaches. Such concerns particularly apply to digital rounding software like Orchid because patient data is pulled directly from electronic medical records.

Also, identifying champions of the product early on who reside within the health system will provide startups with valuable “super users” that can serve as local resources. Having these key individuals serve as experts in the application helps speed adoption within the hospital and eventually across the system.

Lastly, Hejnosz stresses that scaling adoption across multiple hospitals in a system requires solving technical integration issues sooner rather than later. Startups can make the mistake of launching with a preliminary version of the software, which complicates user training and can disrupt workflow when a new version has to be installed.

“You've got to get on the ground, and what I mean by this is that focus should be on user functionality versus buyer functionality,” said

Matthew Bates, managing director at Huron Consulting Group. “There could be things about the software that the C-suite think are wonderful, but the nurses find they can't work with.”

Meeri Kim is a freelance healthcare writer based in Los Angeles.