Medsider: Learn from Medtech and Healthtech Founders and CEOs - Marrying Clinical Outcomes with Cost Savings: Interview with Hinge Health President Jim Pursley

Episode Date: December 7, 2022

In this episode of Medsider Radio, we sat down with Jim Pursley, President of Hinge Health.Jim has spent the last decade tackling some of the biggest problems in healthcare. He was part of the founding executive team as the Chief Commercial Officer of Livongo Health, and took the company public, culminating in an $18.5B acquisition by Teladoc Health. Since March 2021,  Jim has been Hinge Health's President. The company is ranked #2 on Crunchbase's Diversity Spotlight Report.In this interview, Jim discusses finding the right market, being your own biggest critic, and marrying clinical improvements with cost savings.Before we jump into the conversation, I wanted to mention a few things:If you’re into learning from proven medtech and healthtech leaders, and want to know when new content and interviews go live, head over to Medsider.com and sign up for our free newsletter. You’ll get access to gated articles, and lots of other interesting healthcare content.Second, if you want even more inside info from proven experts, think about a Medsider premium membership. We talk to experienced life science leaders about the nuts and bolts of running a business and bringing products to market.This is your place for valuable knowledge on specific topics like seed funding, prototyping, insurance reimbursement, and positioning a medtech startup for an exit.In addition to the entire back catalog of Medsider interviews over the past decade, premium members get a copy of every volume of Medsider Mentors at no additional cost. If you’re interested, go to medsider.com/subscribe to learn more.Lastly, here's the link to the full interview with Jim if you'd rather read it instead.

You are doing yourself a disservice if you don't think about both the clinical impact of your solution as well as the economic impact of your solution. Now, if you focus on a really big problem that is well quantifying and you can deliver better clinical outcomes at a lower cost, you should over a fairly reasonable period of time and build it a great business. But don't focus too much on either one of those two elements. If you can avoid it, focus on both and tackle a really big problem that's well quantifiable. Welcome to Medsider Radio, where you can learn from proven med tech and healthcare thought leaders through uncut and unedited interviews. Now, here's your host, Scott Nelson. Hey, everyone, it's Scott. In this episode of Medsider, I sat down with Jim Persley, who has spent the last decade tackling some of the biggest problems in health care.

He was part of the founding executive team as chief commercial officer of Livongo Health and took the company public culminating in an $18.5 billion acquisition by telecom. Health. Since March of 2021, Jim has been Hinge Health's president and the company is ranked number two on CrunchBases Diversity Spotlight Report. Here for you the key learnings that we discussed in this conversation. First, go big when picking a market. It's much easier to convince providers to spend money on a more cost-effective solution to a problem they're already paying for than to convince them of a different problem they don't believe exists. Second, put evidence of cost savings above impressive ROI numbers. You have to be honest with yourself. about the degree of economic savings your product creates.

If you focus too much on in-material numbers, you may end up making poorly calibrated decisions. Third, focus on both cost savings and clinical advocacy. Both are critical to building a profitable technology that improves people's lives. Focusing on either one to the exclusion of the other means building a business on a poor foundation. Okay, so before we jump into the discussion, I wanted to let you know that we just released the first volume of MedSider mentors, a print-based book that signed. summarizes the key learnings from my favorite Medsider interviews over the past six months. Look, I fully realize it's tough to listen or read every Medsider interview that comes out.

Even the best ones. But there are so many valuable lessons you can glean from the founders and CEOs that join our program. So that's why we decided to create Medsider mentors. It's a way for you to learn from the best thought leaders in our space in one central place. Here's a teaser of what you'll see in this first volume. Garh Hong Kong, founder of HealthQuest Capital, teaches you how to successfully pitch your startup. Patricia Ziliak, CEO of Ivansons, discusses what you really need to know about clinical trials. Jared Bauer, CEO of Ionic Sciences, shares best practices for avoiding obstacles in your startup journey.

That only scratches the surface, so if you're interested in learning more, head over to medsiderradi.com forward slash mentors. If you're a premium Medsider member, you'll get free digital access and a print version sent straight to your door. If you're not a premium member yet, you should definitely consider signing up. In addition to every volume of Medsider mentors, you'll get full access to the entire library of interviews dating back to 2010. This includes conversations with experts like Erica Rogers, CEO of Silk Road Medical, Dr. David Albert, founder of LiveCore, and so many others. Learn more by visiting MedsiderRadio.com forward slash mentors. Again, that's Medsider Radio.com forward slash mentors. All right, without further ado, let's get to the interview.

All right, Jim, welcome to Medsider Radio. Appreciate you coming on. Thanks, Scott. It's a pleasure to be here. Yeah, looking forward to the conversation. I think it'll be a fun one, especially considering kind of the cool things that you're working on. You and the team are working on at Hinge Health. So with that said, let's start off with just some preliminary kind of background information prior to joining and kind of leading the team at Hinch Health. Can you provide like a high level overview of your professional background? Sure, sure. I've been in health tech most of my career. First and foremost, GE Healthcare.

and then with a couple of smaller companies, notably and most recently, LeVongo, which is a company that I helped to start back in 2014 with a handful of a very talented and capable individuals, and we grew that company, took it public back in 2019, and then ultimately sold the company to Teledoc in 2020. But really, again, been at the intersection of healthcare and technology, most of my career with a specific passion for trying to solve big problems

that can have the potential to transform people's lives for the better, whether it's chronic conditions like diabetes or today with Hinge Health and muscular skeletal pain, be able to work on really big problems at global scale and be able to bring design technology and health care together in novel ways has really been the passion of my career. Cool. That's great. And for those listening that don't get a chance to get to the write-up, definitely encourage everyone to check out Hinge Health. and the website is, is it Hingehealth.com, Jim? Is that right?

Yes, sir. Got it, got it. Yeah. Super interesting technology, which we'll certainly learn more about as the conversation unfolds. But I remember checking out Hinge, gosh, it was at least a year ago. And I was like, wow, this is super, this is super interesting, right? And since then, it probably was, it might even before you joined. And I was like, I wonder, this seems like really, like really compelling tech.

So can you help us? give the audience kind of a high-level overview for what it is, right? And maybe kind of frame that up around like how the idea even came to be. Sure, sure. So at Hint, we're focused on on muscular skeletal pain, whether it be an acute injury, pre-posturgical rehab, or chronic pain. The idea is to, well, it may take a step back. So roughly one and two Americans are suffering from some type of muscular skeletal issue. So it's an enormous problem. A lot of folks think about cancer, diabetes, use as some of the biggest cost drivers, and they are very significant cost drivers, but muscular skeletal issues actually dwarf both of those. It's costing the U.S. healthcare system

around $600 billion a year. It's one of the top cost drivers for health care in general, whether it's Medicare or large self-funded employers. So it's a huge, it's a huge issue. And kind of pre-hinge, there was a number of friction points or barriers that were preventing folks from getting the support they needed. And what ultimately that led them to was to pursue more costly, potentially more damaging alternatives like surgery or opioids. And so our co-founders, Dan Perez and Gabriel Mecklenburg, looked at this problem and said there is got to be a better way. How do we elegantly apply technology in a thoughtful way, coupled with caregivers, physical therapists, health coaches, in a way that delivers a significantly better,

user experience that our members will love. They'll be drawn to it. If they're drawn to it, they'll engage with it. And if they engage with it, can we produce better clinical outcomes? And ultimately, can we bend the cost curve in a big way? And so that was the thesis behind Hinge help going back to 2015 when it was founded. And, you know, you fast forward to today. And that is proven to be the case. Over a thousand clients, several hundred thousand active members today are relying on Hinge to do physical therapy. And it's been a fantastic journey. And what's really exciting is we've come really, really far since then,

but in many ways we're just getting started. And that's what gets me excited when I wake up every morning thinking about how much work left we have to do, how many people are suffering still in silence, both here in the U.S. and around the globe. And so that gives you a little bit of insight into how we think about Hinge. Yeah, yeah, definitely. And those numbers that you, that you referenced, right, the $600 billion that are spent on on this sort of, you know, category, it's interesting because when most people think about, you know,

massive chronic, you know, whether it's chronic or acute, but massive healthcare conditions to solve for, you mentioned them earlier, right? It's typically like, you know, cardiovascular disease, you know, cancer, diabetes, et cetera. And they don't realize, like, how big of an issue, you know, this, you know, this is, right? And just personally, I can think of even, even like my mom as an example, right. She's retired, you know, barely recently retired, but like not that old. And to get to a physical therapist is just like, you know, for some, she's, she's, she's spent most of her time as a nurse, right? And so she has some lower back issues. And so to get to a physical therapist is just kind of, you know, can be inconvenient, right? And, you know, sort of like a painful experience. And what your,

what your team is doing at Hinge is, you know, hopefully a much easier way, right, to allow for better compliance across the board. Yeah, no, that's, that's right. There's a, there's a number. of barriers just quickly. One is the financial barrier, whether it's a co-pay or if you're in a highly deethable health plan, you know, out-of-pocket expenses. And so there's a financial barrier that sometimes inhibits folk from pursuing

PT. There's availability, depending on what the nature of your injury is. So take, for example, our women's pelvic health program. Pelvic health physical therapists are in very short supply. And even if you have the financial means and you have the desire and the wearerthal, you just can't

get an appointment with a pelvic health PT. They've got long wait times. And there's access issues. So convenience, you know, let's say you're, you're driving a truck for, you know, for UPS or DHL. And, you know, you're working a full shift all day. And then the evening, you've got to worry about childcare and you've got to make an appointment and figure out, you know, how you're going to fit PT into an already hectic and busy lifestyle. And that just discourages people from pursuing it. And as result, the pain doesn't get better. It oftentimes gets worse. And ultimately, it leads people to get an unnecessary surgery in many cases or to try some type of alternative, like opioids, which as we know, our nation is wrestling with a tremendous opioid epidemic, and that's only getting worse. And so,

so you know, so you just look at that. You look at all that friction. You look at the cost and you just say to yourself, there's got to be a better way. We can do something about this. Better is possible. That's kind of ethos behind both the founding of Hinge and what we're working on every day. Yeah, that's super helpful. And before we go any further, I mentioned the website, right, Hingehealth.com, Hingehealth.com, Hinge, health.com. If you get a chance, definitely check it out. So it's a great site.

But for those that don't get a chance to go there now and want like a high-level overview of the actual product itself, right? Let's step inside the shoes of someone that is thinking it, you know, that is maybe going to PT or has kind of some challenges, you know, experiences some of those challenges that you referenced going to PT. Can you give us a high level overview of kind of what that experience is like for a hinge health, you know, a customer? Sure, sure.

So let's say I'm struggling with lower back pain. And I work for a company that offers hinge as a covered benefit. And I raise my hand and say, I'd like to participate in hinge for my lower back pain. We're going to learn a little bit about you. How do you want to interact with us? and things like, you know, do you want to use, you know, your own smartphone? Do you want us to ship you a kit? And let's say you say, you know what?

I'd like a kit shipped to me. We're going to say some sensor technology. And we're going to engage with a physical therapist to do an intake visit. So we're going to learn more about you, the nature of your pain. Interesting, chronic pain is not just mechanical. There's also a lot of other factors, neurological, behavioral that fit into chronic pain. So the physical therapist is going to do this intake visit with you. We're going to learn about.

you and the nature of your chronic pain. And then we're going to put together, we're going to put together a treatment plan. It's going to include exercise therapy, working with your physical therapist. Depending on what you're working on, maybe you want to lose some weight because maybe obesity is exacerbating your lower back pain.

Maybe you're having a hard time sleeping, whether it's adjusting your diet. So we're going to put a comprehensive care team, a health coach, retro dietitians, nurse practitioners are going to put them around you and develop this treatment plan. And then we're going to execute that and we're going to use the sensor technology or computer vision to make sure that, one, you're doing your exercises as well as you can and to keep encouraging you in Maffang. So, Scott, we see you're doing your exercises first and foremost.

Congratulations. Fantastic. But we've noticed a couple of things on these three exercises. Let's try this, this, and this. And I noticed that, you know, you're not doing this exercise. Why is that? Well, you know, Jim, that really hurts. Okay.

Well, let's swap that out for a different exercise. or maybe physical therapy has always just been too painful for you. And so you've never really started. Let's ship you Enso. It's our non-addictive, non-invasive pain relief technology that can provide instantaneous pain relief, which allows you then to engage in physical therapy, maybe for the first time ever, because typically it's been too painful. So it's this elegant integration of sensor technology, computer vision, PT, led by a physical

therapist and supported by health coaches and a comprehensive care team. And then a host of other technologies like our Enso technology, which again is one of the leading non-addictive, non-invasive pain technologies that can take the place of opioids for that person who just says maybe PT is too hard or I need a little extra support. And so all that together is the Hinge Health program. And we're seeing, again, fantastic result. Big reductions in pain, big reductions in cost, which is driven a lot by reductions in primary care. utilization, surgery, imaging. We can get into more of those details as well. But that should give your listeners some sense of what the Hinge Health offering is and looks like.

Yeah, that's super helpful. And is 100% of the program facilitated virtually, then if I'm a Hinch Health customer, I do this all at home, then correct? That's correct. Yeah, got it. Really, home or wherever is the most convenient for you. It could be at the office. It could be a place at work.

It could be in your hotel room while you're traveling. It could be in your home. But the idea is that you get to engage with physical therapy where you want, how you want, when you want, in a way that, again, lead you to do it and engage in it. And if you engage in it, you should see better results. And so, yes, so the idea is that it's done virtually in a way that's most convenient for you. Got it. Yeah. So I mentioned earlier, like when I first heard about Hinch Health or came across the technology, I think at that point in time, it was most of it was centered around that sensor-based technology.

but it sounds like this is much more comprehensive, you know, than I even, than I even realize. So it seems like the team is making, you know, really, really strong strides on that note. So let's- Scott, real quick, the sensors are kind of the foundation of what we got our start. And sensors are a significant improvement over just watching a video or just, you know, doing physical therapy, you know, via Zoom. Big step forward. The challenge with sensors is that you still have to have to have.

them. And so let's say you're, you know, you're really mobile. You're a flight attendant at free night airlines and you're on the go constantly. You're having to always bring your sensors can be inconvenient. And two, there's just some body parts, hand, wrist, neck that just don't lend themselves great to sensor technology. And so last year, we acquired a company out of Montreal, one of the global leaders in computer vision technology. And we're really building out computer vision. One, from an user experience perspective, it's just more convenient. a lot of cases, just to be able to use the camera that's on your smartphone or your iPad. And two, it just lends itself better.

There can do a whole body motion assessments. You can look at fingers, hand, wrists. There's some fine motor skills that sensors, again, just aren't well equipped for. So it's the combination of sensor tech, but also we're investing heavily in the next generation of computer vision. And we're really excited about kind of what's to come in the computer vision space. That's cool. That's great to know.

Thanks for that background information. I think that helps set the stage kind of for the next part of the conversation, which I think is really more focused around kind of your key, you know, key lessons learned that, you know, you've picked up on over, over time and throughout kind of your health, your health technology career, Jim, but also, you know, some of the, you know, some of the key learnings that you're pulling into the hinge and how you're moving the company, you know, move forward. So on that note, let's talk a little bit about the early kind of concepts, right? And you touched on this, you know, briefly when you talked about kind of the, you know, the initial thesis around the idea for Hinch Health. In your experience, you've worked with a lot of startups in the, in the kind of the broader kind of healthcare field, health technology arena. When you think about trying to find product market fit, you know, in this early kind of concept and ideation process, what are some of the key lessons that you've learned or maybe conversely, like where do you think most, you know, healthcare entrepreneurs make the biggest mistakes, you know, at this, at that stage? Yeah, that's a good, it's a good question, Scott. There's a,

There's an old question that always kind of makes me smile. You know, when Willie's son, the famous bank robber, was asked, you know, why he robs banks and to which he answered, that's because that's where the money is. And as you think about the health care landscape, there's a lot of things that are impacting us in our health. You know, the list in some cases is long than we have time to go through. But, you know, if you want to kind of get that product market fit and get off the ground quickly, you have to tackle something that is that is really big and ideally quantifiable and dollars

are already being spent there in a pretty meaningful way. So you think about at Lavongo, we're tackling diabetes. That's where we got our start. And the challenge of diabetes is well understood. It's quantifiable. You know, every benefits consultant is able to run a report for their client around the cost of diabetes, whether it's insulin or oral medications or test strips and meters, but there's this well-defined cost. It's a big problem and it's dramatically affecting people's quality of life. So you have that kind of perfect triple aim. You know, you see other folks going after things, whether it's just affects a smaller percentage of the population. Maybe the cost is really downstream, 10, 20 years downstream. It's not to say those things aren't

worthy of innovation and investment and energy, but it's harder than when you're tackling something that, again, is a really big problem, fairly well understood, quantifiable. And folks are already spending money that maybe in an inefficient way. You know, think about like Uber and taxis. Maybe it's not the best example, but, you know, Uber wasn't trying to convince you that you want to go somewhere or that you want to leave your home. And you were going to spend money in an inefficient, unpleasant way to get from the airport, you know, to your meeting. And they stepped in and said, there's a better way to do this. There is a better user experience at a lower price point.

And we loved it as consumers. And so, you know, think about healthcare the same way. You know, there's one thing to try to convince a whole bunch of people to see a problem that they didn't fully appreciate or recognize versus saying you're already spending time and money and energy here. You're just doing it in an unpleasant, maybe an inefficient way. And there's a better way. And so that's, that's, you know, as I think about product market,

fit. And that's what you saw at Lavanga. The product market fit was incredible and people flop to it. And that was a big part of why we grew so quickly and so successfully. And we're seeing it again, it hinge with muscular skeletal pain. I don't have to convince you back pain. You feel it every single day. And all you want desperately is to be able to get down the ground and play with your kids or to be able to walk with your wife in the evening or whatever it is. And the cost is very quantifiable. And so I think those are the kind of the elements of that product market fit that entrepreneurs should think about as they're deciding, is this kind of the next thing that I want to do? You touched on so much good stuff there, but like a couple of the things

that that really stood out to me in that answer was tackling a problem that's quantifiable, right? And then two, where dollars are already being spent. And I recently interviewed a guy by the name of Dan Clark, who's running a company called Linear Health. And he touched on on that quantifiable aspect and the fact that they're addressing a very large problem. But it wasn't as, it was much more difficult to quantify. And right, so that was a whole kind of convincing process that they had to make across, you know, various stakeholders just on how really big of a problem that is. And that's just an extra challenge, you know, a challenge that's, you know, that's one more challenge in the life cycle of a startup company, right, that's trying to get out of the starting blocks. And I think your

your point about making sure that you're addressing a problem that ideally is quantifiable is really, really important. Yeah. Yeah, I think that's right. When we expanded at LeVong, going to hypertension as an example,

it's a big problem with cardiovascular disease. A lot of folks are trying to tackle hypertension, but the cost of hypertension is really hard to quantify. It's typically people are asymptomatic, so there's not a recognized need. And the costs are really, they're significant, but they're very downstream. You know, cardiovascular disease can take years and years to develop. And again, most people feel pretty healthy while they're developing cardiovascular disease.

And so, you know, we started with hypertension or if that's all we did was hypertension, you know, that's a tough sell. And the economics of hypertension aren't as favorable. It was a really nice, natural product line extension. And we were able to price it, you know, very reasonably and kind of as a bundle. And so it worked great for us. But there's just an example of a very reasonable. real clinical need that, you know, we should address in some ways, but it's hard to kind of build

a whole business around it because it's, you know, it's hard to quantify. It's asymptomatic. And so, you know, it just doesn't get the same attention as some of these other opportunities. Yeah, yeah, no doubt. And your other comment that you made about, you know, making sure that you're addressing a problem where dollars are already spends. And that's one of the things that we, you know, we talk about a lot here with these, you know, various medsider interviews that and, you know, with founders and CEOs of med tech and health tech companies is that if you're not thinking about, you know, who's actually going to pay for this technology as early, you know, as early as possible, right? That's a big mistake, right? And so, you know, with Hinge as an example, dollars or major

dollars are already being spent and allocated, you know, towards addressing this problem. It's not something, it's not a hurdle that you have to cross. It like it intuitively makes sense. Everyone knows that, you know, a lot of money is being spent in this category. So making sure you're addressing a problem where money is already, you know, being spent and allocated and budgeted for is a definitely important as you're thinking about, you know, taking on a big challenge or a big, a big problem. Yeah, for sure. On that note, let's talk a little bit about scientific evidence, right? You've got, you know, some pretty impressive, you know, clinical data with Hinge Health already. So when you think about this topic, right, of trying to substantiate a technology,

a device, a platform with actual clinical evidence, you know, what are some of the key things that you think need to be baked into that, that plan, you know, and maybe, maybe, you know, kind of frame that up around, you know, for other entrepreneurs that are thinking about what their clinical roadmap should look like over the next, you know, maybe two, three, five years. Hey there, it's Scott. And thanks for listening in so far. The rest of this conversation is only available via our private podcast for MedSider premium

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