Startups

Robotics can ease healthcare’s challenges. But first, there’s red tape to navigate

Execs from Omnicell, ST Engineering Aethon and Humotech discuss the difficulties of breaking into the staid industry, the long lead time in developing marketable high-tech products, and the opportunity presented by the region's particular prowess.

Pittsburgh Robotics Netowrk's Robotics in Healthcare panel.

(Technical.ly photo)

Pittsburgh has a chance to take advantage of the deep expertise in both medicine and robotics here. Three companies working in the overlap of those industries are looking to lead that opportunity.

In the latest event of an ongoing series of robotics executive panel discussions, the Pittsburgh Robotics Network (PRN) hosted three leaders of local healthcare robotics firms at Slate Studio in the Strip District. It marked the first follow up to the organization’s event on the state of the autonomous vehicle industry in April, and marks an overall uptick in events from the org, according to Executive Director Joel Reed, who moderated the panel.

The three companies and leaders included in the panel were Omnicell VP of Robotics and Automation Doug Descalzi, ST Engineering Aethon CEO Peter Seiff, and Humotech President and CEO Josh Caputo. The firms operate in robotics-driven medication management, autonomous mobile service robots for hospitals, and wearable machines for patients in need of prostheses, orthotics, exoskeletons and more, respectively.

Nearly one year after PRN hosted a summit to declare Pittsburgh the “robotics capital of the world,” Reed said that there’s still work to be done in reinforcing the industry’s community locally: “This [event] series is set up to introduce you to leaders in the robotics community.”

The panelists discussed their early business strategies, ongoing sales tactics and challenges in navigating the red tape of healthcare. Here are some of the highlights from the conversation.

Selling robots in healthcare is different from selling robots in any other industry

The healthcare industry is notorious for its tight budgets and regulatory systems. That means that selling a product to a hospital will involve negotiating with administrators about budgets that already have limited wiggle room, competing with other needs already listed on the budget, and ensuring the product itself is approved by industry regulators and insurance companies for proper rollout and reimbursement.

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In other words, it’s one of the hardest industries to work in for a salesperson, and especially for a salesperson of a high-tech, difficult-to-understand robotics product. That’s what each of the executives present at PRN’s event face on a daily basis, and it’s at the heart of an industry ovefrlap that Pittsburgh has a unique advantage in: robotics and healthcare.

“Nobody wakes up and wants to buy a robot,” Seiff said of budget administrators and purchasers in the healthcare industry. He explained further that those officials typically have a long list of priorities on their mind before they even consider what incorporating a robot into a hospital would look like. That means salespeople and robotics firms have a long list of challenges to overcome to get their product out on the market.

So Seiff, like the other two executives on the panel, went in through a side door. Aethon works with industrial building firms to incorporate its autonomous mobile robots into the building system, so that any hospital building purchases or renovations will seamlessly include Aethon’s products. Similarly, Descalzi detailed how Omnicell works around these challenges by offering its products as a service, pushing to demonstrate decreases in operating costs for hospitals rather than trying to squeeze into the capital budget.

With high-tech, complex products in a challenging industry, how do you begin to get started?

Descalzi shared that the long history of Omnicell, which is the latest name of a decades-old company that started as Pittsburgh-based Automated Healthcare (where Seiff also once worked), wasn’t defined by any single “moment of brilliance,” but instead years of dogged work toward developing a viable commercial product.

“There was a struggle and a sort of unwavering commitment to achieve what needed to be done with the technology to see the light of day,” he said. And much of that toiling happened under the radar.

Caputo only launched Humotech in the spring of 2015, and openly acknowledged that he and his team are in the midst of the toiling Descalzi described. While the startup’s been lucky enough to secure some clinical trials contracts with the United States Department of Veterans Affairs for its wearables, Caputo said the industry is still so new compared to other realms of robotics that it “feels like the Wild West.” He’ll look to forge a path into healthcare much like the other panelists did for their breakthrough tech.

Robots are big updates for the healthcare industry. How ready are people for that paradigm shift?

“The people who are using our products are demanding it,” Caputo said of Humotech’s wearable machines for prostheses, orthotics and exoskeleton patients. Direct customer feedback has shown that patient dissatisfaction with current solutions is really high, he said, and leaders in the field that Humotech speaks to agree that there’s a need for a paradigm shift. Yet, rigid insurance policies and other red tape persist in standing in the way for now.

“We’ve had to build a different kind of company that can sustain itself while that kind of change can occur,” Caputo said.

Descalzi said that his company’s customers have gotten bigger in size and fewer in number in recent years, prompting Omnicell to look for more partnership or acquisition opportunities among its peers. He pointed to a statistic that while the number of doctors and other physicians in the United States has increased at a relatively steady rate since the late 20th century, the number of healthcare administrators and regulators has “exploded.” That leads to higher costs and increase inefficiencies in healthcare — problems that tech could solve.

“We need tech to play bigger and bigger roles [in healthcare] he said,” noting that problem will become more urgent with the shrinking labor market in the national economy.


Sophie Burkholder is a 2021-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Heinz Endowments. -30-
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