Lessons from Troy Bannister, Particle Health, on the evolving landscape of healthcare data exchange
Troy Bannister, CEO and Co-Founder of Particle Health, a user-friendly API platform shaping the new standard for healthcare data exchange.
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Welcome back to the Pear Healthcare Playbook! Every week, we’ll be getting to know trailblazing healthcare leaders and dive into building a digital health business from 0 to 1.
This week, we’re super excited to chat with Troy Bannister, CEO and Co-Founder of Particle Health, a user-friendly API platform shaping the new standard for healthcare data exchange.
Founded in 2018, Particle Health’s comprehensive API uniquely combines data from 270 million plus patients’ medical records by aggregating and unifying healthcare records from thousands of sources. With this approach providers are able to easily obtain clinical data points without complex technology integrations, putting actionable patient health data at their fingertips.
After spending 15 years in healthcare in multiple capacities: as an EMT, medical student, clinical researcher and early-stage investor, Troy found a disturbing gap in patient rights & paper processes that digital solutions could fill. Troy is incredibly optimistic about the future, particularly as it relates to legislation and emerging data standards.
Particle Health raised $25M to accelerate their platform growth from Canvas Ventures. The financing brings the organization’s total capital raised to $39M.
In this episode, we learn about Particle Health’s founding story, define healthcare data access and frameworks and the regulatory tailwinds for healthcare data access in the broader healthcare system.
Listen here on Spotify or Apple podcasts!
Troy’s journey to founding Particle Health:
“I quit my last job without a backup plan and spent a couple of weeks walking in circles in my apartment, trying to figure out what I was going to do with my life. I kept coming back to entrepreneurship. I kept coming back to the same problem that we're solving today.”
Earlier in Troy’s career, whether it was working in an ambulance, a hospital, doing clinical research, working with entrepreneurs… he encountered the same problem over and over again: nobody has access to clinical data the way that they should.
In the early days of Particle, Troy filled up his calendar with phone calls— potential customers, smart people in the field. It started with one phone call a day and built up over the next few months, allowing Troy to talk through the problem/potential solution and build a solid vision of what Particle could be. These initial relationships with folks who dealt with the core problem eventually developed into customers.
Troy shares that the thesis for Particle developed as he recognized a common pain point among all the entrepreneurs he was working with that were integrating with the same hospital. “Why is there nobody connecting all the hospitals to a single point, and the practices and the clinics and the labs and the pharmacies?”
Particle Health, the Plaid for Healthcare
From a value prop standpoint, Particle is similar to Plaid, but behind the scenes, Troy shares that it couldn’t be more different.
Plaid uses your bank login to get access to your data, meaning it’s typically more straightforward to get cloud access to your bank account information.
In healthcare, if you’re a sick person, it’s likely you’ve seen several different doctors with different portals and different passwords. HIPAA blocks your ability to request a new password for online portals, so Particle does patient matching behind the scenes to connect accounts within the bounds of HIPAA authorization. Particle Health connects directly to healthcare data sources instead of the bank.
The evolving landscape of healthcare data policy
In recent years, Troy explains that the US government has been pushing for a framework that allows access to these different data sources. The UK has the open banking rule allowing consumers the right to access their banking data. The same thing is going to happen in the US with the 21st Century Cures Act granting patients the right to their clinical data.
Within this act, the Anti-Information Blocking rule (initially proposed back in 2016) allows Particle to connect with the EMRs without forming a specific proprietary agreement between them.
Troy shares that the 21st Century Cures Act is a long time coming, given how long it takes for the healthcare industry to build safe and reliable infrastructure giving consumers data access. Proponents of the act wanted to build what fintech has built already but in healthcare
Fines will now be applicable starting on October 6 2022 for healthcare players that haven’t yet adopted this rule.
The Trusted Exchange Framework and Common Agreement (TEFCA):
The Trusted Exchange Framework and Common Agreement (TEFCA) is creating a national infrastructure for data exchange. Troy shares that info blocking fits well into this because you can give consumers access through a large network, which means all you have to do is connect to that network and then make consumers capable of accessing it— this is the tech that Particle has built with a ~92% success rate in finding patient records. On the hospital side, all that’s left to do is give consumers access to their data, but there’s complexities to that: What additional liabilities are there? What security risks are we taking? Is there certain information in the medical records that shouldn’t be shared directly with the patient?
Troy shares that Particle can rely on EMR vendors to clean up patient records, because they’re obligated to as a certified health IT developer. Under HIPAA, EMR vendors manage a certain class of clinical data (ex: mental health, substance abuse) that won’t be shared with the consumer or other doctors without special permission from a clinical intermediary. Due to these technological nuances, regulation has taken almost a decade to figure out.
Health Level Seven (HL7) and Fast Healthcare Interoperability Resources (FHIR)
HL7 is an international group creating a universal standard for healthcare data exchange. The newest standard is Fast Healthcare Interoperability Resources (FHIR) which took HL7 from XML to JSON. Every few years, HL7 issues an updated FHIR version.
FHIR is mainly two things:
1. The actual exchange modality (how you get data from an organization)
2. The standard of the data (consistent across every organization)
Troy shares that you can’t participate in TEFCA if your data can’t fit in other people’s data — this shift to a data standard has been a huge improvement since he started Particle.
“It’s the first time the healthcare industry has actually ever adopted a single standard.”
Working on Particle before the 21st Century Cures Act:
Troy believes that Particle’s mission has never changed, despite the approach, technology, and go-to-market strategy has changed a lot. Initially, Particle was going to be a blockchain company— highly secure, anonymous ledger, etc. Troy believes healthcare is not ready for blockchain applications. In early customer calls, customers were much more open to Particle as a data API, rather than working with the blockchain.
Troy was the co-lead of an IEEE committee for blockchain in healthcare. His opinion on the future of crypto in healthcare:
Troy shares that there are certain use cases that blockchain lends itself to such as consent management, which is the consent to share records differs among different states, so blockchain could contribute to the contracting component of consent management that currently happens on paper. Unfortunately, it seems the healthcare industry is not going to adopt any EMR on the blockchain any time soon.
“I think there are some use cases in which there are value adds that aren’t too much for a healthcare organization to swallow… I think there’s some, but I do not think the healthcare industry is going to adopt blockchain for complete medical record exchange anytime soon.”
Particle’s journey from MVP phase to preparing for Series C
Today, Particle has a 90% success rate and an average of 105 records per patient per search. It wasn’t always this way— to get past the cold start, they had to prove their value prop exists by standing up a basic MVP.
Troy shares the initial proof point for Particle: even without perfect coverage and depth of data, organizations were still willing to pay for 5 records per patient per search or a 30% hit rate. The key sign to product pull is when customers want the 10% version of your product. That was enough proof to push the team forward, keep investing, and keep connecting with more data sources.
“We thought even though there’s a fraction of the coverage and depth that we have, there’s still value there. What’s the value if we can get total coverage?”
Credibility was key for building the initial product and finding their first customers.
In the early days, Particle went through government certification through a group called Carequality (an interoperability framework that connects health information networks throughout the country, changing health data exchange in the U.S.). Carequality was championing new anti-information blocking rules. Troy shares that they’re still members of Carequality as well as other networking groups, which has allowed Particle to connect with EMRs.
The future of Particle Health expands beyond the EMR
Troy shares that Particle has a critical mass in EMR data. This data includes clinical records, lab results, medication lists, doctor’s notes, etc. Particle also partners with pharmacies to access 12 month medication histories and integrate ADTs, admission discharge transfer notifications. Now Particle is continuing to expand outside of EMR confines to new sources like billing claims data, genomics, and more.
“The idea is, over time, we aggregate enough data sources around a single person's identity with a single API in a single contract to get the most holistic picture of a patient possible. On top of that, we layer analytics and insights so that you don't have to parse through a million different things to understand the one question you have about the vision.”
It’s less about vision and more about metrics as you raise more and more money.
Troy describes fundraising as a spectrum that moves as you find proof points that your business will work.
Seed: Can you actually get somebody to pay for this and does it work? Can you get a 30% hit rate, and how much can you make per query?
Series A: Can you get customers to use your product and love it? Can they be solid references for you?
Series B: Can you scale this company?
Series C: What are your revenue numbers and gross margins?
The future of Particle and the healthcare data space:
When I asked Troy what was the reason why Particle succeeded and noone else had yet, Troy shares that for a business like Particle, timing is a huge component.
“What we’re doing now wasn’t possible a year ago, just because the rules weren’t the rules yet. The rules are continuing to mature, so I think the stuff we’re doing now is going to pale in comparison to the stuff we’re going to be doing a year from now.”
Troy believes that the general theme is that access to data will be commoditized relatively quickly now that the government is mandating open access. He’s predicting that a few organizations will build out coverage into all the endpoints and aggregate all the data, commoditizing that component of the businesses.
“What must happen then is there must be value added services attached to the top of that stack.”
The open whitespace:
The market is huge and open in many directions: you can go into the payer side and do risk adjustment, the pharma side and do clinical trial recruitment, the provider side and do population health…
Troy believes that no one will have a generalizable solution to fit every problem, meaning there might be a lot of winners in this space. It’s really a question of who’s building the value add services on top of the commodity as it becomes commoditized.
Troy’s advice for entrepreneurs in healthcare:
Staying mission driven will keep your team motivated through the good days and the bad days, the easy decisions and the hard decisions
Troy shares that Particle is up to around 40 employees now, and the entire journey has been a constant learning experience. As a first-time entrepreneur, every day you’re either making mistakes or learning from other people’s mistakes.
Troy believes that the mission is what brings most people to Particle— seeing how much coverage they have and how customers are using Particle to drive better health outcomes for patients.
Your business won’t blow up overnight, you have to be in it for the long haul. Healthcare is a marathon, not a sprint.
Troy shares that in healthcare, your business won’t blow up overnight and you have to be in it for the long haul. You’ll hit obstacles along the way, but keep driving towards your mission.
Every week, you will have an existential threat, and every week, you have to solve that problem and move on to the next. Troy shares that most healthcare companies deal with a constellation of challenges from regulation to long sales cycles to complex data, and learning how to keep moving forward is key.
Interested in learning more about Particle Health or joining their team? Learn more on their website, Twitter, and LinkedIn.