An exclusive Tech Tribune Q&A with Bill Kerr, M.D. (co-founder and CEO) of Avalon Healthcare Solutions, which was honored in our:
Tell us the origin story of Avalon – what problem were you trying to solve and why?
The science of lab testing continues to explode. The pandemic shined a bright light on how challenging it is to understand laboratory testing – what test, who can perform it, what price should be paid, what do you do with that result, etc. We understood 10 years ago that this challenge must be addressed if the promise of lab testing is to be realized, and that promise is enormous.
It has been understood for decades that 70% of clinical decisions involve a lab test. If the right test is not ordered, or the result is not understood, the patient receives the wrong diagnosis. When that happens, all other treatment plans, care plans, and population health support programs are not supporting the right treatment. No other portion of the healthcare dollar is so highly impactful – 10% of the medical spend affects whether every other dollar spent is having a positive impact.
This opportunity to leverage the exploding science of lab testing to improve clinical outcomes led to Avalon Healthcare Solutions, which I co-founded in 2013. Avalon is the world’s first lab insights company that generates actionable lab-driven data in real time to proactively ensure appropriate care and enhance clinical outcomes. We started Avalon because lab testing is the gateway for appropriate diagnosis and treatment care planning, and it certainly impacts the goal of achieving value-based care in this country.
What was the biggest hurdle you encountered in your journey?
While we faced challenges common to all startup companies, healthcare innovation can be slow. It is estimated that it takes 17 years for new evidence-based care to be fully deployed into the healthcare ecosystem. This is not acceptable. To accelerate the adoption of appropriate lab testing, we followed the money trail by developing products that target the payers and affect coverage and payment decisions. While this is proving effective in the rate of deployment of Avalon’s programs, laboratories that generate revenue from outdated testing or testing not appropriate to the situation have generated stout resistance.
Another challenge is the explosion in what we can test in the body. It goes beyond genetics, which receives a lot of attention, as we can also now break down more chemical components, stain tissues differently, and much more. All this innovation needs to be sorted out by the healthcare industry. It’s comparable to the disruption in radiology in the 1990s, when innovation in PET, MRI, and CT scanning required education on how and when to use the testing technology.
Avalon’s solutions address the fact that increasing lab testing capabilities is increasing waste in the healthcare system. Consider that 10 to 12% of lab units “stuffed” into testing panels provide no useful information on diagnosing or treating a patient. This phenomenon of panel stuffing is pervasive and is common in routine testing, such as thyroid and Vitamin D panels. CMS also recently highlighted this challenge in COVID-related testing, where additional tests may be bundled into the COVID-19 test.
What does the future hold for Avalon?
Avalon will continue to disrupt care delivery based on how lab tests are ordered, approved, and paid for. We are deploying new products to improve the quality of genetic testing available and to address areas of under-testing and misuse of the results.
For example, Avalon’s Lab Values Management (LVM) solution offers a revolutionary way to identify patients with early disease and therefore better inform care. LVM analyzes lab trends over time by digitizing lab values data in real time, applying algorithms, and creating actionable insight (such as identifying patients earlier with chronic kidney disease) for health plans and physicians.
In addition, Avalon is identifying patterns of under-testing in select cancer diagnoses where treatment decisions may be enhanced with additional testing. LVM’s ability to harness data is changing how care is delivered and positively impacting healthcare costs.
With more than 37 million lives covered by Avalon, we are focused on bringing together the management of lab results at scale and gaining insight into testing trends. We can show where lab tests are not being utilized (and should be) and where lab results are not being used correctly to inform care. It’s another way Avalon is creating disruption that will advance appropriate testing and truly move us toward value-based care.
What are your thoughts on the local tech startup scene in Tampa?
Tampa’s history as a technology startup area combined with the strong emphasis on healthcare makes it perfect for healthcare IT startups. We also have the advantages of a highly desirable climate, affordable cost of living, and an excellent airport – all key requirements for a growing company. This is the reason more and more seasoned healthcare entrepreneurs move to this area every year.
What’s your best advice for aspiring entrepreneurs?
- Get started, because it will take longer than you think, so don’t wait.
- Raise more cash than you need. You will need it.
- Hire help fast. You do not want to be the rate-limiting step.
- Stay focused, which means saying no to opportunities that present themselves that are not a fit. Do not chase tangential products or clients with the wrong needs.
- Make decisions. Indecision slows down progress, and time works against an early-stage company. It’s better to move quickly with unknowns than to overanalyze.
- Hydrate, eat well, and get sleep. It is a marathon, not a sprint.