Episode 2: Why Healthcare Innovation Needs Investors Who Actually Understand Implementation
Welcome to Episode 2 of the Ardexia Podcast where we speak to leaders, clinicians and advocates for better healthcare. This week, we talk to Dr. John Dayton, an emergency physician who co-led one of the first academic-private incubators at Stanford and now advises Intermountain Ventures while raising a healthcare innovation venture fund.
Healthcare organizations spend millions on digital health innovations that never get adopted. Not because the technology doesn't work—because nobody asks the physicians who'll actually use it what they need. In this episode, I sat down with Dr. John R. Dayton to explore the critical gap between pilot success and real-world adoption, and what separates healthcare innovations that scale from those that fail at 20%.
The conversation revealed something every healthcare leader and investor needs to understand: impressive technology doesn't guarantee adoption. Implementation strategy does.
The Academic-Industry Bridge Nobody's Building Right
Stanford's ER incubator was designed to bridge a gap: startups got high-level physician feedback and regulatory data while the hospital evaluated modern solutions. But Dr. Dayton observed a persistent pattern: "Even when you have everyone saying this is a common goal and you have a champion for research, there's still red tape that can delay or prevent adoption."
This reveals the fundamental challenge. Adoption failure isn't one problem. It's an ecosystem of barriers including technical integration, regulatory approval, economic validation, and cultural change management. Alignment isn't enough. You need systems designed for implementation from day one.
AI in Emergency Medicine: What Actually Works
When evaluating AI applications, Dr. Dayton makes a critical distinction: tools that outperform medical students on tests generate headlines. But the AI actually achieving adoption solves unglamorous problems exceptionally well.
His example? Open Evidence for personalized discharge instructions. "A lot of the ones we have are so broad they're almost unhelpful. With Open Evidence, I can customize it by the patient's reading level or language."
Why does it work? It saves time, integrates with workflow, solves a pain point, shows sources to avoid hallucinations, and improves outcomes. Compare this to AI requiring separate logins or making unsolicited recommendations. Which one will emergency physicians actually use?
The Investment Framework Healthcare Actually Needs
Traditional venture capital evaluates the "T's": Team, Time, Technology, and Total Addressable Market. Dr. Dayton adds healthcare-specific "P's" that better predict adoption:
Property - What's the competitive moat?
Pilots - Do both physicians AND patients like it?
Publications - Has the company validated clinical efficacy?
Product clearance - What's the regulatory strategy for FDA and CMS?
"Nothing's going to move towards FDA clearance without research. Nothing's going to work economically with CMS unless you show it works AND you can provide it cheaper."
This framework explains why the 2021 digital health bubble burst. Companies raised massive capital based on impressive technology without proving clinical efficacy or economic viability.
The Three Evangelists Problem
Healthcare innovation faces a unique challenge: the end user isn't the purchaser. Dr. Dayton identified three evangelists required for successful adoption:
A physician champion who believes the tool works. An IT leader who sees technical integration as feasible. A hospital executive who views it as meeting organizational goals.
"Physicians are the end users, but we're not always the purchasers. There needs to be alignment between what the hospital says their goals are and what physicians want."
Miss any one and adoption fails, regardless of technology quality.
Why Hospital Venture Funds Matter
An encouraging trend: over 25 hospital and academic groups now operate venture funds. Organizations like Kaiser and Intermountain aren't traditional VCs seeking maximum returns. They're healthcare delivery systems investing in solutions they might actually implement.
Dr. Dayton works with Intermountain Ventures: "They're interested in AI tools that help with transformative care, hospital at home, things that make physicians' lives easier."
This creates powerful alignment. Hospital venture funds understand clinical workflow constraints, integration requirements, regulatory processes, and change management challenges. For startups: identify hospital venture funds interested in your specific problem space. That targeted alignment matters more than most founders realize.
The EHR Mistake We Cannot Repeat
Dr. Dayton drew a critical parallel: "You can contrast how EHRs were rolled out in a very clunky fashion 10 years ago. It was 'use this, this is what you're doing, we want this government benefit.'"
EHR adoption succeeded through mandates. But physician satisfaction remains low, contributing to burnout. AI adoption must be different. Successful examples like ambient scribes demonstrate what works: tools built BY physicians FOR physicians, addressing genuine pain points, integrating naturally into workflows.
The emergence of physician informaticists, Chief Innovation Officers, and AI Implementation Officers represents progress. These roles bridge the gap where most innovations fail.
The Bottom Line for Healthcare Leaders and Investors
Three principles emerge for healthcare innovation adoption:
Validate Beyond Technology - Clinical publications, pilot feedback, regulatory strategy, and economic evidence matter more than impressive demonstrations. The healthcare-specific "P's" predict adoption better than traditional VC metrics.
Align Across Stakeholders - Physician champions, IT leaders, and hospital executives must all see value. End users must be involved from day one, not after purchase decisions.
Solve Real Pain Points - The most successful innovations address unglamorous problems exceptionally well. Time-saving tools that integrate with existing workflows beat sophisticated systems requiring behavior change.
Healthcare innovation investment is evolving. Hospital venture funds bring implementation expertise traditional VCs lack. The question isn't whether we have the technology to transform healthcare. The question is whether we can build implementation strategies that move innovations from pilots to sustainable adoption at scale.About Dr. John R. Dayton
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Learn more about Dr John R. Dayton's work and follow his insights : LinkedIn | Professional Development Upskilling Document | His Fund
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Ready to transform your healthcare innovation approach? Contact Ardexia to discuss how we can help you move from pilot to sustainable adoption.
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Dr. Aditi Joshi is the CEO of Ardexia and host of the Ardexia podcast. She's an emergency physician who has built 13 digital health programs across three continents and specializes in turning failed digital health implementations into measurable clinical and financial success.