In today’s dynamic, innovation-driven healthcare environment, the ability to recruit and retain top talent, and build winning leadership teams, has never been more critical. We sat down with Michael Frank, client partner and coleader of the healthcare practice at Klein Hersh, to talk about the evolution of patient care, the forces fueling expansive growth in this industry, and what’s next on the horizon.
Let’s begin with an overview of the healthcare practice at Klein Hersh.
Michael Frank (MF): It’s important to start with who we serve. Our clients include healthcare-focused venture capital (VC) and private equity (PE) firms, and healthcare technology and services businesses developing software, medical devices, and other digital solutions that are transforming patient care. We work with these organizations, and directly with payers and providers as well, to recruit top talent and build successful leadership teams. Generally, we’re brought in by the VC and PE firms funding these organizations, which can range from Series A, to PE-sponsored companies, to those preparing for an IPO. We cover a broad gamut of executive searches, including chief executive officer, chief financial officer, chief technology officer, chief marketing officer, chief commercial officer, and general counsel, among others. Like every practice area across Klein Hersh, we have subject matter experts on our team who support specific functional areas.
When was the healthcare practice introduced and why was that the right time?
(MF): We launched the healthcare practice in 2010. I worked alongside my closest colleague and healthcare practice cofounder Mike Leonard to build it from the ground up. It was at the time when electronic medical records (EMRs) were becoming hot, and the Klein Hersh managing partners could see this was the start of something bigger―what would become the digital health industry. I feel privileged to have seen this space in its simplest form and as it’s evolved into having a major impact on our daily healthcare interactions. When we look at the historical trajectory of funding inside of the digital health space from 2010 until now, it’s increased significantly. So, we were definitely ahead of the curve relative to the investment dollars. Early on, it was clear to us this was a parallel practice to our pharma technology practice. Through serving clients in the pharma tech market, we could see this was an area getting attention, and we knew it was a congruent industry for us to expand into. More recently, given the advent of so much EMR data, our healthcare practice has been working more closely with the pharma tech and biotech practices at Klein Hersh. Essentially, all of the data now available can now be leveraged in numerous ways to help with drug development. It’s really interesting to collaborate on all of that.
How does the healthcare practice fit within the Klein Hersh landscape?
(MF): I think this area is the future. Relative to the other practice areas across Klein Hersh, in terms of development, we still have a lot of opportunity to grow―to increase our capacity for searches in this space through additional hires, and by maximizing our contacts and relationships in the industry. We have incredible reach, but there is still significantly more we can do. The market is continuing to mature; money and investments continue to come in. We’re seeing a lot of transactions at the highest level―CVS acquiring Signify Health, Amazon taking a strong stance in the marketplace, and Apple looking to offer health insurance in 2024. These are positive signs for our industry as a whole. And the fact that high tech has taken a liking to digital health is a huge positive. Klein Hersh already has deep market saturation in the biotech community, and our digital health and healthcare services practice will continue to see incredible growth opportunities.
How is the healthcare practice structured?
(MF): There are five of us in this area now, and we’re continuing to build out our team. We’re set up similarly to the firm’s pharmaceutical practice, in that we have subject matter experts who are laser-focused in specific areas and able to establish deep relationships in the candidate community.
What is your role as cofounder and coleader of this practice area?
(MF): My responsibility, above all, is to deliver of a great experience for our clients. My goal is to bring together the smartest people in the communities we serve to create companies that are going to change the landscape of healthcare. It gives me great pride to be part of that. As it relates to being a leader, there’s my own personal reputation and the company’s reputation―I’m responsible for both. I’m also responsible for the digital health team’s reputation. So, ensuring we do what we say we’re going to do is paramount. And ensuring we act with transparency, that we are always thinking about our character, and operating with best intentions for our clients. And then ultimately, it’s about giving back to the folks on our team. There’s an important fact about our company―we train newer hires and give back to them the same way those before us trained us, to make sure we had the level of command, knowledge, and experience in the marketplace we needed. I see that as an incredibly important responsibility. I also want to say that as much as Mike Leonard and I are considered leaders, we’re really just the more tenured individuals in the group. Klein Hersh doesn’t operate at all like a hierarchy. We’re a flat organization. We’re all accountable to each other. That’s what I’m trying to teach some of the younger folks.
How has the healthcare industry, and your work within it, evolved over the years?
(MF): The industry has grown a lot since we launched this practice in 2010, and even more so over just the last three or four years. First and foremost, healthcare has become more mainstream. We’re seeing the struggle in our ability as a country to control the cost and the quality of healthcare. By popular demand, people are becoming more mission oriented. Instead of starting a financial tech company, they’d rather start a healthcare company and do something meaningful. You’re seeing people who initially wanted to get into investment banking get into the healthcare industry. One of the most substantial shifts in recent years is that we’re now looking at the patient as more of a consumer. As patients, we have more control and more choices than ever before, and it’s increasing competition. Ten years ago, people went to their doctor, waited an hour for their appointment, and drove home or back to work. Now everyone is searching for a better experience. So, we’re seeing more professionals coming from outside of the healthcare industry, executives who possess a deep understanding of business to consumer, who can bring this focus to healthcare. And we’re seeing where technology has splintered into so many different areas to provide better healthcare. Telemedicine is a great example of that. Remote patient monitoring and home services have also increased and are on the rise. Another key piece of the puzzle is government intervention and the transition toward value-based care. I hope we’ll see a more uniform approach to value-based care across government and commercial entities. Favorable government tailwinds will play a significant role in that.
What changes do you anticipate in the future?
(MF): We’ll continue see patient satisfaction and patient experience driving the future of healthcare. I think one of the key drivers to the advancement of digital health will be the improved use of cell phones by both patients and physicians. We’ll see a growing network of wearable devices, monitors, and integrated applications that provide real time data, such as a smart inhaler that syncs patient usage with a mobile app. One of the newer concepts is the use of wellness apps by employers, and I expect that trend to grow exponentially. Technology is also making way for the use of virtual reality (VR) in surgical training and planning, as well as for chronic pain management and mental health. The annual growth rate of VR is projected at nearly 31 percent through 2025. Overall, I think data will be leveraged more efficiently in the future. We’re still in the early phases of how data can be utilized to identify new therapies and even determine how to prevent diseases like diabetes or dementia or heart disease. I think we’re on the front end of solving areas of healthcare we still don’t fully understand, like Alzheimer’s. With data and the digitization of healthcare and medical devices, we’ll be able to find solutions for a lot of big problems.
What enables Klein Hersh to excel in recruiting top talent in this industry?
(MF): The reason why companies partner with us is because of our deep subject matter expertise. It’s much more than bringing talent to your organization; we’re in the middle of this entire community. We’re speaking to all the VC and PE firms, all the executives, all the candidates. We’re essentially the link. So, the knowledge we possess is invaluable. And it allows us to understand what “good” looks like, which I think is a very underrated skill. Furthermore, we carry a significant amount of credibility when we reach out to the candidate community, who are also looking to improve healthcare. We’re viewed as trusted consultants. We’re connecting the brightest people together on a focused mission. We lean in to understand the DNA of our clients’ organizations, and we marry that back to the candidate community. So, it goes beyond the hard skills. I love the scientific side of what we do, but we also have the responsibility to match soft skills, create congruency, and bring people together to solve big problems. That’s what we do so well―matching those characteristics and personalities.
Tell us what you enjoy about your work.
(MF): Every day, I get to talk to so many different people in this industry who have such incredible talent, who are mission focused, and have so many goals they want to achieve for the healthcare community. I feel privileged to work with these people, to learn from them, to help unlock their imagination, and to be able to create an environment where they can be successful. There is so much change occurring in the healthcare industry―it’s a really interesting and exciting time. I love learning about the new and innovative areas popping up. And I get to make help make those organizations successful.
What achievements are you most proud of since the inception of the healthcare practice area at Klein Hersh?
(MF): I’m really proud of what Mike Leonard and I have been able to build together. I always knew the healthcare practice was destined to break through, that we had the talent, the drive, the skills, and the capability to get to the level where we are. Back in 2010, we were just figuring out the identity of this practice. Over the years, we’ve continued to learn and study our craft, and we have truly become part of this community at the highest level. We’re now viewed as peers by some of the smartest people in the healthcare community―the same people I always looked up to. From a personal standpoint, that’s what I’m most proud of. I feel privileged to be a part of everything the healthcare community is striving for.