On The Healthcare CEO Show, we’re delving into the fascinating journey of Paul Herchman, President and CEO of WJH Health. He’s a seasoned entrepreneur whose keen understanding of market needs propelled him into the healthcare sector.
Growing up in an entrepreneurial family, Paul Herchman was no stranger to the nuances of innovation. He seized a unique opportunity to bridge a crucial gap in healthcare by introducing cutting-edge technologies that catered directly to physicians’ needs. Let’s explore the milestones of Paul’s career, his strategic insights, and the enduring impact of his entrepreneurial spirit on the healthcare industry.
A Healthcare CEO’s Start in the Industry
Paul Herchman’s journey into the healthcare industry was driven by his entrepreneurial spirit and a keen understanding of market needs. Coming from an entrepreneurial family, he recognized the potential for innovation and saw an opportunity to fulfill a specific need in healthcare. His initial foray into the industry involved introducing new technologies to physicians based on their expressed requirements and preferences.
Finding Success Before Leadership
In 1994, Paul Herchman led Medical Alliance, which ranked 317 overall in the US and was one of the fastest-growing companies at the time. Medical Alliance was at the forefront of providing new technologies to physicians, addressing the rapid changes in medicine.
Addressing Physician Uncertainty
- Physicians faced uncertainty regarding adopting new technologies, including treatment options and drugs.
- Medical Alliance played a crucial role in helping physicians overcome the adoption curve by making new technologies available to perform procedures.
A Shift in Surgical Settings
During this time, there was a significant push to transition procedures from hospitals to surgery centers and office-based settings. Medical Alliance was at the forefront of this shift, aiming to move procedures from operating rooms to office-based surgical settings.
Medical Alliance experienced rapid and profitable growth, aligning with market demands and investor interests, making it an ideal candidate for an IPO. The company’s ability to quickly establish a strong foothold in the market and deliver consistent profitability made it an attractive prospect for public investment.
Navigating a Financial Crisis as a Healthcare CEO
After the successful sale of Medical Alliance, Paul Herchman encountered the challenges of the 2008 financial crisis. Despite the economic turmoil, he recognized a promising trend in the aesthetic industry.
At that time, cosmetic surgeons and dermatologists dominated the aesthetic procedures market. However, Herchman and his team identified an opportunity for non-plastic surgeons and dermatologists to enter the market, leading to the development of med spas.
Paul Herchman’s inspiration for starting Medsurg in 2003 stemmed from the vision of enabling physicians to expand their services by providing aesthetic procedures in their offices. The focus was selling technology to physicians and assisting them in establishing and operating new businesses. Medsurg aimed to facilitate the seamless integration of technology into medical practices and ensure the profitable operation of new ventures.
In 2012, Herchman founded Thermi, a pivotal venture in his career. The company’s journey was marked by a significant achievement: It was eventually sold for approximately $82 million. This remarkable success was preceded by a period of both triumphs and setbacks, with Paul drawing invaluable lessons from every experience.
Successful Exit Strategies for Healthcare CEOs
Paul Herchman’s journey with Thermi culminated in a successful exit. This experience provided valuable insights into the strategic decisions and approaches that contributed to the company’s achievement. Several key learnings emerged, shaping the trajectory of future endeavors in the healthcare industry.
Strategic Capitalization
- Recognizing the challenges of raising traditional venture capital for an early-stage startup, Herchman strategically sought capital from potential customers, including plastic surgeons, dermatologists, and facial plastic surgeons.
- This unique approach provided essential financial support and cultivated a sense of ownership and commitment among the investors, leading to a more symbiotic relationship between the company and its stakeholders.
Customer-Centric Approach
By involving potential customers in the company’s capitalization, Thermi fostered a customer-centric approach, ensuring that the technology being developed aligned closely with the needs and preferences of the target market.
Enthusiastic Involvement
The enthusiastic involvement of plastic surgeons, dermatologists, and facial plastic surgeons provided financial backing and infused the company with a deep sense of enthusiasm and dedication, further propelling its success.
Drawing from his extensive experience and successful exit from Thermi, Herchman is now actively assisting physician practices in navigating their exit strategies. Recognizing the concerns and aspirations of healthcare practitioners, Herchman offers invaluable guidance on preparing for a seamless transition and maximizing the value of their practices.
One of the most consistent mistakes observed among physicians seeking an exit strategy is the need for a concrete plan in place. With a well-defined plan, achieving a successful liquidity event becomes manageable. Physicians must clearly outline their objectives, understand their desired outcomes, and prepare their business accordingly. This involves ensuring that the assets potential buyers seek are readily available, validated, and easily transferable. Developing a strategic plan and working towards it daily is crucial in avoiding the pitfalls of an unplanned exit.
Facing Challenges as a Healthcare CEO
Amid the unprecedented challenges of 2020, healthcare leaders have encountered significant hurdles that have tested their resilience and adaptability. The following are some of the critical challenges that have been consistently observed:
Disruption of Aesthetic Elective Procedures
- Halting of procedures
- Market changes and access limitations
- Uncertainty in patient return
The disruption in aesthetic elective procedures has posed a substantial challenge, leading to a pause in treatments and procedures. This has been further exacerbated by the changing market dynamics and limited access to surgical settings, causing uncertainty regarding the timeline for patient return.
Capitalizing on Industry Changes
- Adapting to turmoil
- Finding opportunities amidst change
- Turning challenges into solutions
The evolving landscape has prompted healthcare leaders to navigate the complexities of industry changes and capitalize on emerging opportunities. Amidst the turmoil, there is a concerted effort to identify solutions and pivot strategies to address the shifting needs of organizations and customers.
Strategic Approaches for Healthcare CEOs
Amid the accelerated implementation timelines and evolving market dynamics, CEOs facing challenges in decision-making and pivoting can benefit from strategic approaches to navigate the current landscape effectively.
Embrace Agility
Adopt an agile mindset to swiftly respond to changing market demands and technological advancements. Flexibility and adaptability are vital in making informed decisions and pivoting strategies to meet evolving customer needs.
Leverage Technology Solutions
Utilize technology as an enabler for rapid implementation and streamlined operations. Embracing innovative solutions can facilitate efficient decision-making processes and enhance the ability to pivot strategies effectively.
Empower Sales Teams
Empower sales teams with the necessary support and resources to navigate the challenges of selling new technologies in a neutral market. Comprehensive training and persuasive tools can bolster their effectiveness in driving sales amidst industry shifts.
Innovative Startups for Healthcare CEOs
He is currently involved with several exciting startups poised to make significant advancements in medical and aesthetic fields.
Ideal Implant
- Unique breast implant
- Great PMA FDA approvals
- 10-year data
Paul is actively engaged with Ideal Implant, a company pioneering a unique breast implant with exceptional PMA FDA approvals and robust 10-year data. This innovative product is poised to become a preferred choice for women seeking breast implants, reflecting Paul’s enthusiasm for its potential impact.
Holographic Imaging for Cosmetic Procedures
- Visualizing 3D image transformations
- Enhanced patient experience
Paul’s involvement in holographic imaging represents a forward-thinking approach to cosmetic procedures. By utilizing 3D imaging technologies, patients can visualize their potential transformations, enhancing their understanding and experience and revolutionizing how cosmetic procedures are communicated and perceived.
Dominion Aesthetic Technologies
- Laser with robotic arm
- Fat destruction (apoptosis)
Working with Dominion Aesthetic Technologies, Paul is contributing to advancing aesthetic procedures through a laser equipped with a robotic arm that induces apoptosis, destroying fat. This innovative approach holds significant promise in the aesthetic industry, reflecting Paul’s keen interest in cutting-edge technologies.
Orgenics
- New grafting technology for hair transplants
- Innovative laser solutions
Paul’s involvement with Orgenics underscores his commitment to pioneering advancements in medical procedures. The company’s introduction of new grafting technology for hair transplants and innovative laser solutions signifies a transformative shift in the field of hair restoration, aligning with Paul’s vision for impactful healthcare innovation.
Valuable Insights From a Healthcare CEO
Throughout his entrepreneurial journey, Herchman has gleaned invaluable insights that have shaped his approach to business and leadership. These lessons serve as guiding principles, offering profound wisdom for aspiring entrepreneurs and seasoned executives navigating the dynamic landscape of the healthcare industry.
The Power of Adaptability
Embracing the concept of adaptability, Herchman recognized the significance of navigating unforeseen challenges and leveraging them as opportunities for growth. The ability to pivot course in response to external factors ensured the company’s resilience and led to the discovery of more favorable paths, ultimately contributing to its success.
Humility and Acknowledgment
- Recognizing external factors
- Embracing the value of collaboration
- Cultivating gratitude for support
Herchman’s journey underscored the importance of acknowledging external influences and the role of luck in achieving success. This realization instilled a sense of humility and gratitude, emphasizing the significance of collaboration and the contributions of others in the entrepreneurial endeavor.
Resilience and Perseverance
Amidst the ebbs and flows of entrepreneurship, his journey epitomized the resilience and tenacity required to weather setbacks and propel forward. Embracing the principles of persistence and unwavering determination, he demonstrated the capacity to overcome adversities and attain remarkable accomplishments.
