Pilot Purgatory: Why 70% of MedTech Pilots Never Convert
- Chris St-Amour
- May 6
- 6 min read
Updated: Oct 20
The Hidden Graveyard of MedTech Innovation
Regulatory clearance. Clinical validation. A few promising pilots.
It feels like momentum — until it isn’t.
Nearly 70% of MedTech and digital health pilots never convert to paid contracts. They stall in a limbo we call Pilot Purgatory: proof without revenue, interest without adoption, champions without contracts.
For founders, Pilot Purgatory isn’t just frustrating. It’s existential. Every delayed conversion drains capital, credibility, and investor patience. Months slip into quarters, and quarters slip into years — while competitors catch up and early believers lose steam.
Why Pilots Stall: The Systemic Traps
If most MedTech founders are honest, they’ve been here before: a pilot runs smoothly, clinicians rave, the science is validated — and then nothing. Months pass, momentum fades, and the contract never comes.
This isn’t bad luck. It’s systemic. Pilots stall for predictable reasons:
1. The Champion Mirage
A clinical champion can open doors, but they rarely close them. With nearly 75% of physicians now employed by consolidated health systems, their ability to push a deal through complex purchasing processes has eroded.
Think of them like Michelin-star chefs — brilliant at their craft, but not trained to negotiate with supply chain, finance, IT, or Value Analysis Committees (VACs). Yet too many startups make the mistake of relying on doctors as their “lead blocker.” Champions get you 30% of the way. The other 70% belongs to an entirely different cast of stakeholders.
2. The Missing Multi-Thread
Hospitals buy by committee. And those committees are diverse:
Supply Chain worries about vendor stability, contract compliance, and reliable inventory.
Finance demands ROI, TCO, and proof that the hospital will make money.
IT & Security scrutinize integration, interoperability, and cyber risk.
Compliance & Risk Management assess accreditation and liability.
Nursing & Education care about workflow disruption, training time, and staff retention.
Each group views your technology through a different lens. If you’re not engaging them early — with tailored messaging that speaks their language — your pilot will die of neglect long before it dies of objection.
3. Misaligned GTM Strategy
Founders often mistake user enthusiasm for buying power. But the real buyers, finance, supply chain, VACs, want one thing: budget, ROI, and risk.
Winning strategies align with the Triple Aim (or Quadruple, depending on which consultant you ask):
Cost Reduction — demonstrably lowering the total cost of care.
Operational Efficiency — improving throughput, staff time, OR minutes, or bed turnover.
Patient Experience & Outcomes — lifting HCAHPS scores, reducing readmissions, or lowering infection rates.
Staff Retention — easing workload and improving safety to keep clinicians from burning out.
If your technology doesn’t map to these priorities, clinical enthusiasm will evaporate the moment your champion hits a budgeting meeting.
4. Weak or Missing Business Case
Regulatory approval proves safety and efficacy. But for VACs and payers, that’s table stakes. What they want is a business case — and most pilots don’t deliver one.
Economic Impact: quantified savings, efficiency gains, or new revenue streams.
Real-World Evidence: not just RCTs, but usage data that proves it works in messy practice.
Immediate ROI: ideally 6–12 months, rarely more than 1–2 years.
Reimbursement Alignment: clarity on coding, coverage, and payment — not just a 510(k) that signals “no better than existing.”
Risk of Inaction: the monthly exposure if the hospital doesn’t act.
Without this, even “better science” stalls.
5. Operational Friction
Hospitals are change-resistant organisms. Even great products fail if they add friction:
Workflow disruption that burdens frontline staff.
IT integration hurdles or failed security audits.
Training gaps that slow adoption.
Logistical bottlenecks, from sterile processing delays to device availability.
Successful adoption means showing how your product can slot into existing workflows with minimal disruption — and often identifying internal “super-users” who champion change from within.
6. Budget & Procurement Realities
Here’s the blunt truth: even a successful pilot won’t convert if no budget has been allocated. If there isn’t a funded line item, procurement simply can’t purchase.
Hospitals run on strict fiscal cycles. Submitting a proposal out-of-cycle, or for an unbudgeted item, is a recipe for rejection. Even worse, many are locked into Group Purchasing Organization (GPO) contracts that block new entrants unless the value is undeniable.
Procurement teams don’t optimize for innovation; they optimize for risk reduction, standardization, and predictable cost. That means bundled pricing, service agreements, or leasing models often carry more weight than “better science.”
The Bottom Line
Pilots don’t stall because the science is weak. They stall because the business case, stakeholder strategy, and operational fit aren’t strong enough to survive the hospital buying system.
Until founders accept this reality — and design pilots with conversion, not validation, in mind — Pilot Purgatory will remain the graveyard of MedTech momentum.
The Cost of Waiting
If Pilot Purgatory has one defining feature, it’s time. Deals don’t usually collapse overnight — they wither under the weight of slow-moving hospital processes, mismatched expectations, and mounting investor pressure.
Protracted Timelines and the Illusion of Quick Wins
Most founders underestimate the grind. Even when everything goes right, the journey from pilot interest to paid adoption is measured in months — not weeks.
Pilot qualification and due diligence (technical fit, site readiness, InfoSec clearance): 1–3 months.
Value Analysis Committee (VAC) reviews and procurement cycles: 2–6 months.
Conversion from pilot to contract: another 2–9 months.
Stack these together and even best-case timelines are 6–12 months. For academic centers, 12–18 months is more common. And without strong preparation, approval rates are as low as 3–5%.
Reimbursement adds another marathon layer. New pathways that require fresh coding and coverage can take an average of 4–5 years to stabilize. Even with FDA “Breakthrough Device” designation, coverage under the TCET pathway still hinges on rapid evidence planning — and delays here can derail momentum.
Erosion of Momentum and Investor Patience
Time erodes momentum. Every month without progress makes approval less likely.
Champion fatigue: Doctors may open doors, but with 75% now employed by health systems, their influence stops at enthusiasm. Without administrative and financial traction, they grow frustrated.
Operational drag: Overlooked staff — radiology techs, surgical schedulers, educators — can quietly stall adoption if the new process adds work or risk.
Investor skepticism: A decade ago, investors asked about FDA status. Now, the first question is: “How are you going to get paid?” Without a reimbursement pathway and clear time-to-revenue, capital dries up. Post-launch, 90% of MedTech risk is commercialization risk — and investors know it.
Some estimate lost conversions can bleed away 25% of top-line revenue for early-stage companies. That’s not just frustrating — it’s existential.
Misreading the Signals
When pilots stall, founders often assume they need more clinical data, a bigger trial, or another high-profile hire. But the problem is structural misalignment:
FDA ≠ payer evidence: The data you submit for clearance rarely overlaps with what payers or VACs require. They want proof of cost savings, improved outcomes versus standard of care, and clear ROI.
VAC mandate: These committees are designed to minimize risk and enforce standardization, not reward innovation. Budget misalignment, IT integration hurdles, vendor consolidation, or competing priorities often kill adoption even when clinicians are supportive.
Strategic blind spots: Hospitals don’t fund “better science” — they fund solutions tied to their strategic priorities: cost reduction, quality improvement, throughput, staff retention.
The “who pays” gap: Too many pilots launch without identifying which budget owner will fund the expansion. Procurement expects a clean handoff — success metrics hit, budget pre-aligned, purchase ready to execute. Anything less means waiting another fiscal year.
The brutal truth: in Pilot Purgatory, every delay compounds risk. Enthusiasm fades. Champions lose influence. Investors lose patience. And what looked like early momentum becomes capital burned without revenue.
Escaping Pilot Purgatory: What Works
Pilots don’t have to stall. The companies that escape treat them not as tests, but as on-ramps to adoption.
Multi-thread early: Don’t rely on a single champion. The best companies engage supply chain, finance, IT, and nursing before the pilot starts.
Tell the economic story: A 60-second business case beats a 60-page deck. C-suites want ROI, risk reduction, and alignment with system goals.
Design for conversion: Define success upfront, tie it to hospital priorities, and set a clear time-to-value.
Align with strategy: Hospitals fund what advances their top priorities — cost reduction, throughput, staff retention, and quality.
Build reimbursement in: Coding is not coverage. Coverage is not payment. Companies that win start market access planning as early as R&D.
The playbook is clear — but executing it takes discipline. Most companies miss one or more of these steps and stall.
👉 That’s why we built the Pilot Conversion Handbook — a tactical guide for founders who want to go deeper, with the frameworks, metrics, and templates to turn pilots into paid contracts.
From Pilot to Paid
Pilot Purgatory isn’t inevitable. But escaping it requires founders to shift their mindset:
From proof to purchase
From champions to coalitions
From clinical value to economic ROI
From pilots as tests to pilots as contracts-in-progress
MedTech is full of great science. The companies that win are the ones who master the messy middle — the commercialization gap where most stumble.
At Pathova, we exist to help founders do just that: move from Pilot-to-Paid.
👇It all starts with a free diagnostic. Book your call here 👇
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