Digital Health Investments Hitting All-Time High

This article was originally published on Healthegy.

Digital health investments are on track to hit an all-time record in 2016, according to Katya Hancock, director of strategic partnerships at StartUp Health, who spoke at the Digital Healthcare Innovation Summit.

Year-to-date for 2016, digital health companies have raised over $6.5 billion in investments, already surpassing the $6.1 billion that was invested in the space last year.

The sector set a record in the third quarter when companies raised $2.37 billion, the most raised in a single quarter.

Total investments in digital health since 2010 have amounted to $20 billion. According to Hancock, the general consensus at StartUp Health is that digital health is still only in its early stages, and that we are far from a market bubble.

Currently, StartUp Health has 170 companies, across 26 countries, in its portfolio. The firm has an ambitious mission, “to improve the health and well being of everyone in the world,” and aims to do this by supporting and investing in entrepreneurs who hope to reinvent and transform health care.

StartUp has recently outlined 10 major moonshots that it feels will have the greatest impact on health: improving access to health care, decreasing health care costs, curing diseases, cancer, women’s health, children’s health, nutrition, brain health, mental health, and longevity. In addition, StartUp Health actively tracks 7,500 companies outside its portfolio to gain market insights into the digital health space.

Market Trends

Through its market research, the company has identified a number of interesting trends in the digital health market that are worth noting:

US and Global Growth: As mentioned previously, digital health investments are growing with year-over-year increases. In addition, international investments are increasing rapidly. Some of the largest deals are in fact happening abroad, in particular in China. Two of the largest investments, in fact, have been in China, with a seed-stage investment of $500 million in start-up Ping An Good Doctor and $448 million in Baby Tree, both based in China.

Digital Health’s “First Wave”: Digital health is still in its “first wave,” with early investments in sensors and wearables still in early stages and not yet realizing returns. A second wave is expected that may include more sophisticated sensors, which are likely to offer deeper insights and improved solutions.

An Active Investor Ecosystem: The digital health investor ecosystem is extremely diverse, with over 500 unique investors in the space, with over 140 making multiple deals in 2016.

Unique Collaborations: Stakeholders with specialized expertise are coming together for unique partner collaborations. One example is the large $500 million investment by Google and Sanofi into diabetes start-up Onduo. We can expect more of these unique partnerships going forward, aiming to bring together parties with different skillsets to tackle difficult health care challenges.

The Rise of the Rest: Finally, there is a rise of new innovation centers and hubs away from the prominent East and West Coasts to include other sites in the US and internationally. New ecosystems are attracting investors to locales previously underserved by digital health.

Most Active Subsectors

Patient/consumer experience remains the top category for funding in the digital health market, attracting $2.53 billion in investments. The next largest categories were wellness at $918 million, personalized health and quantified-self at $634 million, big data and analytics at $564 million, and medical devices at $478 million. Other categories with less funding included workflow, clinical decision support, and population health.

Most Active Therapeutic Areas

Not surprisingly, the top three therapeutic areas that receive the greatest digital health investment are cancer, mental health, and chronic disease, including diabetes. Other significant areas of funding include: cardiology, dermatology, autism, pulmonology, ophthalmology, immunology, and rare disease.

While the investments are not in drug development per se, according to Hancock, “The lines are getting blurry between digital health and the life sciences. Some companies that we thought we wouldn’t be working with, we now are.”

Top Deals

The largest investment deals were both in the patient/consumer experience category, with a $500 million investment in Ping An Good Doctor (in China) with an undisclosed investor, and $500 million in Onduo, led by Google Ventures. The next largest deals were $448 million in Baby Tree (in China), led by Matrix Partners, and $400 million in Oscar Health, led by Khosla Ventures. Other notable investments include Human Longevity, Inc., which received $220 million, led by StartUp Health; Flatiron Health, which received $175 million, led by Roche Pharma; and Clover, which received $160 million, led by Green Oaks Capital Management.

Top Investors

The most active investors in the space were Khosla Ventures and StartUp Health, both of which made 10 deals in 2016. They were followed by GE Ventures, which made nine deals, and Safeguard Scientifics, which had six deals.

Digital health has high potential for improving health outcomes, and it is expected that investments will continue to grow in the US and internationally going forward. As it is still a young market, only time will tell if returns are realized on this potential.

GV’s Approach to Healthcare Investing: An Interview with Dr. Krishna Yeshwant

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Please note:  This article was originally published on TechCrunch.com.

Healthcare investments — in particular, investments in digital health — are booming, and don’t seem to be slowing down. According to CB Insights, digital health funding hit nearly $5.8 billion in venture funding last year, surpassing the previous record of $4.3 billion in 2014.

One of the top venture firms, GV (previously known as Google Ventures), recently came out with their year in review, revealing that more than one-third of their investments are in the life sciences and healthcare. (They currently have $2.4 billion under management.) “I can think of no more important mission than to improve human health and global quality of life,” CEO Bill Maris said in a recent announcement.

One of the strengths of the GV life science and health investment team is having a diverse mix of PhDs and MDs as investors, including general partner Dr. Krishna Yeshwant. Yeshwant continues to practice internal medicine part-time at Brigham and Women’s Hospital in Boston, and credits that with helping to keep him in touch with the challenges facing healthcare.

I recently sat down with Yeshwant to talk about GV’s investment strategy.

Yeshwant started his career, interestingly, studying computer science at Stanford. From there, he helped found two tech companies, which were eventually acquired by Hewlett-Packard and Symantec. He could have successfully continued on his path in tech, but decided instead to go to medical school after his father became ill and needed a cardiac bypass. “I remember just being in the hospital thinking this is just messed up. There are so many areas for improvement,” he said.

He went on to pursue an MD-MBA at Harvard. During this time, he became involved in a lot of medical-device work, and even started a diagnostics company. This work eventually led him to work with Bill Maris at Google Ventures.

Thus far, one of GV’s largest investments has been with Flatiron Health, an oncology-focused technology company based in New York City. According to Yeshwant, the concept was developed by two former Google employees who received support from GV. “Flatiron is basically integrating EMR’s (electronic medical records) in the outpatient and hospital setting,“ said Yeshwant, “and it provides data back to physicians as well as aggregating data to aid with discovery and help with regulatory processes.”

Others have also recognized Flatiron’s enormous potential. Flatiron recently announced they received $175 million in Series C funding from Roche Pharmaceuticals. In addition to the funding, Roche plans to be a subscriber to Flatiron’s software platform. Their hope is to use the platform to identify and bring innovative treatments to market faster.

Yeshwant strongly believes in the need for more tech solutions in healthcare like Flatiron Health. “There’s a fundamental need for infrastructure. A single disease type of lung cancer is actually lots of diseases. Other more complex diseases are going to need more data sets, multisite trials, and we need to create infrastructure for that,” he said.

It’s hard to argue with him on that point. Massive amounts of biometric data are being collected in healthcare right now, but there aren’t nearly enough tools for storage, communication and analysis of that data. There’s a great deal of opportunity for healthcare startups that can specialize in data management and analysis.

Three such companies in which GV has invested in this space are Metabiota, which provides risk analytics to prevent and reduce epidemics; Zephyr Health, which uses global health data and machine learning to provide treatment insights to pharma and medical device companies; and DNAnexus, a company that helps companies store their genetic information.

“Once you’re in a world where you can scale up and down your computational analysis, you can ask lots of simultaneous questions of your aggregated data sets and that’s well suited to the cloud environment,” said Yeshwant. “We invest heavily in those spaces.”

Besides software-based companies, GV is investing in a diverse range of other types of companies in healthcare and the life sciences. One such area is the genomics space. Thus far, GV has made major investments in Editas, a CRISPR gene-editing company; 23andMe, which offers chromosomal analysis to consumers; and Foundation Medicine, a company that offers genomic analysis of various cancers.

Yeshwant also feels one of the biggest challenges (and opportunities) in healthcare is helping healthcare organizations shift from fee-for-service to fee-for-value. “That’s the direction we’re going,” he said. “How do we migrate big systems in that direction? That’s the fundamental question.”

GV therefore has made some significant investments in companies that are shaking up the traditional provider model, including the telemedicine company Doctor on Demand and the innovative primary care provider, One Medical Group. “Anything you can do to move healthcare from a high cost setting to a low cost setting is generally going to be successful in that model,” said Yeshwant. “Telemedicine is a good example of that. We have a company called Spruce Health which is essentially asynchronous care. Value based care is a big area for us.” (Spruce Health is a platform for dermatologic care.)

Yeshwant hinted that future projects may be in the areas of population health and chronic disease management, investment in companies that engage consumers directly and possibly even some work in women’s health. One thing’s for sure: We can expect more exciting things to come in 2016 and beyond for GV.

 

 

Cool Startup: RubiconMD

RubiconMD team sitting 2

Primary care practice stands on the precipice of radical transformation as emphasis shifts from offering volume-based to value-based care. Look no further than the recent Supreme Court ruling to see that the ACA and its mission are becoming further cemented into the U.S. healthcare system. The goals are lofty: higher quality and greater access to healthcare at a lower cost. For most, it’s hard to imagine what this healthcare landscape will look like in the future.

But Gil Addo, the CEO and founder of the NYC- and Boston-based healthcare startup RubiconMD, seems to know. His novel vision of the future involves shaking up the traditional model of primary and specialty care practice in medicine.

A Yale and Harvard Business School graduate, Addo’s experience as a consultant and in commercializing innovation has included industry stints at both large and small tech and biotech companies. In early 2013 he met co-founders Dr. Julien Pham, a physician formerly on faculty at Harvard Medical School, and Carlos Reines, another Harvard MBA.

As of December 2014, they have raised over $1.4 million funding and support from major investors, including athenahealth and Waterline Ventures.

We sat down with Addo recently to talk about this innovative company and discuss his plans for the future.

Tell us about what you do at RubiconMD.

RubiconMD is meant to enhance access and bring appropriate specialist expertise into the primary care setting. The patients will see their primary care providers and whatever the issue is–if it is outside the PCP’s expertise and results in a referral—the physician can upload any relevant information, such as images, labs, and studies, and ask questions. We figure out who the most appropriate specialist is and then route the case to them so that they can respond within a few hours.

That’s the crux of the entire interaction. It’s a clinician-to-clinician electronic consult.

How did you get the inspiration to start RubiconMD?

I was very interested in this problem of enhancing access and wanted to find a way to solve it. I had a personal experience that motivated me to take this on. I had a grandmother who had to travel thousands of miles to Boston for treatment of a brain tumor, and then back and forth for all the follow-up. Why couldn’t her local provider oversee her care with appropriate support? There had to be a better way.

I traveled to India and looked at different healthcare delivery models and found that better way. There they have an extreme version of what you see everywhere: the appropriate expertise is in a concentrated area and people are everywhere else, so they bring the appropriate expertise into community health centers.

I started iterating on that model and borrowed things from other settings until I arrived at a solution that fit the U.S. healthcare market. RubiconMD allows increased access to the right specialist and brings that expertise into the primary care setting, to the front line.

How did you figure out if this might be something that primary care physicians would actually be interested in?

Once we figured out that the idea made sense at a system level, we had to figure out if this was a solution that physicians would use. Julien brought his clinical expertise and introduced the idea of “curbside” interaction, an informal and natural way that physicians interact with each other. We were able to validate the model on a small scale and see that physicians would actually use it and find value.

We ran a larger scale pilot to see if this would save people money. We used two large clinics with a panel of specialists and ran it across 15 or so specialties. The findings have been remarkably consistent.

  • In a third of the time, this support avoids a specialist visit. This has been consistent across all deployments and different populations.
  • Another third of the time this process improves the referral. You’re able, even though you’re referring, to send along the appropriate labs and studies and waste less time. And you make sure the patient goes to the right specialist.
  • For the remaining third of the time, it’s peace of mind. It validates what you were going to do.

The cost savings is from improving care outcomes and avoiding duplicate and inefficient use of resources. Almost $300/per opinion is saved, aside from other benefits such us reducing wait time and avoiding ancillary costs to patients.

Is this billable to insurance?

It is not. Right now, we work with value-based organizations incented to provide high quality primary care in the most affordable way possible who see this as a way to extend their capabilities, provide better and more timely care in the primary care setting and avoid unnecessary services.

Payers show interest, as this is a great tool to enhance outcomes and reduce costs while improving patient satisfaction.

What are the challenges that you’re having? 

No shortage of challenges. We focus on the sphere of healthcare that is value-based and incented to provide high quality care at the lowest cost. But U.S. healthcare still has a very large fee-for-service component and the biggest challenge is that we’re dealing with so many groups fighting themselves. It’s a system in transition. We’re trying to bring this into that environment and show them how we help them transition. It’s tough but enough of the market has moved and enough changes in primary care have happened that we have been able to gain momentum quickly.

What are your next goals, short-term and long-term?

Short term, we want to continue better servicing our customers, provide better tools to meet their needs and fit even better into workflow. We’re obsessed with enhancing workflow and not making additional work — providing a tool that syncs with the way physicians want to practice medicine.

Long term, we’re focused on the idea of democratizing medical expertise. As our longer-term vision, we want this to be the default. We want people to think of RubiconMD as the way to get high quality consults more efficiently and locally so that there’s no barrier for clinical expertise.

This article was originally published at MedTechBoston.com.

A Peek Inside the Harvard Forum on Health Care Innovation

Prof. John Quelch discussing the Bloodbuy case study.

The Harvard Forum on Health Care Innovation, a joint collaboration between Harvard Business School and Harvard Medical School, was recently held in Cambridge, Mass, on April 15-16, 2015. This private, invitation-only event assembled an elite group that included HBS and HMS alumni and faculty, as well as other key opinion leaders in healthcare. Cara Sterling, Director of HBS’s Health Care Initiative, who organized the event, shared that the goal for the event was to provide an opportunity for “people from different sectors to come together and talk freely” in order to “spur innovation in healthcare.”

One key aspect of the event was the introduction of the finalists of the HBS-HMS Health Acceleration Challenge, a contest that was launched to seek innovative, early-stage healthcare ventures that have great potential for transforming healthcare.

Out of a total of 478 applicants, 18 were selected as semi-finalists; from those, four of the brightest were chosen as finalists to share a $150,000 Cox Prize. They’ve also had an HBS case study written about them, and each team presented and received feedback at this year’s Forum. The final winner will be decided in a year’s time, by identifying the startup venture that is most successful in disseminating and scaling their healthcare solution.

Look out for the great work of these four finalists in the coming year:

  • Bloodbuy is a startup that aims to improve the efficiency and price transparency of the blood supply market by matching blood centers and hospitals through an online, cloud-based platform. In a pilot program, this system was found to decrease hospital costs by 23% while also decreasing the risk of blood shortages and the waste of blood products.
  • The I-Pass Patient Handoff Program is a training curriculum developed by six clinicians to improve the exchange of patient information between providers that occurs at the change of a shift. A research study of this intervention, published in the New England Journal of Medicine, found that use of I-Pass led to an impressive 30% reduction in medical errors.
  • Medalogix is a predictive analytics company that has created a product to that can assist those in the post-acute care sector to better identify hospice-eligible patients. Through working with Medalogix, clients have been able to successfully increase transfers to hospice from home health care and decrease the number of live discharges from hospice.
  • Twine Health is a startup that has created a cloud-based, collaborative care platform of the same name that enables providers to partner with their patients through coaches to provide seamless care and support for the management of chronic disease. In a recent clinical trial, Twine more efficiently helped patients achieve blood pressure control, which resulted in cost-savings (versus the traditional model of care).

***

In addition to the Health Acceleration Challenge finalists, there was also an impressive line-up of healthcare experts that shared their thoughts throughout the two days in keynotes and panel discussions. Below are some of the highlights:

Value in Healthcare

Speaker Peter Orszag, Vice Chairman of Corporate and Investment Banking and Chairman of the Financial Strategy and Solutions Group at Citigroup, discussed three major structural forces that he feels will have a major affect on healthcare quality and spending, including the shift to value based payments, digitization of healthcare, and the increased role of the consumer in healthcare spending. He also discussed three big unknowns and their future impact on the heathcare cost curve, namely: future policy changes, increasing consolidation of the healthcare market, and emerging healthcare innovation.

A Blueprint for the Future

Mark Bertolini, Chairman and CEO of Aetna, gave a keynote speech entitled “A Blueprint for a 21st Century Health Care System” in which he highlighted five key measures that hold promise to improve healthcare:

  • System re-design that enables lower cost, higher quality care with increased access
  • Sophisticated health IT systems
  • Care optimization, especially to coordinate care for the 5 percent for whom most healthcare dollars are spent
  • Aligning economic incentives with healthcare goals
  • Increasing patient engagement.

Employers as Innovators

In an engaging panel discussion, moderator Bryan Roberts, Partner at Venrock, discussed the growing role of “employers as innovators” with expert panel members Ellen Exum, Director of Benefits/Global Design and Strategy at IBM; Adam Jackson, CEO and Cofounder of Doctor on Demand; Brian Marcotte, CEO and President of the National Business Group on Health; and Derek Newell, CEO of Jiff.

There was a robust discussion regarding the use of wearables and other tools as part of wellness programs to increase engagement and compliance, and to hopefully improve outcomes. One example was Adam Jackson’s Doctor on Demand which, for $40 per telehealth visit, has been found to decrease costs, decrease absenteeism, and increase productivity and morale.

Focus on Neurologic Disease

In a discussion with William Sahlman, Professor of Business Administration at HBS, Deborah Dunsire, MD, President and CEO of FORUM Pharmaceuticals shared her company’s mission of tackling neurological disease. Costs to society due to neurologic disease are great, she argued, not just in terms of direct costs, but also indirect costs – and there should be increased focus in developing treatments for these disorders. One significant challenge is the lack of mental health advocacy, which is an obstacle to obtaining funding for research.

The “Retail-ization” of Healthcare

Speaker Helena Foulkes, President of CVS/Pharmacy and Executive VP of CVS Health, shared the key factors that she feels are driving the “retail-ization” of healthcare:

  • Excessive spending on chronic disease
  • Increasing number of baby boomers on Medicare
  • Rising use of the internet to research health information online
  • Growing numbers of employers with high deductible plans.

She also shared the initiatives that CVS has begun to help tackle these problems, which include drug adherence programs, a focus on patients with the greatest needs, and integrating digital tools.

Dr. Watson Will See You Now

Speaker Mark Megerian, Senior Tech Staff Member at IBM Watson Solutions, shared the exciting (and for some, frightening) prospect of using machine learning and predictive analytics to make clinical recommendations via IBM’s Watson program.

Trained at Memorial Sloan Kettering (MSK), Watson has been shown to be capable of making recommendations similar to MSK oncologists, with 97 percent accuracy, for breast, colon, rectal, and lung cancers. They are now scaling to include other types of cancers and also to involve other organizations.

***

Closing remarks were given by Dr. Jeffrey Flier, Dean of HMS, who shared that he feels healthcare delivery innovation has been sorely lacking, and that HMS and HBS are now deeply committed to medicine and entrepreneurship. Harvard hopes to lead healthcare innovation in the future. From the look of this year’s very promising Health Acceleration Challenge finalists, it seems his wish is likely to come true.

This article was originally published on MedTechBoston.com.

Key Healthcare Takeaways from HxRefactored

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Health Experience Refactored (HxRefactored), a conference co-hosted by health innovation event planner Health 2.0 and design agency Mad*Pow, recently met at the Westin Boston Waterfront on April 1 and 2, 2015. There was an impressive turnout of professionals from diverse industries, all gathering to discuss how to improve healthcare through better patient-centered design. The two-day event was jam-packed with keynotes from influential speakers, panel discussions, exhibits, and other presentations.

There was much to learn for anyone working at the intersection of technology, design, and medicine. Below are some of the key takeaways for healthcare professionals:

Harnessing “Small Data”

There’s a lot of buzz about collecting “big data” in healthcare right now, but Deborah Estrin, Professor of Computer Science at Cornell Tech, founder of Healthier Life Hub, and co-founder of Open mHealth, spoke about the need to build an ecosystem with small data, too – data that patients generate everyday. Small data includes passively recorded activity from wearables, data from mobile apps, digital traces from purchases and other online activities, and data from sensors. Estrin co-founded Open mHealth with the goal of creating free and open API’s where this small data can be collected, accessed and harnessed to better inform clinical care.

Changing Health IT

Dr. John Halamka, CIO at Beth Israel Deaconess Medical Center, outlined the big trends in health IT that we can expect in the coming year. These include work on the Federal Interoperability Roadmap, Meaningful Use Stage 3 Notice of Proposed Rule Making (which aims to simplify and enhance interoperability of the CMS incentive program), adopting a risk-based approach for regulating mobile medical apps, increasing awareness and focus on security and privacy concerns, and a return to private sector innovation, with the Argonaut Project being a prime example of collaboration among private sector EHR companies to create a universal format for data collection to enable more transparent information sharing.

Improving Healthcare with Telehealth

Dr. Geoff Williams from the University of Rochester’s Center for Community Health gave an interesting talk about the Self Determination Theory model of health behavior change. Through his research, he has found that increasing contact time with providers through virtual visits can lead to increased success in achieving desired behavioral changes and health outcomes. Virtual programs were found to be more successful than traditional approaches to treat certain health conditions.

Shifting to Innovative Care Models

During one of the panel sessions, Dr. Joseph Kvedar, Vice President of Connected Health, Partners Healthcare, discussed how the shift to value-based payments is necessitating the rise of innovative models of care that focus more on patient engagement, prevention and wellness promotion.

There were a number of interesting speakers from organizations working in this space who gave great examples of success in improving outcomes and providing cost- savings. The speakers included David Chao, Director, Industry Solutions at MuleSoft; Stanley Crane, Chief Innovation Officer at Allscripts; Andrea Ippolito, Presidential Innovation Fellow at the VA; Dr. John Moore, CEO of Twine Health; and Dr. Yuri Quintana, Global Health Informatics at Harvard Medical School.

Using Physician Databases & Referral Tools

Another interesting panel discussion focused on the struggle to efficiently find eligible physicians, make appropriate referrals and schedule physician appointments. There were a number of excellent companies represented during this panel, most of whom are building physician databases and working to correct this problem for various stakeholders, including patients, providers, and organizations. Most interesting is that in addition to providing these services, some of these companies can also harness their large databases for demographic studies of physicians. Speakers included Lisa Maki, CEO of PokitDok; Nate Gross, Co-Founder of Doximity; Ashish Patel, Co-Founder of Careset and DocGraph; Russell Tevis, Senior Director from the Advisory Board Company; and Julie Yoo, Co-founder and Chief Product Officer of Kyruus.

Keeping a Patient-Centered Focus

Ted Talk speaker Julian Treasure gave an inspiring final keynote that fittingly reminded the audience to keep the focus on the patient. He gave helpful advice on how healthcare leaders can be more mindful of the patient’s experience, particularly through the use of sound. He also discussed how to be an active listener, and also how to be more mindful when speaking.

This article was originally published on MedTechBoston.