Digital Health is Underfunded

digital health is underfundedOverall venture capital funding made a sharp decline in the last two quarters amid worries (justifiable or not) of a bear market and a funding bubble in technology investments. In contrast to the tech market, however, digital health funding continues to grow at a record pace. According to Rock Health, $4.5B was invested in digital health in 2015 (an increase from $4.3B from 2014) and $981 million has already been invested in the first quarter of this year. It seems on pace to be another stellar year, which is remarkable considering what is going on in other sectors.

Many are skeptical about the investment potential of healthcare technology investments and have been wary to enter the market (perhaps especially so with all the negative media that companies like Theranos and Zenefits have attracted). Additionally, regulatory barriers and the longer timeline needed with healthcare innovations tend to scare potential investors away.  But anyone familiar with the sad state of technology in healthcare can see, even with the record-breaking investments thus far, that there continues to be an enormous untapped opportunity in healthcare–greater, I believe, than in any other sector.

Digital health is vastly underfunded.

Technology is taking over most of our personal and professional lives with indispensable apps, wearables, and other connected devices and software. At home, we have smart appliances, lighting, thermostats, security systems, media systems, and even smart cars. And we have Siri, Cortana, and Alexa doing our bidding. But in healthcare, we’re still in the Stone Ages in terms of technology. Communication via faxes, for example, is still common between hospitals and doctors offices. There are small glimmers of hope, such as patient portals, higher-functionality EMR systems, and telehealth services, but the fact is that we are still a far cry from the ideal vision for healthcare, which includes a seamless cloud-based network of devices and software that can track and record a vast spectrum of patient information, the ultimate goal being the use of computational technology to help prevent, predict, diagnose, and yes, even treat disease. Ultimately, collecting information on large populations of patients could have profound impact through public health measures that can prevent disease and thereby reduce healthcare costs. This can only be accomplished with a wide-spread network of software and devices, that includes electronic health records, wearables, devices based in the hospital, office, and at-home, and with telehealth capabilities. In addition, there are too few companies working to collect, store, manage, and interpret health data.

There is still a lot that needs to be done.

According to MarketResearch.com, the healthcare “internet of things” (IoT) is expected to reach $117B by the year 2020. The fact is, the full potential of digital health won’t be seen until every hospital and doctor’s office and home is connected via cloud-based devices and software and with the development of machine learning platforms that can make sense of the reams of health information.

It is a little challenging to think of all of this in the abstract, so here are a few examples of the potential of the healthcare IoT. Imagine that a spike in certain population health data (like temperature) is detected in a region of the country that alerts public health officials to early to a disease outbreak that can then be contained to prevent an epidemic. Imagine that a change in an individual’s biometric data alerts that person to seek medical care, detecting a life-threatening disease, like cancer, early and improving the chances of cure. Imagine chronic health conditions like diabetes are monitored routinely and continuously with real-time blood glucose levels, with immediate adjustment by doctors of insulin dosages, thereby preventing hospitalizations due to uncontrolled diabetes, and also preventing long-term diabetic complications, such as kidney disease.

These are only a few examples.  There are countless other opportunities in healthcare.

In addition to the opportunity to improve healthcare delivery, there is the opportunity to improve the quality of care through tools that provide greater communication and transparency of information with patients and improve care coordination between the providers of those patients. And by changing the focus of medical care to prevention and early diagnosis of disease, there is the opportunity to decrease the outrageous cost of healthcare as well, by decreasing the need for excessive medication, surgery, unnecessary visits, and hospitalizations. According to the Commonwealth Fund, in the US we spend an outsized proportion of our GDP on healthcare versus other countries. Other developed countries spend between 8.8%-11.6% to our 17% of GDP, related in part to better-connected health IT networks.

It’s hard to fathom how much digital health tech is needed to serve a US population of 318 million and a global population of 7 billion, but one thing is certain: the market is huge.  We should stay bullish on health tech investments now, and probably for a long while to come.

 

Don’t Count Out Theranos

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The past few weeks haven’t been easy for Theranos, the pioneer hoping to make blood diagnostics a whole lot easier.

A scathing account by The Wall Street Journal, followed by some troubling documents released by the FDA, armed critics of the upstart start-up. The company clearly needs to counter these charges and demonstrate efficacy of its tests and the soundness of its business model.

However, change isn’t easy even in an industry like blood testing, which must be disrupted. We are literally still drawing vials and vials of blood for laboratory tests. This procedure seems only a shade better than the days of medical bloodletting with leeches. Also, these tests are notoriously expensive and have slow turnaround times.

What if Theranos CEO Elizabeth Holmes is on to something here?

What if her vision of easier, faster and cheaper blood testing is really possible? Wouldn’t we all like to see that? Blood testing is a very fundamental aspect of medicine and improving the current antiquated process has the potential to truly transform health care in a big way. Imagine how many more people might be compliant with their blood tests with this type of testing. Imagine how much faster we’d get results in critical situations, and how many lives might be saved. Imagine how much we could save our very wasteful and expensive health care system by making this process cheaper.

Before you say it’s impossible, let’s remember that the FDA did approve one of Theranos’ tests via its nanotainer technology, a test for the herpes simplex virus (HSV). That is an impressive feat, and quite frankly, I’d really like to see what other tests Theranos has been able to do via its tiny nanotainers. According to Holmes, the firm has something on the order of 120 tests submitted for approval with the FDA. Squash them now and the world may never know.

The media frenzy circling Theranos is unfortunate, and we should all hope it won’t kill off something that could really transform health care for the better. We shouldn’t be trying to protect the status quo in our dysfunctional health care system. Instead, we should be less hasty to judge Theranos.

Let’s keep in mind when we read media reports that there are a lot of stakeholders embedded in the health care industry – from equipment makers to laboratories to walk-in clinics and pharmacies – that might like to see Elizabeth Holmes fail. Some of these players currently own the market. That means they dictate the availability, the turnaround times, and yes, the price of these tests. Sure, maybe they could innovate also, but there’s inherently less motivation when you’re already a market leader. How about we introduce some competition to drive prices down and introduce more motivation to innovate?

Theranos, admittedly, has a lot of work to do. It is trying to disrupt the entire laboratory industry, while currently having just one FDA-approved test. I’m hoping more of its technology will meet FDA approval. In the meantime, it makes business sense to offer venous blood draws. If the company wants to capture enough of the market, it needs to offer the full spectrum of services to customers, be it using its proprietary technology or the industry standard.

As for Holmes, I can’t blame her for being protective of her nascent company. Unfortunately, people tend to be suspicious of things they don’t know much about, so that approach is not going to work anymore. Her challenge in the coming months will be how to effectively share more information with the media and increase transparency, now that she and Theranos are much more in the public eye.

There’s reason for optimism, not paranoia, about Theranos. Let’s allow some room for its visionary leader to carry out her ambitions. Maybe, just maybe, she’s on to something that can change health care, and the world, for the better.

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Conflict-of-interest disclosure:

I have no financial or other ties to Theranos or Elizabeth Holmes. My biases include wanting to see positive health care change and more women leaders. The opinions I’ve expressed here are my own and not those of any of my employers or affiliates.

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This article was originally published at www.digitalhealthcaresummit.com.

Investing in Problem-Solving, Not Product: PureTech’s “Proactive” Approach

PureTech Health (PRNewsFoto/PureTech Health)

Step into the sixth floor offices of PureTech Health in downtown Boston and you may feel that you’ve dropped into a rabbit hole and right into a lush wonderland of wall-to-wall greenery. It’s a surprising interior for the otherwise nondescript office building on the heavily trafficked Boylston Street.

But the unique décor might provide a clue about how this innovative company, run by CEO Daphne Zohar, operates. Referred to as an intellectual property (IP) commercialization company, one of a rare breed seen in the U.S., it licenses and develops health tech and life sciences patents from academic and independently-run labs. The model is common in the U.K.–PureTech Health went public on the London Stock Exchange this past May, raising nearly $200 million—but is radically different from how typical biopharma or venture capital firms operate.

“We start with the problem–take obesity or other disorders, like schizophrenia, ADHD–where we feel like there really isn’t a very good way to address it, and we bring together a network of 50 plus experts from around the globe, people who have really thought deeply about this problem and others who may be in slightly different disciplines,” explains Julie DiCarlo, PureTech’s SVP of Communciations and Investor Relations. “They look at the problem from different perspectives and start vetting potential technologies or science to address it. So it’s really different than a company that might say, ‘Here’s a really cool technology that we want to invest in.’”

After the think tank identifies potentially useful innovations, PureTech tests the concepts to see if previously reported results are reproducible. DiCarlo adds, “From there, we might find that there’s one that really stands out as a really potentially exciting and game-changing opportunity and if it passes all of our rigorous tests, we’ll start a company around it.”

This process of search and discovery has lead to the founding of some of the most innovative healthcare-focused companies, with diverse treatments ranging from drugs and biologics, to devices and digital health.

Akili Interactive Labs develops video game therapies for treating cognitive disorders, which have been found to improve cognitive ability and executive function among the elderly. In the future, Akili hopes to also develop treatments for those suffering from disorders like ADHD, autism and depression.

Vedanta Biosciences hopes to treat autoimmune and infectious diseases by modulating a patient’s microbiome. At this stage, Vedanta is isolating specific strains of organisms in order to learn which combinations result in particular, desired phenotypic expressions and outcomes.

Gelesis has developed an oral hydrogel capsule for the treatment of obesity (and related disorders, such as diabetes) which works mechanically, causing early satiety and decreased appetite, before dissolving and being eliminated by the body.

Tal Medical is working on a tabletop medical device (modeled like a much smaller MRI machine) that has been shown to rapidly reverse depression through neurostimulation. A single treatment with the device has been found to have an effect equal to four to six weeks of traditional pharmacologic treatment.

PureTech has 12 companies currently in their portfolio with a goal to add an additional one to two each year. Although each is independently-run, they are all majority-owned by PureTech, sometimes for the long-term. This approach allows for more flexibility than at a typical life sciences or VC firm. These companies have the potential to become completely independent, be sold to larger biopharmas, develop partnerships with other healthcare organizations, or may be retained by PureTech to continue growing the company’s product lines.

Executive Vice President of Science and Technology Erik Elenko calls PureTech’s approach “100 percent proactive.” “Think about a typical entrepreneur who has one technology and they [sic] get really excited about it but there could be 10 others out there. We’re reaching out to people, we’re not having companies come and pitch us…The key is that you start with a problem and come up with a solution, rather than investing in a technology which may or not be useful.”

The company also draws on a large, interdisciplinary panel of experts—including outside experts in addition to members of its own scientific advisory board—who look at complex healthcare problems from a multitude of angles. Among the most valuable and in-demand consultants are those working in digital health. According to Elenko, healthcare and IT have radically different cultures and “different ways of approaching the world,” so finding individuals that have connections in both worlds is invaluable in solving today’s complex healthcare challenges.

PureTech has ambitious plans for the future.

“If you look at our fundamental goal, it’s to solve the most difficult healthcare problems that exist through interdisciplinary and unexpected solutions,” shared Elenko. “Success is getting therapies to market for patients, reaching more patients through partners and helping patients by looking at their toughest problems.”

This article was originally published on MedTech Boston.


Cool Startup: Bloom Technologies

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checking for contractions with the Bloom sensor

It’s hard to read Peter Thiel’s Zero to One book and not start thinking in an entrepreneurial way.  Afterwards, I thought about where we have gaps in healthcare.  There is a lot of technology out there (apps, wearables) right now that has empowered patients to take charge of their own health.  One area that seems to be lacking is in women’s health.

There are a number of critical challenges in women’s health right now that could benefit from innovation.

First is the growing problem of access to women’s health providers, particularly Ob/Gyn’s, which will only increase in the years to come.  Demand remains constant, while supply is dwindling, because of factors such as an aging workforce and its low appeal to medical students related to demanding work hours and professional liability.  The Association of American Medical Colleges anticipates a shortage of 159,300 Ob/Gyn’s by the year 2025.

Second is the persistent scourge of preterm birth.  According to the CDC, preterm birth affects 1 in 9 of pregnancies and is the number one cause of infant death and long-term neurologic disability in the U.S.  It has been estimated that preterm birth costs our healthcare system more than $26 billion a year, though the societal costs are likely much greater.

Thinking about these two major problems made me wonder if anyone out there is working on technology that could positively impact either of these problems.  That’s how I stumbled across and connected with Bloom Technologies, a healthcare tech startup based out of San Francisco.  Bloom is currently developing a wearable contraction monitor that could help pregnant women determine first, if they are having contractions, and second, if those contractions are of the true, labor-inducing variety, or the false, Braxton-Hicks, variety.

Obviously, this product could have a great deal of potential.  It’s almost a right-of-passage in pregnancy for women to make frequent visits to the hospital only to be sent home, after being told that it’s not “real labor” yet.  Might this wearable device be able to tell patients when it’s the real deal?  And are there patients that would be interested in such a thing?  Molly Dickens, the head of Content and Consumer Experience at Bloom, feels that women are often confused and overwhelmed by all the rapid changes of pregnancy and anything that could help them to better understand what’s going may be welcome.

I think the Bloom sensor has even greater potential beyond just the obvious.  In light of our impending Ob/Gyn shortage, might we be able to use this device to remotely monitor patients in the future?  Could this be integrated into a telehealth approach for obstetrical care in the future?  Remote visits could obviously help to decrease over-utilization and costs of healthcare.  Also, in light of our epidemic of preterm birth, might this help us to detect preterm labor earlier, and therefore intervene in a more timely manner?  I would love to see this device studied in clinical trials.

The other thing that I find exciting about this product is that Bloom is developing this device to be of clinical-grade quality, one that could potentially rival current inpatient systems for contraction monitoring.  Currently, in Ob/Gyn, we use tocodynamometers, which measure pressure changes in the abdomen to get information about contractions.  Toco’s (as they’re called) are accurate as far as determining the timing of contractions, but pretty dismal at telling the strength of uterine contractions.  Bloom CEO, Eric Dy, shares that he and his colleagues are working at the circuit level on the signal, size, quality, and power of these devices to assure an exceptional product that–unlike traditional tocodynamometers–will measure electrical signals much like cardiac monitoring (the uterus, after all, is a muscle, too).  If these devices are better than the traditional toco’s used at every hospital across the country, we might see a real transformation of inpatient obstetrics as well.

I, for one, would also love the convenience of being able to just check my phone to see what’s going on with my patient & her baby, instead of having to solely rely on a single, static inpatient site to evaluate them.

In addition to contraction monitoring, Bloom is also working on other technologies that will help women to gain valuable information about their health from conception to the postpartum period, which they hope will ultimately help to drive better outcomes.

If you’d like to learn more about Bloom, check out their links below:

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