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.

 

 

Walgreens: Investing in the Power of the Patient

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Thanks in part to Affordable Care Act reforms and the rise of digital health, patients now have more skin in the game, more health care tools at their disposal, and more information than ever before to take charge of their own health.

Dr. Harry Leider, CMO and Group VP of Walgreens, speaking on a panel at last week’s Digital Healthcare Innovation Summit in Boston, said health care providers must find a way to adapt to the schedules and demands of patients, who have more say over how their health care dollars – and their time – are spent.

“Traditional providers are learning that they [patients] are not willing to take a half-day off from work, figure out what to do with their kids, to get routine care,” he told the panelists. “People are busier, the information technology has made it easier to get solutions without having to spend a half-day somewhere.”

It’s no surprise, then, that pharmacy retailers are placing big bets on consumer-facing health care opportunities.

In the past few years, the pharmacy-services giant CVS Health has made big investments in this area, dropping tobacco sales, expanding its MinuteClinics, and also establishing a drug ad-herence program. Now with Walgreens’ recent announcement of its $9.4 billion acquisition of Rite Aid Pharmacies, it has effectively overtaken CVS to become the leader with 46.5% of the market to CVS’ 30.9% share.

But Walgreens is looking to get bigger on the back end as well. Also, just this week it announced an upgrade to their mobile app which improves its functionality and also expands their telehealth services to 25 states (previously available in only 5 states). Walgreens’ other health care investments hint at its level of commitment, including its partnership with controversial laboratory services company Theranos and a recent announcement that it has partnered with health information tech giant Epic to install that firm’s electronic health record software across all of its health care clinics.

Walgreens is banking on its huge presence to provide easy and convenient access to the next generation of health care consumers. “Everybody knows Walgreens,” Leider said. “We have 8,300 stores, 25,000 pharmacies, and over 1,000 nurse practitioners in our clinics.” He also emphasized that half of Walgreens are located in ethnically diverse areas, with a large number of especially high-risk populations, which gives them a unique opportunity to influence health care outcomes. “Take the average diabetic patient. Diabetes is an epidemic in our country, but especially among diverse populations. First of all, a diabetic, if they’re lucky, sees a primary care doctor two to three times a year. The average diabetic comes to our pharmacy counter 20 times a year. So the opportunity to provide systems that can solve problems is greater because of this.”

Walgreens has started a digitally supported Healthy Choices Program, which rewards consum-ers for walking, weighing themselves, logging blood pressure and blood glucose levels, commit-ting to smoking cessation, and setting other health goals. In addition, it offers digital health coaching, pharmacy checks, and even virtual doctor visits.

Roughly 800,000 people have signed up, Leider said. About 500,000, of those patients are sharing their personal health data with Walgreens. What the company has found thus far from its collection of these data is that engaged users (who are actively tracking their weight) lost an average of 3.3 pounds more than non-engaged users and 1 out of 6 lost more than 10 lbs. In addition, Walgreens found that its engaged users have overall healthier behaviors and better drug adherence.

Still, he’s not a blind advocate of digital health: “I don’t think digital health alone can solve the problems you’re talking about.” Leider insists that Walgreens is not trying to usurp the tradition-al establishment but rather be a resource to providers. “We really see ourselves as supporting traditional providers and adding value to the ecosystem. We’re not gearing ourselves up to do primary care,” he said. “So our strategy really is to provide a low-cost option for care and to partner with health systems and providers.”

Going forward, Dr. Leider would like to see a greater transition to value-based care. “Despite what everybody’s saying, most providers are still trying to keep the beds full and have the most number of visits. So, for all this tech to be funded and sustainable, it’s got to be the right envi-ronment to really reward people for staying well.”

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