Tag: "health IT"

Digital Health Entrepreneurs Raising More Capital Than Ever (Probably)

electronic-medical-record(A Version of this Health Alert was published by Forbes.)

A trio of new reports shows the fundraising landscape for new digital health ventures remains promising. New York’s Startup Health, an investor and accelerator, has released its report on the digital health venture market for the third quarter. Startup Health estimates $6.5 billion has been invested in digital health deals in the first three quarters of 2016, more than the $6.1 billion invested in all of 2015.

San Francisco’s Rock Health, also an investor, estimates $3.3 billion in new digital health funding through Q3. Startup Health’s figures are likely larger because Startup Health includes deals outside the United States (including a $500 million investment in a Chinses mobile medical service). Startup Health also includes deals as small as $52,000, while Rock Health has previously specified it only includes deals worth at least $2 million.

With respect to U.S.-based companies, both reports note the San Francisco Bay area continues to attract the most capital. According to Startup Health, the total is $1.2 billion – almost twice as much as New York or Boston. However, the pool is getting wider and deeper. Businesses in Philadelphia, Chicago, Minneapolis/St. Paul, Los Angeles, San Diego, Dallas, and Washington, DC, all saw good deal flow.

Artificial Intelligence, Machine Learning, and The FDA

Doctors Examining X-Rays ca. 1980s-1990s

Doctors Examining X-Rays ca. 1980s-1990s

(A version of this Health Alert was published by Forbes.)

In July, the Food and Drug Administration issued guidance on three topics important to the future of medical innovation. These welcome guidelines demonstrate the FDA is doing the best it can to ensure it does not interfere inappropriately with advances in medical technology that rely on processing information.

However, the guidelines also show the FDA will be limited in its ability to respond effectively to future innovations. Current law does not really define the FDA’s powers to regulate devices that depend on advances in artificial intelligence and machine learning, as applied to health care. Guidelines give medical entrepreneurs some comfort the FDA will not impose an undue regulatory burden on them, but they are no substitute for legislation precisely defining the FDA’s powers in the digital age.

Fortunately, new legislation that moves in the right direction – the 21st Century Cures Act – has passed the House of Representatives and will hopefully finish its passage through the Senate quickly enough that reconciliation between the two chambers can take place, and a good bill will pass before the 114th Congress adjourns.

Happy World Intellectual Property Day!

World IP DayTuesday, April 26 is World Intellectual Property Day. Coordinated by the World Intellectual Property Organization (WIPO), World IP Day celebrates “the role that intellectual property rights (patents, trademarks, industrial designs, copyright) play in encouraging innovation and creativity.” This year, World IP Day focuses on “the future of culture in the digital age: how we create it, how we access it, how we finance it. We will look into how a flexible intellectual property system helps ensure that the artists and creative industries are properly paid for their work, so they can keep creating.”

In health policy, we are mostly concerned with patents, which protect investment in innovation in medical technology, especially drugs and biologics. In honor of World IP Day, here are some of the publications NCPA has produced to make the case for good patent policy:

Explaining The Fall (And Possible Rebirth) Of Doctors’ House Calls

Medicine Bag and Stethoscope(A version of this Health Alert was published by Forbes.)

“Connected care” refers to a large and growing portfolio of digital tools, from video consultations with psychiatrists to in-home sensors passively detecting when a senior falls to devices that measure diabetics’ blood glucose and send messages to their families’ or doctors’ smartphones when intervention might be needed.

One very valuable service is telehealth, whereby physicians use email, phone, text, or video for consultations, reducing the need for time-consuming in-office visits. The benefit of this is illustrated by the story of Felipe Perez, a patient of the Sharp Rees-Stealy Medical Group in San Diego County, who used to have to take a five-hour long bus and trolley trip to get to his appointments.

However, we should not fall into the trap of all-or-nothing thinking, expecting patients only to see their doctors either in the office or remotely. With a little creativity, we can envision mobile health technology leading to the restoration of an almost forgotten medical tradition: The house call. Imagine the connected doctor travelling to patients as needed, with a portfolio of cloud-enabled diagnostic, therapeutic, and decision-support tools at her disposal.

Connected Care Cuts Costs; But Can It Overcome Inertia?

electronic-medical-record(Part two of a two-part series. A version of this Health Alert was published by Forbes.)

The first article in this series suggested that there is a great opportunity for “connected care” to reduce costs by keeping patients out of hospitals and nursing homes. “Connected care” refers to a large and growing portfolio of digital tools, from video consultations with psychiatrists to in-home sensors passively detecting when a senior falls to devices that measure diabetics’ blood glucose and send messages to their families’ or doctors’ smartphones when intervention might be needed.

It does not take a lot of imagination to see that these technologies should be able to cut huge costs out of the health system. Yet, uptake so far has been limited. To the degree that there has been widespread adoption, it is in the use of Electronic Health Records (EHRs). Nine in ten hospitals offer patients the ability to at least view their records online, and a significant share allow patients to download and transmit their records. However, this is not actually leading to better care, because the EHRs were implemented as a consequence of government subsidy rather than patient demand.

Connected Care: Moving (And Keeping) Patients Out Of Hospitals

Doctors Rushing Patient down Hall(Part one of a two-part series. A version of this Health Alert was published by Forbes.)

One of the greatest frustrations in health care is that technology tends to drive up costs. In pretty much every other area of our lives, technology reduces costs. Increased health spending is associated with better health outcomes (as recently summarized by Cynthia Cox of the Kaiser Family Foundation). Nevertheless, we would like to get these benefits at less cost.

The opportunity to achieve this is at hand. A host of technologies promises to significantly reduce costs by eliminating friction in the flow of clinical data between providers and patients, making sense of data from different sources, and allowing patients and providers to interact in new, cost-effective ways. This will allow patients to get more care where they want it, and not where the system demands they show up.

Cancel, Don’t Delay, Meaningful Use Stage 3 for Electronic Health Records

electronic-medical-record(A version of this Health Alert was published by Forbes.)

Over one quarter of the members of the U.S. House of Representatives – 116 of them – just signed a letter to the U.S. Secretary of Health & Human Services urging delay of the next step in the federal government’s struggling effort to impose uniform federal requirements for health information technology.

The rule in question is Meaningful Use Stage 3 (MU3), imposed by the federal government via the HITECH Act of 2009. The so-called “stimulus” act committed almost $30 billion to induce physicians and health facilities to install Electronic Health Records (EHRs) and move patient records beyond clipboards and manila file folders. These are worthy goals. Unfortunately, the $30 billion has pretty much all been spent, and there is precious little to show for it.

Zombies Stalk the Health Care Landscape!

Accenture, the management consulting firm, has concluded that the flood of venture capital into digital health startups is not only maturing, it has created a race of zombies that will be bought up on the cheap by established players. In language not usually employed by the elite ranks of sober-minded management consultants:Zombies

Accenture predicts that more than half of digital health start-ups funded between 2008 and 2013 are not likely to survive longer than 20 months. Some healthcare companies will look to buy these “zombie start-ups” to drive growth by infusing top talent, fueling innovation and bolstering existing solutions.

While digital health and healthcare IT start-up funding is accelerating, the reality is that few start-ups will stand out. Even fewer will survive. Of the nearly 900 digital health start-ups that Accenture studied, 51 percent are zombie start-ups, at risk to die. These are companies that each received less than $50 million in total funding between 2008 and 2013 and have not received funding in 20 months or more.

Elementary, My Dear Watson: IBM Enters Medical Image Storage

Doctors Examining X-Rays ca. 1980s-1990s(A version of this Health Alert was published by Forbes on 8/17/2015.)

IBM has suffered declining revenues for 13 consecutive quarters. Although (like many U.S. companies) it attributes its poor results to the strong dollar, its once-praised pivot from hardware to software has put in into some crowded and stagnant markets. Nevertheless, it remains a company with great ambitions, largely built around Watson, the supercomputer which famously beat human beings on the game show Jeopardy! In 2011.

IBM has always hoped Watson would transform health care. It launched Watson Health as a strategic business unit in April, since which it has announced three small but significant acquisitions. Last week, IBM announced the friendly takeover of Merge Healthcare for $1 billion.

Blurring Boundaries Between Biotech, Digital Health, Patient Care Show Need For Regulatory Reform

HSA(A version of this Health Alert was published by Forbes on July 29, 2015.)

When was the last time a billionaire entrepreneur en route to New York to raise a couple of hundred million dollars for biotech company stopped in Washington, DC to spend the afternoon in a panel discussion advocating the need for fundamental reform of the Food and Drug Administration?

Patrick Soon-Shiong, MD, founder of the NantWorks group pf companies, did just that on Monday afternoon. At the event, the Bipartisan Policy Center launched a report on advancing medical innovation in America. Written by a team led by former U.S. Senate Majority Leader Bill Frist, MD, and former Representative Bart Gordon, the report seeks support for a number of steps to reform regulatory processes and reduce the cost of medical innovation.