Wireless Health Innovators…“Where are they now?”

Nominations open next week for the 2012 TripleTree I Award, our annual recognition of innovations in wireless health.  Messaging from new market entrants to physicians, payers, and most notably consumers is fueling a strong venture capital appetite, and looking back at the I Award finalists since 2009, we thought it was useful to list a few notable accomplishments.

Public Markets

• Epocrates – The first mobile healthcare company to successfully go public in early 2011 raising $86m

Funding

• Airstrip Technologies – Received an undisclosed amount of funding from Sequoia Capital
• IntelliDOT – Raised $30m+ from leading investors including Psilos Group, TPG Growth, Camden Partners, Integral Capital Partners, J.F. Shea Ventures, Menlo Ventures and American River Ventures
• Proteus Biomedical – Raised $25m from Medtronic, Novartis, and ON Semiconductor Corp
• TelaDoc – Raised $18m from Cardinal Partners, HLM Venture Partners, Kleiner, Perkins, Caufield & Byers, New Capital Partners, and Trident Capital

FDA Approval

• Calgary Scientific – ResolutionMD^TM  after 23 months received 510(k) clearance from the FDA
• Telcare – Wireless blood glucose meter received 510(k) clearance from the FDA for its device, Telcare BGM

Acquisition

• CellTrak Technologies – Expanded into Canada through its acquisition of MedShare mobile technology for home health care
• Healthagen – Patient access software to providers acquired by Aetna

Since TripleTree’s I Award inception in 2009, one company has gone public, one has been acquired, numerous rounds of funding have been raised, multiple FDA approvals granted, and some businesses have scaled nicely.  As the market continues to mature and awareness and user adoption grow, questions loom…

• Is “connected health” on the verge of a breakout?
• Are wireless health solutions the answer for reduced healthcare costs and improved quality of care?
• Will innovation be driven by non-traditional healthcare vendors (ie device vendors and mobile service providers)?
• How are the ramifications of reform influencing innovation?

As we consider these questions, a few key indicators are influencing the market:

• Four out of five physicians use smartphones, computer tablets, and other mobile devices (Jackson & Coker industry report)
• More than $600m has been invested in the wireless health space since January 2010
• 89% of healthcare decision makers believe telehealth will transform healthcare in the next 10 years (Penn Schoen Berland Study)

Below is the honor roll of past I Award finalists.  Look for more information from TripleTree in the coming weeks as the nomination process commences and we plan for the WLSA Wireless Health Convergence Summit scheduled for May 22-24 in San Diego.

2011 Finalists
BodyMedia*	Wearable body monitoring device
Cambridge Temp Con*	Wireless physiological monitor for infertility
Cardiocom –	Clinical telehealth services
Cellnovo	Mobile diabetes management system
Healthagen	Patient access software to providers
Mobisante	Mobile ultrasound imaging system
Palomar Pomerado Health	Real-time mobile software patient electronic health information
Phreesia*	Touch-screen mobile tablet
TelaDoc	On-demand patient access solution to ERs and urgent care
Telcare	Wireless bloodglucose meter
Vitality	Mobile medication adherence
Wound Technology Network	Telehealth- based wound services
2010 Finalists
AirStrip Technologies	Mobile patient information
Calgary Scientific*	Medical imaging
CellTrak Technologies*	Homecare with GPS cell phones
Corticare	Critical care patient monitoring
Great Connection	Mobile imaging communications
Hopskipconnect	Motivational self management tools
InnerWireless	In-building wireless solutions
Ocutronics	Retinal camera
PerfectServe	Physician and patient care communication
PharmaSecure	Pharmacy brand protection solutions
Zeo, Inc.*	Sleep monitoring
ZMQ Software Systems	Sustainable development
2009 Finalists
BeWell Mobile	Disease management applications via text messaging on cell phone
CellTrak Technologies	Homecare automation with GPS cell phones
Diversinet	Health information transparency in partnership with AllOne Mobile
Epocrates	Rx Drug and formulary reference
GreatCall*	Jitterbug; simple cell phone with 24-hour live service
IntelliDOT*	Workflow manager connecting caregivers with information systems
MedApps	Mobile wireless health monitoring
MicroCHIPS	Continuous glucose management system
PhiloMetron	Passive weight management platform
Proteus Biomedical*	Electronically observed therapy platform
Tagnos	Patient flow management applications
Triage Wireless	Wireless telemetry/vital signs monitoring

*Denotes I Award Winner

 

Joanna Roth

Joanna Roth is a Senior Analyst at TripleTree covering the healthcare and technology industry, specializing in education solutions. Follow Joanna on Twitter or e-mail her at jroth@triple-tree.com.

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Can Consumer-Centric Technologies ‘Hang Ten’ on the Silver Tsunami?

In 2011, the first wave of the baby boomers will turn 65, and by 2030, there will be >70 million elderly Americans, more than double the number in 2000.  It has been well discussed that the current health care system does not have the necessary infrastructure to adequately support the complex needs of our aging population.  We continue to hear about the new and innovative technologies that are poised to fix our healthcare delivery system by keeping the seniors well monitored and living in their homes longer.  While technologies for senior care have clearly evolved, many of the challenges that have kept it from widespread adoption over the past twenty years still remain including:

• Slow adoption among seniors:  Seniors are slower-than-average adopters of technology, and this has contributed to a sense of untapped opportunity in the market.  The underlying reasons for this are not complicated – most products are not designed with the senior population in mind.  It is certainly plausible that seniors would use technology more readily if it were designed to meet their needs, but there is a natural avoidance from this population today.
• Out-of-pocket costs:  A lack of Medicare reimbursement for remote monitoring of patient care has pushed the costs to the consumers.  Emerging technologies must be able to provide outcomes and ROI studies which prove the value of their product/solution before reimbursement will be considered.
• Lack of defined sales channels: Because of reimbursement issues, almost all of these products have yet to penetrate a highly visible sales channel.  Until consumer electronics retailers, such as Best Buy start prominently displaying senior care technology solutions, most of these products will remain available only through a distributor or direct from the manufacturer.
• Regulation and lack of interoperability: The FDA has indicated that it intends to regulate the flow of health information and a lot of confusion still exists around what is and what is not health information.  A lot of attention is focused on the Continua Health Alliance, which will hopefully sort out some of the interoperability issues.
• Products instead of solutions:  In our view, a key problem in this market is that there are now dozens – if not hundreds – of technology products for the elderly and their caregivers, but very few full solutions.  Every day brings a new press release about a new product.  It seems to me that the future leaders in this market will be those that find a way to offer a fully integrated technology-enabled solution rather than a list of products.

Our team is assessing this pending “Silver Tsunami “and preparing a research publication for release later this quarter.  We’re still early in the seniors-focused technology curve and many ideas/companies will struggle (and fail) amid the challenges described above.  Those organization fortunate enough to grasp it, will thrive in this extremely large and underserved market. Thanks and have a great week.

Judd Stevens

Judd Stevens is an associate at TripleTree covering the healthcare industry, specializing in the impacts and transformation of health plans in a post-reform world.  Follow Judd on Twitter or e-mail him at jstevens@triple-tree.com.

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When Should ‘Blackberry’, ‘iPhone’ and ‘FDA’ Be Used in the Same Sentence?

The FDA classifies a medical device as “…an implementation, product, apparatus or other component or accessory, which is used in the diagnosis, cure, mitigation, treatment, prevention of disease or effects any structure of the body–that could actually include some information technologies and performance technologies–but usually something that is performed on the patient, touches the patient or is performed between physician and patient.”

By this definition, an iPhone or Blackberry loaded with the proper apps or enabling a key medical service becomes a FDA-regulated device. That is an industry with over 5 billion previously unregulated potential medical devices waiting to be enabled by the 17,000 plus increasingly sophisticated wireless health applications in the market and thousands applications more in active development. Wireless and mobile health researchers at strategy consulting firm CSMG estimate industry revenues to top $4.6 billion by 2014, a stunning figure for an industry that didn’t exist just 5 years ago.

Recognizing the potential regulatory bombshell, the FDA and the FCC convened last July for a meeting on “Converged Communications and Healthcare Devices Impact on Regulation to address the current state of wireless health, innovator perspective, and investor perspective. The agencies’ stated motivation for the meeting was to “clarify and delineate the respective areas of expertise and jurisdiction between the agencies” given the increasing convergence of communications and wireless technologies and medical devices. Emerging from the meeting was a joint FDA-FCC memorandum of understanding to promote collaboration and eventually refine and improve the regulatory processes applicable to wireless-enabled medical devices (and conversely wireless devices with medical applications). While an admirable step towards normalizing government oversight over the mHealth market, neither agency has issued concrete guidance or a path to regulatory approval to date.

The FDA’s lack of clarity is causing uncertainty amongst entrepreneurs and investors. Just last month, the agency finally announced it would issue guidance on mobile medical applications later this year, settling an issue that has had many industry investors cautiously observing from the sidelines and developers nervously eying their own business plans.

Given the day’s current political environment of overregulation, it’s possible that the decision could have severe ramifications on growth in an industry in the midst of considerable upswing.

With the number of mobile subscribers worldwide passing the 5.3 billion mark at the end of the year, over 75% of the global population has a mobile device, and that number is expected to grow thanks to increasing penetration in developing countries and the growing presence of tablet computing.

We are optimistic that the FDA will adjust its need for regulation in harmony with the industry’s need for innovation, creating a set of guidelines that will attract investors and entrepreneurs while protecting the security of consumers and medical data.

Have a great week!

Marc Baudry

Marc Baudry is an analyst at TripleTree covering the healthcare industry specializing in population health management and healthcare informatics. Follow Marc on Twitter or email him at mbaudry@triple-tree.com.

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“The New India”, Consumerism and Wireless & Mobile Healthcare

My brother recently migrated back to India to lead a start-up in the electronics sector.  As he busily builds his business and reestablishes himself, he has introduced me to the concept of “The New India.”

The importance of his remark is wide-ranging as India competitively touches nearly every sector of the U.S. Economy. However, because of my 30+ year career in healthcare, I immediately began to consider where The New India will impact my day-to-day business realities as well.

Much has been written about the impacts of the BRICS (Brazil, Russia, India, China, South Africa) economies on innovation and consumption in many industries; but a recent New York Times article citing how the U.S. medical device sector may be losing some of its competitive edge (thanks to FDA scrutiny) underscores a viewpoint for healthcare.

Scrutiny equals delays, and delays equal costs; and while the FDA has a tough job, at some point it will need to confront (and adapt) to the realities of our globally competitive market.  The company mentioned in the article (Biosensors International) learned this the hard way, like many other emerging healthcare companies, as it was forced to shut down operations due to the lengthy FDA approval process.

The FDA’s high bar on healthcare standards in the U.S. could cloud some observers the reality that superior care also exists in BRICS economies; however healthcare access is another story.  Eighty percent of populations living in non-metro areas are often far from primary care facilities.  Thus, the expense of travelling to a doctor for even the slightest adverse health condition is usually so high that those who need the care most don’t get it.

Wireless and mobile approaches to healthcare can help alleviate this burden, and allow the impoverished consumer access to care at a central facility, freeing up monies for care that otherwise would have been spent on transportation to a distant care center.   This “redirection of discretionary spending” enables “new BRICS consumers” to have better control over their limited funds.

In India and China, 2.2 billion people actively use the web and social sites like Facebook and Xiaonei.  Are the executives of U.S. based medical device companies paying attention to the preferences of these newly empowered consumers?  A few have grasped the reality that wireless and mobile technologies are true enablers of healthcare and despite the infrastructure barriers in the BRICS countries, the pent up user demand from billions of consumers is driving meaningful innovation.

The application of wireless and mobile health solutions in traditional environments is top of mind with government and business leaders and is a central theme to the upcoming Wireless-Life Sciences Convergence Summit in San Diego. Recent research on wireless and mobile health from our friends at TripleTree is here; and we’d welcome a chance to share our latest thinking on this dynamic sector of healthcare.

Ashok Kaul

Ashok is the Vice President of Healthcare Convergence for the non-profit Wireless-Life Sciences Alliance.  You can contact him at akaul@wirelesslifesciences.org.

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Far Reaching Implications Likely With FTC’s “Do Not Track” Proposal

The FTC’s recently proposed “Do Not Track” initiative is example of a larger movement within the regulatory space. The increase in regulation – be it the recent push for a web privacy “Bill of Rights”, the FTC becoming every involved in net neutrality, the oversight of the FDA on new mHealth applications, or HIPAA’s increased relevance as we move to universal electronic medical records (EMRs) in the coming years – is being followed by a subsequent explosion in governance, risk, and compliance (GRC) activity.

There are two themes to take away from this:

• The GRC and security sectors will become more popular amongst investors
• The old adage, “knowledge is power” is even more true now that user-centric data is paramount to business analytics, business intelligence, and a key competitive advantage for firms

The effects of these themes are beginning to unfold in the market already, even before some of this potential regulation is signed into law.

User-centric data accumulates quickly and must be stored in large data warehouses. This leads to investors oftentimes branding companies like 3Par (with complex data storage programs) as “marketplace darlings”. Data storage is a building block for cloud computing and vendors offering these solutions will increasingly be seen as valued assets; consider the following:

• Dell just acquired Compellent for $960m or 6.5x revenue, a move that again underscores strong valuations for storage software firms
• A recent PCWorld articled noted that data center server capacity is more than doubling every 24 months

In addition, security is a top concern for user-centric data storage. Market growth and opportunity among security focused vendors is equally robust:

• Intel’s purchase of McAfee for $6.8 billion or 3.4x revenue shows potentially high multiples for security companies
• Social sites like Facebook are increasing security controls for user data in the wake of exposed data leaks
• Because of WikiLeaks, the US Department of Defense banned users from possessing flash drives and CDs while on premise in secured network facilities

The growing emphasis by vendors on verticals solutions makes this an even bigger topic – a single failure point or overlooked compliance metric can lead to massive sector-centric data leaks, as the very recent attack against entertainment website Gawker shows (millions of users personal information was exposed to the web).

Our ongoing research and advisory work across the GRC and data storage spaces allows us to keep abreast of market movements and trends to provide thoughtful insight to our clients. If you’re interested in learning more, or have some perspectives to offer – we’d love to hear from you.

Have a great week.

Adam Link

Adam Link is an analyst at TripleTree covering healthcare delivery models, specializing in software and wireless health.  Follow Adam on Twitter at AdamJLink or email him at alink@triple-tree.com.

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Beyond Substance Abuse: Drug Safety Becoming a Major Health Concern

According to fda.gov, the Human Drugs Program monitors over 10,000 currently marketed drugs in the U.S.  According to the Centers for Disease Control (CDC), prescription drug spend in 2008 doubled from the previous decade as 10% of Americans now use five or more prescription drugs.

It’s not controversial to assert that drug information, education and compliance is a huge, complex and important issue confronting the healthcare landscape.

Given this complexity, it has become exceedingly difficult for physicians to track potential adverse reactions to drugs and maintain appropriate antibiotic prescriptions, particularly when they are diagnosing or administering care at the patient bedside.

Below is some backdrop and perspective on why TripleTree is following this so closely:

• The FDA currently tracks adverse drug events through a post-marketing surveillance program, compiling the results in their adverse event reporting system (AERS). While this is helpful to identify black box warnings, it is not designed to help the physician stay up to speed with new medical knowledge.
• The issues surrounding the use of prescription drugs are most severe in the hospital setting where patients are vulnerable to unforeseen interactions or medical errors that take place during the medication use process.
  • Many hospitals today are fighting these challenges pre and post-event, using clinical informatics tools that focus on reducing errors in prescribing or retroactively treating patients who have experienced an adverse event.
  • Unfortunately most events take place during the “monitoring stage” of the medication use process, when the adverse effects are most difficult to catch. For an outline of the five stages of the medication use process, see U.S. Pharmacopeia.
• Few hospitals have a system in place to monitor drug use during the patients’ stay.  According to a study conducted at the University of California, only one third of CA hospitals are using tech-enabled surveillance tools to help identify infections and those that did saw significant improvements in infection control practices and patient outcomes.
• Appropriate antibiotic use, known as antimicrobial stewardship, has been in the spotlight lately as the failure of antibiotics to effectively treat certain strains of bacteria becomes a more acute concern. Even with the constant influx of new drugs, many modern antibiotics have been so heavily (and often inappropriately) used that bacteria have developed resistance and rendered them ineffective.

For physicians who are not accustomed to employing clinical data and evidence-based guidelines for real-time decision making at the point of care, a change to incorporate drug safety at the point of care could been seen as a disruption to their workflow and very costly. However, the ramifications for ignoring adverse drug events (and increasing patient deaths) in the face of reform are equally concerning.

While the American Recovery and Reinvestment Act is oriented around the interoperability of healthcare data, significant hurdles exist to stimulate provider adoption.   TripleTree is paying close attention to the innovative vendors who offer clinical informatics technologies, decision support tools and patient surveillance systems.  These tools are bending the cost curves, and patient safety concerns, of drug safety enough to encourage physicians to adopt point of care solutions and will play a key role as health reform evolves.

We’d be interested to know what you think – have a great week!

Emma Daugherty

Emma Daugherty is an Analyst at TripleTree covering the life sciences sector with a focus on provider technologies and patient safety.  You can contact her at edaugherty@triple-tree.com.

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