In health technology, an enthusiasm gap between startups and doctors


Dr. Eric Topol demonstrates GE's Vscan portable ultrasound at the mHealth Summit in National Harbor, MD on Monday. (Courtesy of mHealth Summit)
December 6, 2011

Dr. Eric Topol is a cardiologist who doesn’t use a stethoscope. As a keynote speaker at a mobile-health convention near Washington, Topol took the stage Monday and performed an echocardiogram on himself using an iPhone. He later reached under his shirt and gave himself an ultrasound using a hand-held device called a Vscan and some hotel-room lotion (he forgot his ultrasound gel).

“I once diagnosed a patient who was having a heart attack on an airplane,” Topol said. He explained his passion for portable health devices to the audience: “You’re familiar with digitalizing books and magazines, but now we’re talking about digitizing man, and that’s the future of medicine.”

Topol and the other presenters at this week’s mHealth Summit predict that health care in coming years will be highly personalized, ultra-efficient and will most likely involve smart phones and tablets. That is, of course, only if mobile health entrepreneurs can get health care providers to embrace the new technologies, which so far they have been slow to do.

During his presentation, Topol clicked through slides of potential apps and devices — some already in existence — that would help patients monitor health conditions remotely. There are contact lenses that can check for glaucoma symptoms, a photo app that can track changes in a suspicious mole and small test strips that can analyze saliva droplets for disease.

Health and Human Services Secretary Kathleen Sebelius, another keynote speaker, described a future “where you can take a video of a rash on your foot and get a diagnosis later that afternoon without making a doctor’s appointment....Or get a calorie estimate of how many calories are on your plate by snapping a picture.”

Driving down costs

Sebelius said mobile apps can bridge the information gap between doctors and patients and help patients take better charge of their health.

She also put bluntly why the Obama administration supports growth in this field:

“In a country with some of the best medical care in the world...Americans still live sicker and die sooner than many of the people in other nations,” Sebelius said. “We’re talking about taking the biggest technology breakthrough of all time and using it to address our greatest national challenge.”

Indeed, the field is ripe terrain for startup companies: A November Pew Internet & American Life Project report found that 11 percent of American adult cell phone users have downloaded an app to help them monitor health, and the wireless monitoring device industry in the U.S. has doubled in the past four years, to a current value of $7.1 billion.

“This space has legs,” Topol said in an interview. “There’s interest in this [from venture capitalists], and it’s exploding.”

In October, for example, Gary and Mary West, founders of the West Wireless Health Institute in San Diego, created a $100 million investment fund to provide capital for companies that create “cutting-edge health care technologies and services that offer the potential to lower the cost of health care.”

Health Interlink is a startup that makes software to help physicians and hospitals monitor patients between visits or after discharge. The Health Interlink software connects a Samsung Galaxy tablet to medical devices, like pulse-rate monitors or scales, in order to collect and analyze patient data. The physician can then monitor the readings and can catch worrisome trends before the patient ends up in the emergency room — or so the thinking goes.

Then there are devices that work directly on a smart phone, like the AliveCor, the iPhone app that can take an electrocardiogram when the user touches a credit card-sized sensor that comes with the app itself. Though it’s already available in Europe (it’s what Topol used on himself at the summit), it has not yet been approved by the FDA for use in the U.S.

There’s also a market for apps that aren’t quite as clinical. Livn’it is an app that helps its users develop healthy daily habits like walking or flossing. Developed by Michael Kim, a former director with XBox LIVE, and his clinical psychologist wife, the app draws on elements of social gaming by encouraging the user’s Facebook friends to “cheer on” his or her positive behaviors.

Kim said the app might be good for someone who has a smart phone but can’t afford a therapist or personal trainer, but that it also might appeal to die-hard gamers who “might want to try a more meaningful game.”

So why haven’t foot-rash videos and exercise games already trumped physician office visits, with their manila folders and attendant inconveniences?

Incentivizing innovation

First of all, doctors are somewhat set in their ways. Topol called the medical community “ossified,” and Sebelius noted that as personal tech has revolutionized virtually every other industry, “healthcare has stubbornly held on to its cabinet and hanging files.”

The Centers for Disease Control and Prevention estimates that in 2010 only about 25 percent of physicians reported having electronic medical record systems that met basic criteria, and just 10 percent reported having a “fully functional” system.

Moreover, doctors have few incentives to adopt tech innovations. Most medical practitioners aren’t looking to find cheaper alternatives to follow-up visits and extra procedures because under the current payment structure, doctors are reimbursed by health insurance companies for how many services they perform, not by how well they perform them.

“We have a medical system by the yard,” Topol said in an interview. “The more you do, the more you get.”

In another panel, Dr. Stephen Ondra, a senior policy adviser in the Department of Veterans Affairs, likened the current reimbursement system to the “piecework” performed by his grandmother, who worked in a pants factory.

However, Ondra said there are provisions in the Affordable Care Act that may help. The health care law provided for Accountable Care Organizations, which are networks of doctors that manage all the care for Medicare patients and get incentives for keeping costs down. In 2015, the Centers for Medicare and Medicaid Services will begin using “a value-based payment modifier” to pay physicians based on the quality of care they provide versus how much cost they incur.

That could create a demand for cheaper devices like the AliveCor, which costs about $100 in European markets. (A single traditional electrocardiogram can cost $50). And the Vscan portable ultrasound monitor, which Topol also demonstrated on stage, goes for $7,900 — a fraction of the cost of a full-size machine.

Starting in October of next year, hospitals will also be financially penalized for readmitting Medicare patients whose relapses were preventable.

“Whereas previously hospitals might have looked at someone who has congestive heart failure as the gift that keeps on giving, they will begin to look at them as someone who you’ve got to manage in order to keep them from coming back,” West Wireless Health Institute chief executive Donald Casey said during one panel.

The software to monitor patients remotely by Health Interlink costs a hospital about $2,000, but it pays for itself — and then some — if it prevents even a single $10,000 hospital readmission, a company spokesperson said.

There may be some resistance to adopting new technology among medical professionals at first, Ondra said, but the move is inevitable if skyrocketing health care costs are ever to be curtailed.

“The only thing more frightening than changing the business model,” he said, “is the the direction the current model is going in.”

Read our follow-up post featuring your comments.

E-mail Olga Khazan here. Follow Olga and OnSmallBiz on Twitter.

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Dr. Eric Topol demonstrates GE's Vscan portable ultrasound at the mHealth Summit in National Harbor, MD on Monday. (Courtesy of mHealth Summit)
December 6, 2011

Dr. Eric Topol is a cardiologist who doesn’t use a stethoscope. As a keynote speaker at a mobile-health convention near Washington, Topol took the stage Monday and performed an echocardiogram on himself using an iPhone. He later reached under his shirt and gave himself an ultrasound using a hand-held device called a Vscan and some hotel-room lotion (he forgot his ultrasound gel).

“I once diagnosed a patient who was having a heart attack on an airplane,” Topol said. He explained his passion for portable health devices to the audience: “You’re familiar with digitalizing books and magazines, but now we’re talking about digitizing man, and that’s the future of medicine.”

Topol and the other presenters at this week’s mHealth Summit predict that health care in coming years will be highly personalized, ultra-efficient and will most likely involve smart phones and tablets. That is, of course, only if mobile health entrepreneurs can get health care providers to embrace the new technologies, which so far they have been slow to do.

During his presentation, Topol clicked through slides of potential apps and devices — some already in existence — that would help patients monitor health conditions remotely. There are contact lenses that can check for glaucoma symptoms, a photo app that can track changes in a suspicious mole and small test strips that can analyze saliva droplets for disease.

Health and Human Services Secretary Kathleen Sebelius, another keynote speaker, described a future “where you can take a video of a rash on your foot and get a diagnosis later that afternoon without making a doctor’s appointment....Or get a calorie estimate of how many calories are on your plate by snapping a picture.”

Driving down costs

Sebelius said mobile apps can bridge the information gap between doctors and patients and help patients take better charge of their health.

She also put bluntly why the Obama administration supports growth in this field:

“In a country with some of the best medical care in the world...Americans still live sicker and die sooner than many of the people in other nations,” Sebelius said. “We’re talking about taking the biggest technology breakthrough of all time and using it to address our greatest national challenge.”

Indeed, the field is ripe terrain for startup companies: A November Pew Internet & American Life Project report found that 11 percent of American adult cell phone users have downloaded an app to help them monitor health, and the wireless monitoring device industry in the U.S. has doubled in the past four years, to a current value of $7.1 billion.

“This space has legs,” Topol said in an interview. “There’s interest in this [from venture capitalists], and it’s exploding.”

In October, for example, Gary and Mary West, founders of the West Wireless Health Institute in San Diego, created a $100 million investment fund to provide capital for companies that create “cutting-edge health care technologies and services that offer the potential to lower the cost of health care.”

Health Interlink is a startup that makes software to help physicians and hospitals monitor patients between visits or after discharge. The Health Interlink software connects a Samsung Galaxy tablet to medical devices, like pulse-rate monitors or scales, in order to collect and analyze patient data. The physician can then monitor the readings and can catch worrisome trends before the patient ends up in the emergency room — or so the thinking goes.

Then there are devices that work directly on a smart phone, like the AliveCor, the iPhone app that can take an electrocardiogram when the user touches a credit card-sized sensor that comes with the app itself. Though it’s already available in Europe (it’s what Topol used on himself at the summit), it has not yet been approved by the FDA for use in the U.S.

There’s also a market for apps that aren’t quite as clinical. Livn’it is an app that helps its users develop healthy daily habits like walking or flossing. Developed by Michael Kim, a former director with XBox LIVE, and his clinical psychologist wife, the app draws on elements of social gaming by encouraging the user’s Facebook friends to “cheer on” his or her positive behaviors.

Kim said the app might be good for someone who has a smart phone but can’t afford a therapist or personal trainer, but that it also might appeal to die-hard gamers who “might want to try a more meaningful game.”

So why haven’t foot-rash videos and exercise games already trumped physician office visits, with their manila folders and attendant inconveniences?

Incentivizing innovation

First of all, doctors are somewhat set in their ways. Topol called the medical community “ossified,” and Sebelius noted that as personal tech has revolutionized virtually every other industry, “healthcare has stubbornly held on to its cabinet and hanging files.”

The Centers for Disease Control and Prevention estimates that in 2010 only about 25 percent of physicians reported having electronic medical record systems that met basic criteria, and just 10 percent reported having a “fully functional” system.

Moreover, doctors have few incentives to adopt tech innovations. Most medical practitioners aren’t looking to find cheaper alternatives to follow-up visits and extra procedures because under the current payment structure, doctors are reimbursed by health insurance companies for how many services they perform, not by how well they perform them.

“We have a medical system by the yard,” Topol said in an interview. “The more you do, the more you get.”

In another panel, Dr. Stephen Ondra, a senior policy adviser in the Department of Veterans Affairs, likened the current reimbursement system to the “piecework” performed by his grandmother, who worked in a pants factory.

However, Ondra said there are provisions in the Affordable Care Act that may help. The health care law provided for Accountable Care Organizations, which are networks of doctors that manage all the care for Medicare patients and get incentives for keeping costs down. In 2015, the Centers for Medicare and Medicaid Services will begin using “a value-based payment modifier” to pay physicians based on the quality of care they provide versus how much cost they incur.

That could create a demand for cheaper devices like the AliveCor, which costs about $100 in European markets. (A single traditional electrocardiogram can cost $50). And the Vscan portable ultrasound monitor, which Topol also demonstrated on stage, goes for $7,900 — a fraction of the cost of a full-size machine.

Starting in October of next year, hospitals will also be financially penalized for readmitting Medicare patients whose relapses were preventable.

“Whereas previously hospitals might have looked at someone who has congestive heart failure as the gift that keeps on giving, they will begin to look at them as someone who you’ve got to manage in order to keep them from coming back,” West Wireless Health Institute chief executive Donald Casey said during one panel.

The software to monitor patients remotely by Health Interlink costs a hospital about $2,000, but it pays for itself — and then some — if it prevents even a single $10,000 hospital readmission, a company spokesperson said.

There may be some resistance to adopting new technology among medical professionals at first, Ondra said, but the move is inevitable if skyrocketing health care costs are ever to be curtailed.

“The only thing more frightening than changing the business model,” he said, “is the the direction the current model is going in.”

Read our follow-up post featuring your comments.

E-mail Olga Khazan here. Follow Olga and OnSmallBiz on Twitter.

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