Month: January 2015

Healthcare and the Second Machine Age: An Interview with Andy McAfee

Jan 15, 2015• 5

By ROBERT WACHTER, MD

Andy McAfee is the associate director of the Center for Digital Business at MIT’s Sloan School of Management. He is also coauthor (with his MIT colleague Erik Brynjolfsson) of the 2014 book, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, one of my favorite books on technology. While he sits squarely in the camp of “technology optimists,” he is thoughtful, appreciates the downsides of IT, and isn’t overawed by the hype. In the continuing series of interviews I conducted for my forthcoming book on health IT, The Digital Doctor: Hope, Hype, and Harm at the Dawn of Medicine’s Computer Age, I spoke to McAfee on August 13, 2014 in a restaurant in Cambridge, Massachusetts. I began by asking about some of the general lessons from today’s world of technology and business that have implications for healthcare.

McAfee: Our devices are going to continue to amaze us. My iPhone – it’s a supercomputer by the standards of 20 or 30 years ago. Right now, hundreds of millions of people carry a device that is about this powerful. Wait a little while. That number will become billions. And those devices will spit out ridiculous amounts of data of all forms, so this big data world that we’re already in – that’s going to accelerate.

Since data is the lifeblood of science, we’re going to get a lot smarter about some pretty fundamental things, whether it’s genomics or self-diagnosis or how errors happen. Then, because we’re putting all this power into the hands of so many people all around the world, it seems certain that the scale, pace, and scope of innovation are going to increase.

So I’m truly optimistic for the medium- to long-term. But the short-term is going to be a really interesting, really rocky time.

RW: When you say medium- to long-term, how many years before we get to this wonderful place?

AM: Don’t hold me to it. But within a decade.

Rock Health and the Search for ‘Home Screen Health App’

Jan 14, 2015• 3

By KIM KRUEGER & MATTHEW HOLT

Rock Health has been around since 2011 first as an accelerator and now as an early stage venture fund. Matthew Holt had a chance to sit down with Rock Health’s Managing Director Malay Gandhi ahead of his appearance at WinterTech to discuss how Rock Health looks at the consumer side of digital health, and what developments Rock Health thinks we’ll see in the near future.

Matthew Holt: It’s Matthew Holt with Malay Gandhi. He is the managing director of Rock Health, and has been officially for what, nearly a year or so now, Malay? Is that right?

Malay Gandhi: Since June, June of this year.

MH: So about six months. Most of us know that Rock Health was founded by Halle Tecco and Nate Gross a few years back, 2011, and probably was the first and most influential of the incubators and accelerators that target health care specifically. Perhaps you can explain a little bit about how Rock Health works. Most people know that Rock Health is a nonprofit, and that you guys do a lot in terms of stimulating the ecosystem with small events, big events, and your reports on financing and so on. But you are mainly a fund and the amount of money that you invest in your companies has been increasing from I think $20,000 in the early days to $100,000 plus recently? Could you explain how that actually works compared to other accelerators or incubators?

MG: Yeah. Essentially, the way Rock Health works is there are three big things that we do, all under our mission to support and fund entrepreneurs. We have our venture arm, which does seed investments in the companies now. We’ll write checks up to $250,000 per company, really at the seed-stage. We conduct research which we release publicly. Let’s say about four reports or so a year, as you mentioned, tracking funding, but also doing deep diving in various topical areas.

Then our third area, we host a couple of events each year. Our signature events are the Health Innovation Summit, which is for everybody; the CEO Summit, which is an event for founders and CEOs of digital health companies; and then finally, the XX Retreat, which is a women’s professional leadership group for women who work in health care.Continue reading…

Thesis-Driven Investing in Digital Health: An Interview with Rebecca Lynn

Jan 14, 2015

By KIM KRUEGER & MATTHEW HOLT

These days, record amounts of venture funding is pouring into the digital health space. Yet, that hasn’t always been the case. Matthew Holt sat down with Rebecca Lynn, a General Partner with the Canvas Venture Fund, ahead of her appearance at WinterTech to discuss the quick and explosive growth in VC interest in digital health, as well what Canvas’ thesis-driven investment strategy means for its current and growing portfolio.

Matthew Holt: This is Matthew Holt. I’m talking to Rebecca Lynn. Rebecca is a General Partner at Canvas, which is a VC fund that came out of the better-known Morgenthaler fund about a year and a half ago. Is that right, Rebecca?

Rebecca Lynn: Yes. That’s right.

MH: Rebecca has done a number of things we were just talking about offline. Her very, very first deal was in the Lending Club, she has a background in personal finance, and the Lending Club just went public, so congratulations, Rebecca.

RL: Thank you.

MH: She’s also in the last four or five years been working hard on getting up to speed in health care and now you’re more than up to speed. You’re one of the leading venture capitalist experts in health technology. So that’s obviously what we are going to talk to you about and you’re going to be on the investor panel at Health 2.0’s WinterTech which is coming up on January the 15th. Also, you are the founder of something, which I was there at the start with you called, “DC to VC” which is a group putting together venture capitalists with government officials.Continue reading…

An Equity Analyst’s Take on Health 2.0 Trends To Watch in 2015

Jan 14, 2015• 2

By HANNAH RAPP

Health 2.0 recently had a chance to talk with Steven Wardell, an equity research analyst at Leerink Partners, ahead of his appearance at WinterTech to discuss themes he’s seeing in the digital health market and what he thinks will be the trends to watch in 2015. Hear more from Wardell and other investors from Rock Health, Canvas Venture Fund, GE Ventures, and Norwest Venture Partners on investing in consumer health at WinterTech on January 15th in San Francisco.

Health 2.0: Tell us about your role as an equity research analyst covering digital health at Leerink Partners.

Steven Wardell: One of the most exciting parts of my role is I get to interpret the growing digital health landscape for the investment community. Investors want to better understand the major trends in the sector and how they are creating winners and losers in healthcare. They want to get a perspective on what the investment themes are and who the potential winners are. I’ve done deep industry research on digital health investment themes and I can help investors understand the themes and the companies that are benefiting from them.Continue reading…

Trends that Translate into Investment: Examining Consumer Health with Norwest Ventures

Jan 14, 2015• 3

By HANNAH RAPP

With JP Morgan week and Health 2.0 WinterTech converging this week in San Francisco, the digital health space will dive deep into what will characterize investment in 2015 and identify who the major players are. Health 2.0 sat down with Casper de Clercq, Partner at Norwest Venture Partners to look at some of the trends for 2015 and explore his upcoming discussion of consumer health investment at Health 2.0 WinterTech.

Health 2.0: Today we’re just going to talk a little bit about what you’ll be addressing at Health 2.0 WinterTech and just also kind of getting a better sense for your experience and your insight into the digital health investment space. I was hoping you could start with an overarching look at what your role at Norwest Venture Partners really encompasses and sort of what your day-to-day looks like for our audience.

Casper de Clercq: As co-lead of the health care practice at Norwest Venture Partners I am actively investing in health care IT, technology enabled services and medical devices. We are currently investing out of fund twelve, a $1.2 billion fund. NVP has been in business for over 50 years investing primarily in consumer software, enterprise software and health care companies. We have offices in India, Israel, and New York. Growth equity is also an important aspect of our investment activity in which we typically invest in more established companies. In the health care group, we’ve made a significant number of investments in the digital health and medical device arena. We are among the most active health care IT investors having made over a dozen investments over the last three years. The breadth if our investments aligns with the trends we all hear about. Our portfolio includes enterprise and SaaS solutions such as Health Catalyst (ERM analytics and benchmarking data for hospitals). We also invested in CareCloud (SaaS based EMR) and Cleardata (HIPAA compliant data center). We have made multiple investments in connected devices from consumers to clinical research. In the consumer health and wellness arena we invested in wearable companies Basis (acquired bv Intel) and Misfit. Continue reading…

An Open Letter to the People Who Brought Us HIPAA

Jan 13, 2015• 10

By PAUL FLETCHER-HILL

Over the last five years, the United States has undergone more significant changes to its health care system perhaps since Medicare and Medicaid were introduced in the 1960s. The Health Information Technology for Economic and Clinical Health (HITECH) Act in 2009 and the Patient Protection and Affordable Care Act of 2010 have paved the way for tremendous changes to our system’s information backbone and aim to provide more Americans access to health care.

But one often-overlooked segment of our health care system has been letting us down. Patients’ access to their own medical information remains limited. The HIPAA Privacy Rule grants individuals the right to copies of their own medical records, but it comes at a noteworthy cost—health care providers are allowed to charge patients a fee for each record request. As explained on the Department of Health and Human Services’ website, “the Privacy Rule permits the covered entity to impose reasonable, cost-based fees.”

HIPAA is a federal regulation, so the states have each imposed guidelines outlining their own interpretations of “reasonable.” Ideally, the price of a record request would remain relatively constant—after all, the cost of producing these records does not differ significantly from state to state. But in reality, the cost of requesting one’s medical record is not only unreasonably expensive; it is also inconsistent, costing dramatically different amounts based on local regulation.Continue reading…

More Evidence Obamacare is Good For White People

Jan 13, 2015• 23

By MICHAEL MILLENSON

The latest Gallup and Healthways poll doesn’t phrase it this way, but its findings that the Affordable Care Act “appears to be meeting its goal of reducing the percentage of Americans without health insurance” is more evidence Obamacare is good for white people.

In an interview with National Public Radio at the end of last year, President Obama was asked whether he and the Democrats had lost support among white voters. He denied it, comparing his share of the white vote favorably to that John Kerry in 2004 and pointing to the Affordable Care Act (ACA) as a program that benefited working-class white voters without many realizing it. I’d written much the same thing about Obamacare in a THCB blog post a couple of weeks before the 2012 presidential election. But as with other issues related to race, it’s a topic that the president has only reluctantly discussed, even when good policy is also good politics.

In response to NPR questions about race, Obama noted that some of the biggest beneficiaries of the ACA live in places like “Mitch McConnell’s state,” home to relatively few blacks or Hispanics. Coincidentally, a front page story in the print New York Times documented Kentucky’s experience with the law – which, the president wryly noted, Kentuckians do not call “Obamacare” – the same day the NPR interview aired.

Mobile App or Mobile Web? Solving the mHealth Dilemma

Jan 13, 2015

Why Technology May Not Fix The Medication Adherence Problem

Jan 12, 2015• 1

By DAVID SHAYWITZ, MD

I wish I could assign Lisa Rosenbaum’s characteristically wonderful essay in the latest New England Journal of Medicine to every twentysomething programmer in Silicon Valley planning to disrupt healthcare based on his uninformed interpretation of the problem to be solved.

Consider – as Rosenbaum does – the problem of medication adherence. As many as half the Americans prescribed medications don’t take them as recommended, even after a heart attack – despite very strong evidence of benefit in this context (namely, the prevention of a second heart attack).

At first blush, this seems like a perfect opportunity for a smart app, or a clever pill case that monitors usage and reminds forgetful patients to take their next dose. In fairness, for many patients, such technological innovation might prove impactful. Yet what Rosenbaum (a cardiologist) captures in her piece are the many reasons why patients, in the real world, deliberately choose not to take their medicines – even after a heart attack.

Some patients begin with an intrinsically negative view of medicines, and consequently tend to exaggerate potential side effects, and underestimate the likely benefits. Other patients choose not to take medicines because they don’t like to be reminded that they are sick – each pill taken to stay healthy paradoxically reinforces the concept that they are ill. Of course, many patients avoid medications because of the view that drugs are chemicals and therefore “unnatural” — in contrast to vitamins, or herbal remedies, which presumably are made only of organic goodness.

Still other patients subscribe to the view that “if it ain’t broke- don’t fix it,” and prefer to avoid medications when (as in the case of preventive care) the benefit is often imperceptible. (There seems to be less discussion of non-adherence in the context of oxycontin, for example.)

The Sunnier Side of India’s Free Market Medical Imaging

Jan 12, 2015• 11

By SAURABH JHA, MD

What would medical care be like in a genuine free market?

Nobel laureates in economics have opposing views. But does India have the answer? There, healthcare has a strong private sector: patients usually pay directly and the insurance industry is just emerging.

Milton Friedman believed that markets would work just fine in healthcare. Kenneth Arrow was not so optimistic. In his much cited opus, Arrow singled uncertainty as the key factor which distinguishes medical care from other goods and services. Uncertainty means that one doesn’t know when and how much healthcare one is going to need. Not quite the same as shopping for cereal in Waitrose.

George Akerlof felt that asymmetric information, i.e. when one side knows far more about the product, could be problematic for quality.

In Akerlof’s hypothetical market, “Market for Lemons,” which takes the example of used cars, there are “peaches” (good cars) and “lemons” (low quality cars). Buyers can’t distinguish between peaches and lemons, but know lemons exist and so offer a price that’s too low for peaches. Sellers who, of course, know their peaches and lemons, remove good cars and retain bad cars. Process continues, and there’s a downward spiral, with market progressively enriched with lemons.

Asymmetric information in a free market could lead to fall in quality and market failure. There’s asymmetric information in healthcare when buying insurance; people are more inclined to purchase when sick. Also, when the physician knows more about quality of product and its need than the patient.Continue reading…