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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…

HIT Newser: A Setback for MyMedicalRecords

Jan 12, 2015• 2

By MICHELLE RONAN NOTEBOOM

There’s No Place Like Epic’s Home

Epic reveals plans for a fifth campus, which is slated to include half a million square feet of office space and pay homage to literary classics like “Charlie and the Chocolate Factory” and “The Wizard of Oz.”

A Setback for MyMedicalRecords

A US District Court rules against MyMedicalRecords in its patent case against Walgreens, Quest Diagnostics, and others. MyMedicalRecords, a company that many label a patent troll, contends its patents covered a method of providing online PHRs in a private, secure way. However, a judge ruled that “the concept of secure record access and management, in the context of personal health records or not, is an age-old idea,” and is therefore abstract.

Despite the setback, I doubt MyMedicalRecords will stop demanding organizations to pay up or risk facing a lawsuit. I predict they’ll make some tweaks to their business plan, such as focusing only on organizations with not-quite-so-deep pockets that are willing to settle without a fight.

What Has $564 million Bought Us?

Sens. Lamar Alexander (R-TN), Richard Burr (R-NC), and Mike Enzi (R-WY) ask the General Accounting Office to review the ONC-funded health information exchanges to determine what exactly the exchanges created with the government’s $564 million in grant money.

It’s a valid concern, given the significant number of providers and regions still lacking electronic exchange capabilities and the millions that have been spent.

Physicians Reject Stage 2 Attestation

Fifty-five percent of physicians say they won’t attest for Stage 2 MU in 2015, according to a SERMO survey of about 2,000 physicians. Respondents cite several reasons for not attesting including financial concerns, difficulty engaging older patients, and lack of software usability.

Given the lackluster Stage 2 attestation numbers so far, the findings are not particularly surprising. It will be interesting to see what CMS and ONC intend to do in the face of the overwhelming evidence that many providers simply don’t think it is worth the effort.

On To Stage 3

The Office of Management and Budget is currently reviewing the proposed Stage 3 MU rules and will likely publish them in February. CMS states that Stage 3 will include changes to the reporting period, timelines, and structure of the program, including a single definition of Meaningful Use. CMS also adds that “these changes will provide a flexible, yet clearer, framework to ensure future sustainability of the EHR program and reduce confusion from multiple stage requirements.”

Can’t wait to see what is included. And, I can’t help but be a little amused that it’s been six years since the passage of the HITECH legislation and we are just now getting a definition for “Meaningful Use.”

Show Me the Money

Allina Health and Health Catalyst sign a $100 million definitive agreement to combine technologies, clinical content, and front-line personnel.

Rush University Medical Center will implement Merge Healthcare’s cardiology PACS.

Healthcare operating system platform provider Par80 closes $10.5 million in Series A funding led by Atlas Ventures, Founder Collective, and CHV Capital.

Health analytics provider Apervita, formerly knowns as Pervasive Health, completes an $18 million Series A round of funding led by GE Ventures and Baird Capital.

Teledermatology provider PocketDerm raises $2.85 million from an undisclosed investor.

Caremerge, developers of a care coordination platform, raises $4 million in a second round of funding. Investors include Cambia Health Solutions, GE Ventures, Arsenal Health, and Ziegler-LinkAge Longevity Fund.

Getting to Pareto Optimality from Sermo–The Dan Palestrant interview

Jan 12, 2015• 2

By MATTHEW HOLT

Daniel Palestrant was one of the first big stars of the early Health 2.0 movement, and he was often at Health 2.0 conferences and on THCB. He founded the biggest (US based) online doctor network Sermo in 2005, rode it like a rocketship, and then left with little explanation in late 2011. Rumors swirled about the company, then it was bought by WorldOne, while Palestrant (and colleague Adam Sharp) was seen in a series of photos with a cutout of an obscure economist. He then seemingly vanished. Now he’s back, and the company named for that economist, Par8o, just announced a funding round of $10.5m and a series of impressive clients.

But what happened at Sermo? And how did that get him to Par8o? I met Dan for a in-depth reminiscence. But briefly in his words; all the investors (including him) in Sermo were happy with the WorldOne buyout; what he learned from the ACA was the inspiration for Par8o; and, he’s now building the underpinning health care operating system. We’ll have more later this week, but watch our catch up.

Why Can’t someone Give Me the Perfect Managed Personal Health Record (mPHR)?

Jan 11, 2015• 14

By ALAN PITT, MD

I’m not as scared of dying as I am of growing old, Ben Harper, Glory and Consequence

Whether we admit it or not, most of us are afraid of growing old. There is a sense of loss, of youth and vigor, coupled with the burden of managing your health in relative isolation. Although as a country we would like to think that we are each responsible for our own care, most of us as individuals would prefer for someone to be there, helping us through our time of need. Years ago when I was advising one of the Presidential hopefuls regarding a healthcare platform, I suggested that the campaign should be propose that individual was responsible for their own health, but as a country we would partner to provide the tools for the individual to succeed. Now, almost a decade later, we are not much closer to this goal.

Personal Health Records (PHR) were thought to be the answer. These records differ from more traditional EMR in that they are owned by the patient and aggregate information from multiple sources to give a complete picture of the patient. For example, they might include clinic visits from multiple providers, hospitalizations and updates on an exercise program. Literally billions were spent on PHRs by the likes of Microsoft (HealthVault) and Google. Both efforts were failures with thousands (in the single digits) rather than the expected millions of enrollees. As noted by David Shaywitz, healthcare is a negative good, something viewed more with resentment than in anyway positive. And that extends to things that keep us healthy. To interact with your health means you are imperfect, you are mortality.

“I Smoke and I Am Not Going To Quit. My Physician Says I Need a CT scan. Do I?”

Jan 7, 2015• 5

By ROBERT McNUTT, MD

Case:

I get asked by many who smoke or who have just quit smoking for help making the decision to have/not have a CT scan to screen for lung cancer. The man responsible for the question above had been smoking his entire life, and, at age 62, he raised the question.

Screening is the term used when tests are done for patients without symptoms. The hope of screening is that a test will find lung cancer (or any other clinical situation for which screening tests are considered) early in the course of the condition so treatment may be beneficial. In the study above, 87 fewer people of the nearly 54,000 in the study died of lung cancer in the LDCT arm. In addition, the number of people dying of other conditions beside lung cancer was fewer (1526 died of other conditions in the LDCT group and 1557 in the CXR group). I did not present this data on the figure as the difference is small and it is unclear why LDCT would reduce other reasons for dying.

The harm of screening, as discussed in earlier blog posts, is that some people will have a positive test and not have cancer. This can cause worry, but in this clinical situation, additionally, the abnormalities found by the test are located in the lung. Getting to these lesions to provide assurance that cancer is not present may be dangerous and costly, and in this study, more people did die early in the LDCT arm.

Since I believe only patients can decide for their tests/treatments, a person would have to trade-off the potential 0.4% added chance of not dying of lung cancer in the future against the potential 40 fold greater chance of a false positive finding and a potential 0.24% added chance dying early or having a major complication by following a LDCT strategy.Continue reading…