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The Next Generation of Entrepreneurs

When I was 13 years old, the Altair 8800 appeared on the cover of Popular Electronics.   By 16, I was building enough hardware and software that I achieved the Malcolm Gladwell 10,000 hours of competency by age 18.     By 19, I founded a company that produced tax calculation software for the Kaypro, Osborne, and new IBM PC.   Every week in the Silicon Valley of the early 1980’s brought a new startup into the nascent desktop computer industry.

To me, we’re in a similar era – a perfect storm for innovation fueled by several factors.  Young entrepreneurs are identifying problems to be rapidly solved by evolving technologies in an economy where existing “old school” businesses are offering few opportunities.

This morning, I lectured to an entire classroom of MIT Sloan school entrepreneurs .   Today the Boston Globe published articles about the Harvard Innovation Lab and the Mayor’s efforts to connect entrepreneurial students with mentors.

Tonight I’ll introduce a Harvard Medical School entrepreneurial team at the Boston TechStars event.

This pace of innovation reminds of that time 30 years ago when Sand Hill Road was just beginning its evolution to the hotbed of venture investing it is today.

Who are these new entrepreneurs and what kind of work are they doing?   Tonight I’ll be introducing Lissy Hu and Gretchen Fuller.

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Beacons: Beaming EKG Results to Emergency Departments

I grew up watching the Star Trek television series and was always intrigued by the amazing technology that included phasers, warp speed, cloaking devices and the transporter – the fastest (and coolest) way of getting from point A to point B!  “Beam me up Scotty” still comes to my mind as the iconic phrase that promises fast and immediate action in the most dire of circumstances.

Today, the San Diego Beacon Community is implementing our own “beaming” technology with dramatic results.  We are using health information technology to electronically transmit electrocardiograms (EKGs) from ambulances to hospital emergency departments to ensure faster and better coordinated care for emergency cardiac patients.  When a patient demonstrates symptoms of a heart attack, getting the right information quickly to a cardiac specialist is critical.

“Beaming” the EKGs and other relevant health information to the hospital while the patient is still miles away allows for the patient’s condition to be appropriately assessed by specialists before he or she arrives.  Then, immediate treatment can be provided as soon as the patient arrives at the hospital.  The sooner blood flow is restored to the heart muscle, the better the outcomes for surviving a heart attack.

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Does America Really Want Change?

Twenty years ago, in order to keep presidential candidate Bill Clinton’s campaign on message, James Carville hung a sign in their “war room” that read:

  1. Change vs. more of the same
  2. The economy, stupid
  3. Don’t forget health care

While point number two swiftly entered the national vernacular, the other two slogans have equally influenced the U.S. political landscape, especially since 2008. Four years ago, the country was on the precipice of transformation. Meaningful change was promised, and opportunities for significant, long-lasting reforms were abundant. Americans, particularly the millennial generation, turned out in record numbers to vote, and hope for the future was palpable. America, like a patient suffering from a debilitating chronic disease, seemed finally ready to put in the time and do the hard work to get healthy before that fatal heart attack occurred. After decades of procrastination, we heeded Carville and health care system overhaul became a top priority.

Pause: The State of America’s Health

Obesity prevalence increased 137 percent over 20 years, from 11.6 percent to 27.5 percent of the population. In 2008, more than one-third of children and adolescents were overweight or obese. The medical care costs of obesity in the U.S. totaled about $147 billion in 2008 dollars.

Diabetes has almost doubled in prevalence since 1996, rising from 4.4 percent to 8.7 percent of the adult population. For children, the prevalence of Type 2 diabetes increased 21 percent from 2001-2009, while Type 1 diabetes rose 23 percent. Estimated total diabetes costs in the U.S. were $174 billion in 2007.

Asthma diagnoses grew by 4.3 million from 2001 to 2009, and 9.4 percent of children currently have asthma. Asthma costs in the U.S. grew from about $53 billion in 2002 to about $56 billion in 2007.

Developmental Disabilities prevalence increased 17.1 percent over the last 12 years. The prevalence of autism increased 289.5 percent, and the prevalence of ADHD increased 33 percent. Autism alone is estimated to cost the U.S. $137 billion per year.

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The Mentalists

Obama’s most significant healthcare-related accomplishment this year may well have been his campaign’s demonstration of the effective use of analytics and behavioral insight – strategies that also offer exceptional promise for the delivery of care and the maintenance of health.

For starters, of course, there’s the widely-reported “big data” success of the Obama campaign.  In unprecedented fashioned, they collected, mined, analyzed, and actioned information, microtargeting voters in a remarkably individualized fashion.

Imagine if healthcare interventions could be personalized as effectively (or pursued as passionately).

Another example:  according to the NYT, the Obama campaign hired a “dream team” of behavioral psychologists to burnish their message and bring out the vote, using a range of techniques the field has developed over the years.

According to the article, the behavioral experts “said they knew of no such informal advisory committee on the Republican side.”

This idea of focusing intensively on behavior change is without question an idea whose time has come.

Earlier this year, for instance, a colleague (with similar training in medicine, molecular biology, and business) and I were surveying the biopharma landscape, and were struck by the extent to which classic biology hasn’t (yet) delivered the cures for which we had hoped; physiology turns out to be extremely complicated, and people, and communities, even more so.

We were also struck by the remarkably low adherence rates for many drugs, abysmal whether you look at this from the perspective of clinical care or commercial opportunity (imagine if Toyota lost half their cars on the way to the dealership).
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The Next Digital Health IPO?

Practice Fusion, Castlight or ZocDoc will be the next digital health IPO. That’s according to a survey of over 100 innovative digital health entrepreneurs, conducted by my firm, InterWest Partners.

Nearly one third of respondents said Practice Fusion was most likely to be the next digital health IPO with approximately 20% of entrepreneurs voting for Castlight and ZocDoc, respectively.    Among the trio, all three have been impressive generating media coverage and raising money (collectively raising over $320m in the last 2 years alone with valuations ranging from $450m to upwards of three quarters of a billion dollars), in addition to having some of the most visionary leaders in the space.

Contrary to popular belief that digital health is primarily about the next iPhone app for weight loss, sleep or exercise, it was interesting to note that all of the leading “IPO” candidates in our survey have B2B models.  This is consistent with an insightful RockHealth report ( which found that nearly 80% of digital health companies have B2B models.   Future growth in this category is likely to continue as the leading healthcare accelerators such as RockHealth, BluePrint Health and Healthbox are all seeing more applications from B2B companies.

The responses to the IPO question reflect an interesting industry trend.  Though often classified as “B2B”, many of the leading digital health companies are really B2B2C – meaning that without the C there is no B2B.   Pricing transparency tools (Castlight), scheduling platforms (ZocDoc), employer based wellness programs, medication adherence solutions – they all must find a way to engage the end user or they won’t be purchased by the employer, physician, healthplan, hospital, or pharma company.    And though it’s impossible these days to sit through a day of pitches without hearing the phrase “consumer engagement” twenty times, I’m excited that people are starting to ask more of the right questions.  Why will someone want to use this?  Does it really solve a true need?  Is the product easy to use, intuitive, and fun?Continue reading…

Set National Standards for Health Information Systems

A recent report issued by the Institute of Medicine – titled “Best Care at Lower Cost” – calls for a dramatic transformation in health care delivery, saying “America’s health care system has become far too complex and costly to continue business as usual.” Its first recommendation (“The Digital Infrastructure”) focuses on the importance of health information systems and highlights a crucial aspect of their development that is too often overlooked – the issue of interoperability. Will the individual systems that are created be able to work together efficiently?

It’s an enormously important issue for health care broadly, and it will determine how effective those systems can be on a national level. At present, health care providers across the country are creating or enhancing their health information systems. In some cases, like ours at Intermountain Healthcare, those systems have a long history; we began instituting electronic medical records 40 years ago. Others are early in the journey. But all are being developed essentially for their own internal needs. Interoperability is low on the priority list.

Five health care providers who have been in the forefront of using electronic medical records have been collaborating on the creation of a Care Connectivity Consortium to pioneer the effective connectivity of electronic patient information across their systems. Those five are Intermountain Healthcare (based in Utah), Geisinger Health System (Pennsylvania), Group Health Cooperative (Washington), Kaiser Permanente (California), and Mayo Clinic (Minnesota). But even that ground-breaking effort, in which I’m heavily involved, will result in a multi-provider network, not a national one.

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Campaign Promises

I had an amazing day on Friday.  It started with a phone call from a local physician, one who I have never seen as an outside-the-box thinker, who was very excited about what I am doing.  He feels much of the same frustrations as me, and thinks my approach to the problem is intriguing.  He asked me lots of questions – many of the ones I keep asking myself, actually – and had some good thoughts on the answers to some of these questions.  Apparently, there is quite a buzz around town about what I am doing, and most of that buzz is positive.  That’s quite reassuring.

Then I got an email from a local business, asking me if I would consider being the doctor for their 100+ employees.  I spoke to them on the phone and was very much encouraged by their insight and enthusiasm.  They have seen their costs of insuring their employees go up dramatically over the past few years (as have all businesses, including mine), and are looking for a way to tame this cost.  They were even more excited about the possibility of working with me when I pointed out two things they didn’t realize: 1. That a contract with my type of practice would, along with a high-deductible insurance policy, qualify them for the requirements of the ACA (thus avoiding the fines), and 2. My focus on care on the continuum (care outside of the office between visits) would have a potentially big impact on reducing absenteeism.  This is exactly what I was dreaming about a few months back when crystalizing the ideas of my practice, so the reality of having an employer contact me about this is incredible.

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Did the Election Save ObamaCare?

The morning after Tuesday’s vote, there is one thing every commentator agreed on. The election of Barack Obama guaranteed that his signature piece of legislation — health reform — can now go forward. Republicans are powerless to stop it.

Yet there is something all these commentators are overlooking. There are six major flaws in ObamaCare. They are so serious that the Democrats are going to have to perform major surgery on the legislation in the next few years, even if all the Republicans do is stand by and twiddle their thumbs.

Here is a brief overview.

ObamaCare is not paid for. At least it’s not paid for in any politically realistic way. As is by now well known, the legislation will lower Medicare spending over the next 10 years by $716 billion in order to fund health insurance for young people. This reduction will primarily consist of lower payments to physicians, hospitals and other providers — reductions that are so severe that they will seriously impair access to care for senior citizens.

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Could Same-Sex Marriage Improve the Nation’s Health?

On election night voters in Maryland, Maine and Washington state voted in favor of same-sex marriage, the first time marriage equality has been approved by popular vote. Although same-sex unions have been legalized in six states and the District of Columbia by lawmakers, the voting public have consistently rejected passing approval for same-sex unions. This is clearly a tipping point in the national discourse over the rights of gays and lesbians to marry.

However, although recent estimates suggest that more than half of the American population approves of same-sex marriage, there is still much to be done before equality is achieved. Even with all the good news, more than 30 states have approved constitutional bans on same-sex marriage.  To date the debate over same-sex marriage has centered on equality – that my right to marry should be equal to the right of a Kardashian to marry anyone from the NBA. But is this more than a question of equity? Marriage provides legal protections, affords access to services and provides a source of social support – all of which may be protective of health. There is strong evidence that providing everyone with the right to marry is not only a question of equity, it is a pathway to improving the nation’s health.

Data from a range of studies confirm that marriage is good for you: in virtually every category, ranging from violent deaths to cancer, the unmarried are at far higher risk than the married. Marriage provides companionship, a social support system, someone to make you go to the doctor. “Marriage is sort of like a seat belt when it comes to improving your wellbeing,” says Dr. Linda Waite, Professor of Sociology at the University of Chicago and author of The Case for Marriage.

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Tool Kit: Why Portals Don’t Work Very Well

In it’s broadest definition, a portal is a doorway from one place to another.  On the internet, a portal is a site that has links to other sites.  In health care IT, the term refers to a feature of an electronic medical record that gives patients the ability to see parts of their medical record.

In each of these definitions there are two important things that are consistent:

1. To access what’s on the other side, a person must find the portal.

2. What is on the other side of the portal is not controlled by the person using it.

This is very important in the area of my concern: health care IT.  Our old friend “Meaningful Use” includes the requirement that the EMR system must “Provide patients the ability to view online, download, and transmit their health information.”

In case you’ve forgotten (deliberately or not), “Meaningful Use” is a program to encourage use of EMR by doctors, paying them real cash money if they meet the prescribed requirements.  The main way EMR vendors accomplish this provision is through the use of a “patient portal.”

So are portals the answer to patient engagement via online tools?  Are they the answer to e-Patient Dave’s demand to “Gimme My Damn Data?” I don’t think so.  They may be a step in the right direction, giving people some of the information they need, but there is still a wide gulf between giving someone a cup of water and ending a drought.

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