Wireless sensors are the missing link in mobile health applications

Scanadu Scout sensorWireless sensors are an evolving missing link and a gigantic opportunity in mobile health application development and commercialization.

Markets for mobile health are developing rapidly. Personal fitness, quantified self, chronic disease monitoring, elder health monitoring, infant monitoring, acute symptom diagnosis, physical therapy, and telemedicine are a few of the segments in mobile health.

We have fast networks that cover almost all of our population in the U. S. and most developed countries. Smartphones are powerful mobile computers with vast amounts of onboard computing power and storage. If the smartphone’s capabilities are insufficient, developers can access cloud-based storage, databases, and distributed computing that can scale to address any size problem.

Because all of this technology has been developed for mass consumer markets (and because of Moore’s law), it is inexpensive – orders of magnitude less costly than a few years ago.

So we have cheap, powerful, ubiquitous computing and connectivity mostly being used for social connectivity and YouTube video watching. This powerful computer network is also increasingly being used to improve healthcare diagnosis and delivery.

Still being developed are wireless sensors to take advantage of all of that computing power. There are a number of companies pursuing commercialization of sensors and apps to enable all sorts of mobile health capabilities and functions.

Some of the sensor technologies are wearable in clothing or on the skin, some are implantable, and others are ingestible. All use low power wireless communications technology such as Bluetooth Low Energy for continuous or periodic monitoring. The first generation of sensors, like Holter monitors, recorded data for a time period and were sent to a lab for processing so a report could be generated for a physician. The new generation of sensors records continuously and sends the data in real time where a physician or even the patient can access data that has been processed by a smart application.

Physicians are beginning to be able to monitor their patients with chronic diseases in real time. Individuals active in the “quantified self” movement have more personal data than ever with which to monitor and analyze themselves. Physicians can prescribe personal diagnostics to collect data in order to make a more accurate diagnosis.

For example, Given Imaging of Israel has developed a capsule that has video recording and radio transmission capabilities. The capsule is swallowed by the patient. It then records and transmits its journey through the patient’s digestive tract. The video is reviewed by the physician to determine a preliminary diagnosis and the need for more invasive interventions like surgery.

For the Star Trek fan, Scanadu is developing a crude “tricorder”  – a disk of sensors that is placed on the forehead to measure temperature, heart and respiration rate, blood pressure, and more. The Scanadu Scout is intended for consumers, not physicians.

According to Medical Device and Diagnostics Industry, Pathfinder Software, a mobile and wireless application developer, has created a clever infographic showing various sensors and the body functions they are intended to monitor.

The sensors shown on the infographic are a mere subset of what’s currently available and in development. For example, a startup in my home city of Redmond, Washington, Heapsylon has developed sensors for “smart socks” that can measure a variety of parameters related to running gait to improve athletic performance and prevent injury.

Takeaways: There are opportunities for novel sensors to monitor and measure all sorts of body functions and parameters. There are opportunities to develop applications that gather, process and interpret sensor data for consumers and for healthcare professionals. There are opportunities to analyze aggregated sensor data to assess population health and trends. Finally, there are opportunities to develop and deploy solutions that bring low cost healthcare to underserved populations.

Read more: How Innovations Using Sensors Can Disrupt Healthcare (infographic) | MDDI Medical Device and Diagnostic Industry News Products and Suppliers.

Mobile Health Innovations – Home Monitoring of the Elderly

What might have been science fiction a few years ago is science fact today – and one on the verge of market introduction. The Fraunhofer Institute in Germany has developed miniature sensors that continuously monitor the user’s health, communicate over a secure Bluetooth protocol to a mobile device such as a smartphone, and seamlessly transmit data to a cloud-based server.

Mobile health innovations such as this have the potential to save doctor visits, money, and lives.

The sensors can measure and monitor variables such as blood glucose, lactate, and cholesterol levels, biomarkers that may indicate presence of disease processes, and can also measure heart rate and blood oxygen level. The utility of transmitting all of the data to a cloud server is that a remote physician or family member can monitor the patient from a great distance in virtually real-time and also see trends as they develop.

Additionally, smart software could integrate the sensor data and provide diagnostic alarms for conditions like heart attack or insulin insufficiency. For people living alone and with loved ones thousands of miles away, sensors like these could literally be lifesavers.

These developments have the potential to keep elderly people independent longer and to improve the health of people working in remote locations for extended periods of time. Eventually, I expect scaled-down versions of these sensors to make their way into consumer electronics. Samsung is already marketing its S-Health suite as part of the unique software on its flagship Galaxy S4 smartphone.

I’m sure these mobile sensors will get more sophisticated over time. I also expect that clinical researchers will develop new and interesting ways to use the data for monitoring and diagnosis. From the article:

Fraunhofer FIT demonstrates the first system that integrates three different sensors in one platform. A nano potentiostat measures biochemical information in a patient’s assay, e.g. glucose, lactate or cholesterol levels. A fluorescence sensor is used to detect color-marked biomarkers. A SpO2 sensor monitors heart rate and arterial oxygen saturation. A smartphone app processes the data from the three sensors and transfers them to a server. For secure data communication, a Bluetooth connection with a specifically developed protocol is used.

Takeaways: This is a glimpse into the future of telemedicine. Fraunhofer does not commercialize or market products. They license their technologies to medical device companies and related entities. I would expect Fraunhofer to already be in licensing discussions for these technologies but you should contact Fraunhofer if you and your company are in the mobile health segment.

Read more: FIT press release, 12.9.2013 – Fraunhofer FIT.

Disruptive Innovation Opportunities Created By Obamacare

Rather than debate endlessly about whether the Affordable Care Act is good or bad, staff at the Clayton Christensen Institute for Disruptive Innovation has analyzed Obamacare for entrepreneurial opportunities created by disruptive innovations in the law.

Clayton Christensen is a Harvard Business School Professor and author of The Innovator’s Dilemma (and a few more books about innovation since that business best-seller).

According to the authors, these new provisions of Obamacare are disruptive innovations:

  • Individual Mandate – adds tens of millions of new individuals to the primary care healthcare system.
  • Employer Mandate – will drive demand for new, less costly models of health insurance.
  • Accountable Care Organizations (ACOs) – provides incentives to providers to keep patients healthy rather than just paying for treatment of illnesses.
  • Wellness Programs – requires health plans to offer new preventive and self-directed care options.
  • CMS Innovation Center – an entity created outside of Medicare and Medicaid with responsibility for developing novel payment and healthcare delivery models.

 The ACA is not perfect by any means. It is also not perfect in the estimation of the Christensen Institute. Here are a few provisions of the Affordable Care Act that are likely to inhibit disruptive innovation:

  • Essential Health Benefits – mandated levels of coverage that may exceed user needs and will make it difficult to introduce low-end disruptive plans.
  • Insurance Exchanges – online marketplaces that will enable comparison shopping, but only among qualified plans, excluding some new and potentially innovative options.
  • Cost-Sharing – government subsidies will drive consumers into Silver-level plans, limiting demand once again for Bronze-level or even lower (and less costly) plans.
  • Medical Loss Ratio – requiring insurers to justify all rate increases and to spend a minimum of 80% of premiums on healthcare creates barriers to entry for new and disruptive market entrants with low or no subscriber populations.
  • Medicaid Expansion – enrolling patients with minimal or zero previous healthcare coverage into Bronze or even Silver-level plans eliminates a market that could be served by disruptive new entrants with innovative healthcare models. Instead, these patients will be driven to traditional insurers.

As noted by many people, including President Obama, the ACA does not have the ability to transform healthcare on its own. Rather, it is intended to provide incentives and opportunities for innovation in order to make healthcare more efficient, more affordable, and more accessible. In the words of the President, “We want to bend the cost curve.” The opportunities to help in and profit from the bending are present for existing players and for new market entrants.

In the framework established by Prof. Christensen, it is the new entrant that is usually disruptive because the established competitors have little incentive to innovate or to change their business models. It is also impossible for the new entrants to gain market share using the existing business models so they are forced to develop and deploy disruptive innovations.

I don’t expect the full effects of Obamacare to be evident for years, although we should see small improvements (and to be sure, some startup problems) almost immediately. There will no doubt be modifications and delays to the regulations and to implementation. It is to be hoped that some of those changes will be favorable to more, rather than less, disruptive innovation.

Takeaways: With change comes opportunity. The ACA may not be hugely popular (especially among medical device companies paying the 2.3% excise tax). Obamacare is, however, somewhat disruptive and creates new opportunities for healthcare companies.

Read more: Seize the ACA:The Innovator’s Guide to the Affordable Care Act | Christensen Institute.

Fundraising advice for medical device startups – 7 tips for angel funding, 3 more for VC funding

Not that this advice is any guarantee of success in fundraising but it’s fun to read what an angel investor and a VC fund manager have to say about how startups approach them, position themselves, and make their pitches.

Both articles are from MedCity News and were written at AdvaMed 2013. The angel investor article is a brief interview with Allan May, the founder and chairman of Life Science Angels who spoke at the Angel Investment Forum. The VC advice comes from Paul Grand, managing director at Research Corporation Technologies Ventures, a life sciences firm focused primarily on medical devices.

For startups fundraising from angel investors,

  • Your intellectual property (IP) may be the most important indicator of valuation and whether you will be successful in your funding quest. Investors need to plan an exit before they invest. Because the most likely exit is via acquisition by a larger medical device company, and medical device companies hoard patents like misers, it’s in everyone’s interest to have the strongest possible IP portfolio.
  • Unless you have a successful startup track record, a stellar team, and potential for a very large exit in 3-5 years, avoid VCs and focus on angel investors. They are willing to invest in smaller, less perfect deals than VCs.
  • Whether you want it or not and whether you like it or not, expect your investors to take a personal interest in your startup and the way you run it. That means lots of phone and face time giving updates and answering questions…and listening to advice.
  • Because angel investor consolidation has become the norm in raising Series A and beyond, investors will know each other. They won’t invest with others they don’t like, trust, or respect. Same holds for your board members – choose them carefully as they are a direct reflection on you.
  • Mr. May also said “This isn’t about picking technologies, it’s about picking people.” My experience suggests that for most early stage entrepreneurs, your technology qualifies you for consideration while your reputation, track record, and interpersonal skills can usually disqualify you.
  • As for how much money you should raise, “The amount of money you should raise is the smallest amount of money that can have the biggest impact on your valuation in the shortest period of time.” That’s a cute way of saying it’s easier to raise the next round at an increased valuation…because you executed your plan and achieved your goals.
  • This last bit of advice is my favorite and probably the most practical in the interview:  Get someone who knows the angel investor to take the business plan to them. . . “Getting into the pile [of business plans] is not a success.”

From the VC fundraising perspective,

  • Be sure to research the VC firm and the partner before the pitch and adjust appropriately. Every VC is different. Do your homework online and through your network. If you are at the level of pitching to VCs, there should be no surprises.
  • Make sure your startup team has the right experience and is correctly sized. These days, you can run a virtual or lean company a long way toward commercialization without expensive full-time executives. There are plenty of freelancers, contractors, and consultants ready and eager to help…”at the beginning, you just need the founder and the engineers…”
  • If all you have is an idea and technical/clinical skill you should wait a bit before approaching VCs. You are unlikely to get a signed nondisclosure agreement, much less early stage financing from VCs if you make your pitch too early. There are incubators and seed investors who can help you become ready for VC investment. As discussed above, consider angel investment as an alternative to VC funding.

Takeaways: Medical device fundraising is hard but there are steps you can take to improve your chances of success. Make sure you know the expectations and criteria of the people and firms to whom you are pitching. Make sure your startup is a good fit with your prospective investors. Just like Goldilocks and the three bears, you must position the opportunity you’re presenting as not too small, not too big…not too early, not too late. 

Read more:

Need angel funding for your early-stage healthcare startup? 7 smart tips from investor Allan May – MedCity News.

Three big mistakes medical device companies make when pitching VCs – MedCity News.

How to Get Payors to Pay For Your Medical Device | MDDI Medical Device and Diagnostic Industry News

You and your medical device development team have created an exciting new widget. You’re gearing up for a costly product launch. How do you make sure health insurers will reimburse hospitals for purchasing your device?

It’s a very important question because hospitals will not purchase your device unless they are confident that they will receive reimbursement from the payor (insurance company).

If your widget is the same as existing products except it’s cheaper, congratulations. You’ve developed what could be considered a commodity product. You can take advantage of existing reimbursement codes (CPT and DRG) and explain the codes to the physicians and decision-makers at the hospital. You can sell your device on the basis that it saves money.

If you have created a really new widget that is unlike other devices, congratulations again. You’ve developed a differentiated product. Your reimbursement effort is just beginning.

If you haven’t done so yet, now would be a good time to engage with a reimbursement consultant. Perhaps your new widget can fit within existing reimbursement codes. If not, the path will be long and involved to get a new code – a topic worthy of its own post, perhaps even a chapter in a book.

In a discussion at AdvaMed 2013, Alan Muney, chief medical officer at Cigna, said Cigna asks three questions when considering coverage for a new device:

1. Has the new technology been proven by studies in peer-reviewed journals?
2. Has the new technology produced better outcomes than current technologies?
3. Does the new technology produce the same outcomes as current technologies but at a lower cost?

These seem like reasonable questions. Although Dr. Muney did not explicitly say so, I’m assuming that you need only answer “yes” to one of these questions in order to be considered for coverage for your device. The questions all have implications, however.

First, to have a study published in a peer-reviewed journal generally means you must conduct a randomized clinical study with enough statistical “power” to make a definitive conclusion. In this context, “proven” means that the new technology has equivalent or superior clinical efficacy to the existing “gold standard” technology. And you already know that clinical studies are expensive and take a long time to conduct.

Second, “outcomes” are more focused on patient health than on a comparison with other technologies. You will need to conduct a clinical study, but with different endpoints measuring different things. The study may last longer and involve more patients, all of which will cost more money and involve more risk to you, your company, and your investors.

The third question adds costs to the equation, not just the procurement costs of your device but the Big Picture costs: does your technology reduce or increase overall costs to the healthcare system? At this point, you may need to consult with a healthcare economist to determine what to measure and how to measure it. And proving cost claims usually involves conducting a big, expensive clinical study. Of course, if you prove better outcomes at reduced cost to the healthcare system, congratulations again. Your product should be adopted rapidly and your focus will shift to keeping up with demand.

Takeaways: Obtaining medical device reimbursement is complicated and risky. It increases costs and time to market for many medical devices. You can’t go to market without knowing how (or if) your device will be reimbursed by insurers. During your business planning process, you should have an idea as to which of the three questions raised by the Cigna CMO you can positively answer for your device. That response should also help inform the size, cost, and duration of the clinical study you will need to conduct. And that will be an important component of the capital you need to raise for commercialization,

Read more: Cigna CMO Explains How to Get Payors to Pony Up For Your Device | MDDI Medical Device and Diagnostic Industry News Products and Suppliers.

FDA finally publishes final guidance for mobile medical apps | mobihealthnews

This has to be welcome news to any company competing in the mobile health market segment. Although the guidance is not binding in typical FDA fashion, it does remove some uncertainty about what the FDA considers mobile software that should fall under Class II (510k) device regulations.

Apparently, lobbying elected officials has some benefit. The story reports that the FDA promised to issue the guidance “in the current fiscal year” in congressional hearings last summer. We are in the last week of the fiscal year and true to the FDA’s word, the guidance is finally issued, two years after the draft guidance was issued.

As one might expect in a “land grab” environment, the absence of regulatory guidance has not been a barrier to market for a number of companies. There have been 100 510(k) marketing clearances issued for mobile medical applications in the past ten years, 40 of which occurred since the draft guidance was issued.

Some companies might have bigger concerns in that they are actively marketing apps that fall under the regulated category but have not obtained 510(k) clearance. Two acne treatment apps were removed from the Apple and Android app stores by the FTC recently.

The guidance treats mobile apps in four broad categories:

  1. Class II apps:

a. Apps that “are intended to be used as an accessory to a regulated medical device – for example, an application that allows a health care professional to make a specific diagnosis by viewing a medical image from a picture archiving and communication system (PACS) on a smartphone or a mobile tablet.”

b. Apps that “transform a mobile platform into a regulated medical device – for example, an application that turns a smartphone into an electrocardiography (ECG) machine to detect abnormal heart rhythms or determine if a patient is experiencing a heart attack.”

2.  Mobile Apps for which FDA intends to exercise “enforcement discretion” (meaning that FDA does not intend to enforce requirements under the FD&C Act).

From the Guidance:

FDA intends to exercise enforcement discretion for mobile apps that:

• Help patients (i.e., users) self-manage their disease or conditions without providing specific treatment or treatment suggestions
• Provide patients with simple tools to organize and track their health information
• Provide easy access to information related to patients’ health conditions or treatments
• Help patients document, show, or communicate potential medical conditions to health care providers
• Automate simple tasks for health care providers
• Enable patients or providers to interact with Personal Health Record (PHR) or Electronic Health Record (EHR) systems.

3.  Apps that are not medical devices and thus are unregulated: Apps that provide a means of monitoring and reporting health parameters and activities but that make no claimed benefit. Examples:

a. Mobile apps that are intended to provide access to electronic “copies” (e.g., e-books, audio books) of medical textbooks or other reference materials with generic text search capabilities. These are not devices because these apps are intended to be used as reference materials and are not intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease by facilitating a health professional’s assessment of a specific patient, replacing the judgment of clinical personnel, or performing any clinical assessment.

b. Mobile apps that are intended for health care providers to use as educational tools for medical training or to reinforce training previously received. These may have more functionality than providing an electronic copy of text (e.g., videos, interactive diagrams), but are not devices because they are intended generally for user education and are not intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease by facilitating a health professional’s assessment of a specific patient, replacing the judgment of clinical personnel, or performing any clinical assessment.

c. Mobile apps that are intended for general patient education and facilitate patient access to commonly used reference information. These apps can be patient-specific (i.e., filters information to patient-specific characteristics), but are intended for increased patient awareness, education, and empowerment, and ultimately support patient-centered health care. These are not devices because they are intended generally for patient education, and are not intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease by aiding clinical decision-making (i.e., to facilitate a health professional’s assessment of a specific patient, replace the judgment of a health professional, or perform any clinical assessment).

d. Mobile apps that automate general office operations in a health care setting and are not intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease.

e. Mobile apps that are generic aids or general purpose products. These apps are not considered devices because they are not intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease.

Takeaways: While the FDA appears to move at a glacial pace in many instances, it eventually responds to market activity. Mobile health is a growing segment and should grow even faster in the coming years.

The trick to escaping regulation under the “enforcement discretion” provision is to avoid making diagnoses or recommendations for treatment. If your app/device interfaces with a class II device or provides diagnostic or therapeutic information or suggestions, you are going to need a 510(k).

 Read more:

FDA finally publishes final guidance for mobile medical apps | mobihealthnews.

Get the FDA Guidance here:

 http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM263366.pdf

Startups beware. A potential “death sentence” awaits the uninformed.

A fine example of unintended consequences, the JOBS act (Jumpstart Our Business Startups) was supposed to make it easier for startup companies to raise capital and to talk about their financing needs without getting into hot water with the SEC. The law was passed with bipartisan support, and was signed into law by President Obama on April 5, 2012.

As this GeekWire article points out, the new law has made it somewhat easier for startups to conduct IPOs. Unfortunately, that’s the last thing a startup does before it gets transformed into a public company.

The provisions of the JOBS act can actually jeopardize the fundraising activities of a startup during the critically important early stage, before significant capital has been raised and probably before the companies can afford expensive attorneys to advise them.

The main issue with the JOBS act from a startup perspective is that it has complicated rather than simplified the rules around “general solicitation,” the prohibition against publicly offering equity in the company in exchange for investment. The prohibition applies to participation in pitch events, very common forums where startup CEOs present their pitches to a crowd containing a mixture of people, including (it is hoped) a few angel investors.

At least one Internet-based angel investor “crowdsourcing” site, Poliwogg, is counting on the new law to attract novice angel investors to its online marketplace for healthcare company investment opportunities. It remains to be seen if the details of the regulations have a chilling effect on what could be an important resource for early stage startups and for prospective angel investors.

Dan Rosen, a prominent Seattle angel investor who was interviewed for the GeekWire article, pointed out that the “death sentence” can occur if a startup makes two mistakes regarding general solicitation. The penalty from the SEC is a one year prohibition against fundraising. That would sink most startups.

What’s next? A number of organizations are lobbying for changes to the law or at least a more lenient interpretation by the SEC. Given the polarized climate in Washington, D.C., it may take some time for this issue to be resolved.

Takeaways: Startup CEOs should educate themselves about the provisions of the JOBS act as it applies to them. As the saying goes, ignorance of the law is no excuse. I’ve been reading the blog of a Seattle attorney who has a special interest in this matter, William Carleton. You can reach his blog here: http://www.wac6.com/ It’s also wise to engage a corporate attorney who is experienced in startups and startup financing law. Yes it’s expensive but it may be the best insurance you can buy for your startup.

Read more: The messy side of the JOBS act, and the potential ‘death sentence’ for startups – GeekWire.