Eko Core, A Digital Upgrade For The Centuries-Old Stethoscope | TechCrunch

Eko Core Digital Stethoscope - product picture
Eko Core Digital Stethoscope

The Eko Core digital stethoscope is a “why didn’t I think of that?” invention.

In a few months, the stethoscope will celebrate its 200th birthday. A medical breakthrough in 1816, it’s still a part of nearly every doctor’s visit today and a symbol of medicine itself.…

Digital Stethoscope

Stripped to its essentials, the Eko Core digital stethoscope is a highly engineered Bluetooth microphone designed to fit medical stethoscopes. The device wirelessly transmits patients’ heart sounds (not EKG) to a smart phone or tablet app.

The Eko Core was invented and commercialized by a team of UC Berkeley engineering graduates (claimed to be the youngest team to secure FDA clearance for a Class II medical device).

What Eko Core did well

In developing and executing its strategy, the Eko Core team did a number of things right:

  • Targeted a huge existing market. Most doctors and many nurses carry and use stethoscopes every day.
  • Recognized and addressed a  nagging clinical problem: It can take years (even decades) to become adept at using a stethoscope to recognize heart sounds.
  • Improved the functionality of the stethoscope by enabling visualization and amplification. Benefit to the user is improved confidence in identification of heart sounds.
  • Made their device a simple, affordable ($199) add-on to the user’s existing stethoscope.
  • Employed a Bluetooth wireless connection to the user’s smart phone or tablet . Data  from the stethoscope is displayed in a custom app.
  • Enabled data sharing via “the cloud” so that users can share typical and atypical heart sounds and learn from each other.
  • Partnered with major EHR suppliers to enable the digital stethoscope data to be entered into the patient’s electronic medical record.
  • Identified the potential for use of the Eko Core to lower healthcare costs by reducing costly referrals to cardiologists for unusual heart sounds.

What Eko Core hasn’t done yet

  • Showed they can be financially successful over time. Medical device sales and marketing is expensive. Manufacturing under FDA, GMP, ISO, etc. regulations can increase costs. Maintaining healthy profit margins on low-priced medical devices can be a challenge.
  • Exhibited a competitive advantage over similar products, Thinklabs for example.
  • Fully protected their intellectual property, although the company did recently file a patent application.
  • Leveraged their technology beyond one-hit wonder status.

Takeaways

The number of medical stethoscope users in the developed world is on the order of several million. Growth rates are slow, with new graduates replacing retirees, etc.  That puts the potential market at around $500-600 million.

Not bad, but once you “pick the low-hanging fruit” and sell to the early adopters and early majority customers, selling more units gets progressively tougher and more costly. And given competition, it’s a race for market share to capture and keep customers.

I think this will be a fun and profitable business for a while. Longer term, I hope Eko Core has a big medical device company lined up as a distribution partner and has an encore product that leverages the same technology and customer base.

Source: The Eko Core Is A Digital Upgrade For The Centuries-Old Stethoscope | TechCrunch

Eko Devices website

Smaller, faster, lighter, cheaper medical devices

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image via singularityhub.com

Is it just me or does it seem that most interesting medical device innovations are coming from startups and not from established companies? Here are a few medical devices being developed that are smaller, faster, lighter, and cheaper than established technologies and products.

The point of care diagnostic system being developed by startup Theranos relies heavily on microfluidic and automation technologies. The technology, while impressive, is not revolutionary. Theranos is using readily accessible technology to develop a point-of-care diagnostic test device that can be operated by virtually anyone. The test uses a pinprick to collect a drop of blood to perform all of its tests. No need for a nurse or technician. The test is completely automated so there is no need for a diagnostic technician.

Time is saved because the sample is processed onsite instead of being transported to a central lab and there is negligible wait time compared with large diagnostic equipment. One of the biggest drawbacks to present diagnostic testing is the wait: patients are anxious and physicians often can’t administer medicine or therapy until and unless an initial diagnosis is confirmed.

Tribogenics is developing the next generation of x-ray imaging technology. From the company website:

Tribogenics technology enables portable, compact X-ray solutions for applications in industrial testing, medical diagnosis, security screening and other industries. By miniaturizing X-ray sources and eliminating the need for high voltage, we can create products and solutions unattainable using existing X-ray technology.

While I’m not sure how big the opportunity is for pocket-sized x-ray machines in medicine, there are plenty of industrial and commercial uses. Plus, the potential for portability, low cost, and simplicity may make the Tribogenics device well-suited for deployment in developing countries with little or no medical infrastructure.

The third technology I’m writing about isn’t a product but a concept. The Smartphone Physical is being termed “the physician’s bag of the 21st century.” In a recent TED Talk, Shiv Gaglani showed that a complete physical exam could be conducted with a smartphone and what are essentially smart attachments. For example, companies have developed or are developing ECG leads, a stethoscope, otoscope, ultrasound wand, and even a spiromoter. Gaglani and his colleagues are creating a database of connected devices and apps and hope to start a company to commercialize the Smartphone Physical.

One concern about the Smartphone Physical is a condition that is described by a new word, cyberchondria. Yes, it means hypochondria that is facilitated (or exacerbated) by the ready availability of digital and connected devices and apps. Don’t think it could happen? Ask any doctor about how many patients self-diagnose on the Internet before their office visit. Cyberchondria is real.

Takeaways: If you can take an existing medical device or technology and improve it by making it smaller, faster, lighter, and/or cheaper, you have the makings of a company. Your new device doesn’t have to be better than what it replaces but it would make it easier to sell if it had the same quality, accuracy, etc.

There are plenty of examples of medical devices that are big, bulky, slow and costly. Give customers two or more benefits based on eliminating or minimizing these undesirable features and you will create a market niche for your products.

Read more:

Small, Fast and Cheap, Theranos Is the Poster Child of Med Tech — and It’s in Walgreen’s | Singularity Hub.

http://www.theranos.com/

California Startup, Tribogenics, Develops Smart Phone Sized Portable X-ray Machines | Singularity Hub.

http://tribogenics.com/

Smartphone Physicals Are Taking Off With Explosion of Apps, Attachments | Singularity Hub.

http://www.smartphonephysical.com/

 

Ranking the best places for healthcare startups

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image via CBinsights.com

Silicon Valley is Mecca for technology companies. When it comes to ranking the best places for healthcare startups, however, the global technology hub seems to be not as dominant.

A common method for ranking the best places for startups is to quantify the number of exits and aggregate valuation in a given time period. A recent report by CB Insights, an investor service focused on early stage companies and emerging industries, says that Massachusetts and not the Bay Area has been more successful in exits for VC-backed healthcare startups.

Healthcare startup categories included medical device, biotech, and pharmaceutical companies.

The analysis also shows that other regions are competitive as well. Southern California had the next highest number of exits in the same time period, 2012-present.

http://www.cbinsights.com/blog/wp-content/uploads/2013/12/5ValueCreationTableNewFinal.png

The CBinsights report looked at the startup exit data in another way that highlights differences between the regions more clearly. They defined another metric, “Value Creation”. Value Creation is the ratio of the average exit value of a company in the region to the average VC investment in a company in that region. So bigger is better.

As seen in the table, New York comes out on top in this ranking while Silicon Valley lags at little more than half of the New York number. My home state of Washington is even lower on the list. This ranking may reveal why certain regions seem to have an easier time attracting venture capital investment than others. One last and very interesting note: the Value Creation metrics for technology companies are much higher than for healthcare companies. It starts to become clear why there is a dearth of capital investment in the healthcare space. If you are a VC, would you put your money in healthcare or technology?

Takeaways: Although no single city or region in the U.S. dominates when it comes to a great location for healthcare startups, there are a few conclusions that can be drawn from the report.

The East Coast  – Massachusetts in particular but also the New York/New Jersey/Pennsylvania tri-state areas are very strong in healthcare startups. Obvious reasons include major population centers for access to a talented and experienced employee pool, large numbers of world-class research universities and medical centers, and close proximity to financial hubs.

Of course, other locations such as Minneapolis, the San Francisco Bay Area (including Silicon Valley), Southern California, and the Seattle Metro area have their drawing power as well. Some of the additional factors include lifestyle, proximity to the FDA and other government officials, and being part of an industry “cluster” (medical device in Minneapolis, biotech in the Bay Area for example).

Read more:

Silicon Valley doesn’t dominate when it comes to VC-backed healthcare exits.

Silicon Valley is Second to Massachusetts for Venture Capital-backed Healthcare Exits.

Price Increases, Not Demand, Have Caused the Massive Hike in U.S. Health Spending

image via wikipedia.org
Life expectancy compared to healthcare spending from 1970 to 2008, in the US and the next 19 most wealthy countries by total GDP (wikipedia.org)

In the USA, we continue to pay more and get less for our healthcare expenditures than any developed country on Earth. What hasn’t been clear is why that is the case in the complex American healthcare system. A paper in the latest edition of the Journal of the American Medical Association by researchers at Johns Hopkins University and elsewhere asserts that price increases and not demand have caused the massive hike in U.S. health spending over the past few decades.

The researchers used publicly available data to identify trends in health care from 1980 to 2011. They examined and analyzed the source and use of funds, patients and providers, and finally the value created by the expenditures and health outcomes.

image via blogs.wsj.com

The researchers found that US health care expenditures have doubled since 1980 as a percentage of US gross domestic product (GDP), to well over 1/6 of the total economy. Growth in healthcare spending has far outpaced that of other OECD countries. Most of the OECD countries have either some form of single payer healthcare or public option health insurance along with government-imposed price controls on healthcare components. The U.S., of course, has none of these.

The article notes that annual growth in the rate of healthcare spending has decreased since 1970, and especially since 2002. That’s typical of large entities – Google and Microsoft experienced the same effect as they grew and aged. The average healthcare spending growth rate, however, stands at 3% per year. The 3% average annual growth in spending is more than overall GDP growth and is more than the average growth in any other industry. Moreover, the share of the healthcare system funded by government increased significantly, from 31.1% in 1980 to 42.3% in 2011.

Of course, as has been noted in this blog and elsewhere, all of this spending has resulted in lower life expectancies at birth as well as lower survival rates for many chronic diseases compared to other developed countries. The conventional wisdom has been that soaring demand for healthcare and the needs of the increasing elderly population have been responsible for the increases in spending, along with “inefficiencies” and the ever popular “defensive medicine”. Not so, according to this analysis:

The findings from this analysis contradict several common assumptions. Since 2000, price (especially of hospital charges [+4.2%/y], professional services [3.6%/y], drugs and devices [+4.0%/y], and administrative costs [+5.6%/y]), not demand for services or aging of the population, produced 91% of cost increases; (2) personal out-of-pocket spending on insurance premiums and co-payments have declined from 23% to 11%; and (3) chronic illnesses account for 84% of costs overall among the entire population, not only of the elderly.

So hospital charges, physicians’ fees, drugs, medical devices, and administrative costs (medical insurance) have all risen faster over the past ten or so years than the overall rate of increase in spending for healthcare. Also note that chronic diseases among the general population, not just the elderly, account for a whopping 84% of all healthcare costs. In fact, the study found that chronic conditions in people younger than 65 account for 2/3 of all health care costs. It’s clear to me what’s driving the increases, and it’s not in keeping with conventional wisdom.

Additionally, despite what most people perceive to be ever-increasing co-pays, premiums, and deductibles, out-of-pocket spending decreased more than 50% (as a portion of total spending) over the same period. That means most people are disconnected from the economic realities of healthcare spending. No wonder we can’t decide how to fix things – we can’t even figure out exactly what’s broken!

The article also points out that three broad trends are responsible for much of the changes over the time period in the study: consolidation of providers reducing competition, an emphasis on information technology that has yet to produce tangible benefits, and empowerment of the patient that has not always produced positive outcomes (think of direct-to-consumer advertising of pharmaceuticals).

Takeaways: the authors summarized it very well: “a national conversation, guided by the best data and information, aimed at explicit understanding of choices, trade-offs, and expectations, using broader definitions of health and value, is needed.

The current controversies surrounding the Affordable Care Act are a good example. Something had to be done about health insurance reform. Obamacare is a place to start and more evolutionary than revolutionary.

Anything as massive as our healthcare system will always be highly politicized and change will be controversial. Whether we can hope to have a conversation informed by data and information remains to be seen.

Read more:

Soaring Prices, Not Demand, Behind Massive Hike in U.S. Health Spending – US News and World Report.

JAMA Network | JAMA | The Anatomy of Health Care in the United States.

The artificial hip fiasco

http://en.wikipedia.org/wiki/Hip_replacement
image via wikipedia.org

Designing medical devices is hard work. Designing artificial joints is even harder. The ongoing artificial hip fiasco in the medical device industry is proof.

Artificial joints such as hips and knees are incredible technologies. They can take people out of wheelchairs and turn them into active adults. The crippling pain and infirmity of arthritis and other degenerative diseases are banished, at least for a while.

The requirements for these high tech medical devices are challenging. They are implants, subjected to full immersion in bodily fluids and subject to all of the stresses and biochemical processes of the human body. Ideally, the implant should last the rest of the patient’s life although that seems to be one of the most challenging requirements.

Implants such as artificial joints that must move may be the most difficult of all to design and to last in the body. Materials selection is particularly challenging. Metal implants must be sufficiently hard and tough to take the loading and repetitive motion of a patient’s joint for years and years. Ceramic implants must be fracture-resistant to impact loads and shocks, say from a jump or a fall. Polymer implants must be low friction but must not break up under mechanical stress or chemical attack. And coatings must not migrate to other parts of the body. Of course, none of the materials in the implants can be toxic.

Unfortunately, there does not appear to be an ideal combination of materials for hip implants. Interestingly as well (and I’m sure of substantial frustration to device engineers), there does not appear to be a reliable in vitro or in vivo model with which to perform wear and life testing. If there were a robust model, none of these implants would have made it to market without major revisions in materials and/or design.

Implant designs have failed mechanically through fracture and friction and more insidiously, have raised the potential for cancer and autoimmune disorders through migration of metals, coatings, and polymers to other areas of the body. In many cases, patients have undergone additional implant surgeries as a result of the failures. And these are not trivial operations.

A report today in Fierce Medical Devices indicated that Johnson & Johnson has settled 7,500 lawsuits for its metal-on-metal hip implants for a whopping $4 billion. That’s an average of $300,000 per implant and is in addition to other lawsuits settled in October. Other lawsuits against J&J are still pending as well as legal exposure outside the U.S. J&J announced recently that it will exit the metal-on-metal and ceramic-on-metal implant markets in 2014. I’m guessing that the legal settlements wiped out any profits made over the years and is probably going to cost untold numbers of jobs.

J&J’s competitors have problems too. According the the Fierce Medical article, Biomet, Stryker, and others are facing similar liability situations with respect to metal-on-metal implants.

The market for these devices is large and increasing. Hip implants are one of the most frequent orthopedic surgeries. As the population of seniors in the U.S. and other developed countries continues to grow while the baby boom generation ages, demand for procedures that maintain active lifestyles will continue to increase.

Takeaways: The onus is on medical device engineers to create valid in vitro and in vivo preclinical models and to test exhaustively before releasing to manufacturing. Engineers and researchers must also identify biomaterials and designs that are truly biocompatible and able to meet the demanding requirements that these implants must satisfy.

Give the track record of implants, engineers and medical device executives can expect increased scrutiny and skepticism from regulatory agencies, investors, physicians, and patients and their families.

Of course, it also means that there is an incredible opportunity awaiting the company or engineer that can solve this intractable issue.

Read more:

Report: J&J settles most metal hip lawsuits in $4B-plus accord – FierceMedicalDevices.

More Artificial Hip Concerns – NYTimes.com.

Renal Denervation – the next big thing?

blood pressure checkIt seems like every big medical device company is working on a technology for renal denervation to treat high blood pressure.

Development and market availability of a therapy for hypertension (high blood pressure) is a big deal. Here are some facts about hypertension from the World Heart Federation:

  • Globally, nearly one billion people have high blood pressure (hypertension); of these, two-thirds are in developing countries.
  • Hypertension is one of the most important causes of premature death worldwide and the problem is growing; in 2025, an estimated 1.56 billion adults will be living with hypertension.
  • Hypertension is the leading cause of cardiovascular disease worldwide.
  • People with hypertension are more likely to develop complications of diabetes.

Some additional facts about hypertension in the USA from the Centers for Disease Control:

  • 67 million American adults (31%) have high blood pressure—that’s 1 in every 3 American adults.
  • 69% of people who have a first heart attack, 77% of people who have a first stroke, and 74% of people with chronic heart failure have high blood pressure. High blood pressure is also a major risk factor for kidney disease.
  • More than 348,000 American deaths in 2009 included high blood pressure as a primary or contributing cause.
  • High blood pressure costs the nation $47.5 billion annually in direct medical expenses and$3.5 billion each year in lost productivity.
  • About half (47%) of people with high blood pressure have their condition under control.

Hypertension is treated currently with drugs of course. According to a report from ADS Reports, the global market for antihypertensive drugs was $29.9 billion in 2010 and is projected to reach $33 billion in 2017. That’s a huge target for interventional therapy.

I wrote about Bellevue, WA-based Kona Medical a couple of weeks ago receiving a $10 million investment specifically earmarked for their market entry into China, obviously one of the biggest potential markets.

Kona recently announced interim results from two ongoing clinical trials. It reported an average systolic blood pressure reduction of 29 mmHg at 6 months in their first study and a three-month drop of 19.4 mmHg in the second study using a dosing pattern that reduced therapy time from 13 to three minutes.

Kona’s results are significant because its therapy is completely noninvasive. It uses high intensity focused ultrasound on the surface of the skin to deliver energy to ablate the renal nerves.

Other companies developing renal denervation technologies include St. Jude Medical, Boston Scientific, and Medtronic. Each has chosen a different energy modality to deliver the therapy.

MedCityNews reports that St. Jude is using a multi-electrode catheter to deliver electrical energy to the renal nerve sites. The company reported results from a clinical study: at 18 months, 77 percent of the 46 patients treated with St. Jude’s technology, the EnligHTN system, had responded to therapy. St. Jude’s system total ablation time is about four minutes, according to a company statement.

The Boston Scientific therapy uses bipolar (electrical) energy to deliver therapy. After 12 months, the company reported a “clinically-meaningful decrease in office systolic blood pressure” in 85 percent of the 139 patients treated. The Boston Scientific therapy requires a brief 30-second treatment time.

Medtronic seems to have a head start in the market. In early 2011, it finalized its purchase of Ardian, a Silicon Valley startup that was working on a novel therapy for hypertension since 2003. The Medtronic RDN system therapy uses radio frequency energy delivered via a catheter to the renal arteries/nerves. Medtronic’s Symplicity renal denervation system has a CE mark and is commercially available outside the U.S. Medtronic has a number of completed and ongoing clinical studies, all of which have resulted in conclusions that the therapy is safe and effective.

Takeaways: New markets are one area where startups can compete on a level playing field with huge, multinational companies. They can be more nimble, take more risks, and can pivot when things don’t go according to plan. In the case of renal denervation, Kona seems to have a decided advantage with its noninvasive technology and treatment. Of course, Medtronic has a years-long head start and we all know the “best” technology doesn’t always prevail, right?

Read more:

Two top medical device companies announce promising renal denervation tech results – MedCity News.

Kona notches solid results for novel renal denervation tech – FierceMedicalDevices.

 

 

In search of a better mousetrap…EHR system, that is

http://www.mddionline.com/sites/www.mddionline.com/files/image/01310/ehrdoc.jpg
image via mddionline.com

There has been enormous emphasis in the past few years on getting physicians to adopt electronic health records (EHRs). The HITECH Act (Health Information Technology for Economic and Clinical Health Act) part of the American Recovery and Reinvestment Act of 2008, established financial incentives for medical practices and hospitals to adopt EHRs that met specific “meaningful use” criteria. According to a recent survey, physicians are dissatisfied with their EHRs and are looking to switch.

The HITECH Act was an early effort of the Obama administration to use information technology to begin to rein in out of control healthcare costs by using data to make more informed decisions.

The Department of Health and Human Services (HHS) announced recently it has exceeded its goal of 50% of doctor offices and 80% of eligible hospitals having electronic health records (EHRs) by the end of 2013.

There are thousands of EHR products from hundreds of vendors: 3721 EHR products for ambulatory care and 1282 EHR products for inpatient care listed on the HealthIT.gov website as certified EHR solutions. Many entered the field opportunistically when it became apparent that large numbers of physicians, medical practices, and hospitals would be purchasing EHRs in response to the HITECH Act incentives.

According to research conducted by EHR software reviewer Software Advice, it appears that many physicians are unhappy with their new EHR systems: 31.2%  of medical providers are replacing their EHRs today, compared to 21.0% in 2012. That’s a 48.6 percent increase. The main reason for replacement? More than 60% of physicians reported dissatisfaction with their current system. There are multiple reasons for their unhappiness: 26% said their EHR lacks key product features while 14% said it was too cumbersome to use and 12% said their current EHR was too costly.

Adopting a new EHR is a big investment in capital and resources. The switching costs are quite high because transitioning to a new system is complicated and time-consuming.

Takeaways: There remains a significant opportunity for an EHR developer to capture revenue and market share given the high levels of dissatisfaction with current solutions. Companies already in the market should reassess their offerings and work with customers to improve usability and user interfaces, to improve connectivity with other systems, and to provide the features that users need. Startups should try to differentiate their products in the same ways.

It all starts with understanding customer requirements.

Read more:

Why Physicians are Ditching Your EHR System | MDDI Medical Device and Diagnostic Industry News Products and Suppliers.

The Impact of the HITECH Act on EHR Implementations IndustryView | 2013.

HITECH Act – the Health Information Technology Act | Policy Researchers & Implementers | HealthIT.gov.

Hyping a digital health startup

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image via NY Times digital blog

HealthTap is a digital health app and website. It’s a useful way to get health and fitness information that is tailored to your interests. You can even get your specific questions answered by medical experts. I use it myself. In an effort to attract attention and even more users, however, HealthTap appears to have hyped or at least exaggerated its success.

HealthTap works by recruiting physicians (more than 50,000 participate) to answer questions posed by subscribers for free. The subscribers do not pay for the service. I’m not quite sure what their business model is, actually. The rationale for doctors to participate is that the physicians will be recognized (“thanked” in HealthTap parlance), their online reputation will be enhanced, and real life patients will come to them as a result.

After an interaction where a user asks a question and receives a response from a doctor, HealthTap asks the user to thank the doctor or HealthTap and prompts the user for more information. The extra information apparently includes responding with a click to a question like, “This answer saved my life.”

HealthTap keeps a record of all of the positive responses to the “saved my life” prompt and issued a press release when the tally got to 10,000. Nothing wrong with any of that, except there is no way to prove if the app/website/reply really did save a particular life.

As one physician commenter in the New York times article said, “after my third “This saved my life,” I investigated. It was for recommending antifungals for jock itch. Nice pat on the back, but lifesaving? Not!”

Although some of the the lifesaving claims may be legitimate, the touting of “10,000 lives saved so far” on HealthTap’s website seems vaguely desperate and hyped – not what I expect from a serious medical app.

HealthTap also provides a disclaimer on its website and app: “HealthTap does not provide medical advice, diagnosis or treatment.” The disclaimer is obviously there to avoid being treated as an FDA-regulated medical application. Of course, the FDA (and malpractice attorneys) will have the final say on that status. I don’t know how asking a specific medical question and having an answer provided by a physician avoids becoming medical advice.

HealthTap is competing with big players in the health information field. WebMD is the 800 pound gorilla and granddaddy of health information sites. I suppose the executives at HealthTap feel they have to be aggressive in order to create awareness and get users and doctors to take notice. Unfortunately, their real utility and service has been tainted by excessive marketing, in my opinion.

HealthTap appears to be a well-funded Silicon Valley startup. Its investors include luminaries like Eric Schmidt, Chairman of Google, Vinod Khosla, Esther Dyson, and more.

Postscript:  I removed the HealthTap app from my mobile phone because I thought the notifications it provided were too frequent and intrusive. I still receive an email every few days on the subjects I told HealthTap were important to me.

Takeaways: Yes, you need to be aggressive in marketing your startup. There is a lot of competition for mind share among similar startups all over the world, no matter how unique you believe your company/product/service to be.

No, you should not make up or exaggerate claims about your product. Perhaps it can be excused as puffery or marketing hype but healthcare companies are held to a higher standard than consumer products like beer or body wash.

Read more:

An App That Saved 10,000 Lives – NYTimes.com.

HealthTap.com

High tech medical device maker focuses on…China?

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image via axialexchange.com

High blood pressure is a significant societal health problem all over the world. Kona Medical is trying to address the huge hypertension population with a noninvasive ultrasound device that might eliminate the need to take daily blood pressure medication. In a somewhat unorthodox move, the company is focusing initially on China.

 

Last year, Medtronic acquired Ardian, another startup that is focused on the same clinical condition. Ardian, based in the San Francisco Bay Area, was purchased for $800 million.

From axialexchange.com:

The statistics for hypertension are stunning. 30% of US adults have hypertension (high blood pressure). Another 30% of Americans are pre-hypertensive. Less than half of those people with hypertension have their condition under control.  A fifth don’t know they have it. The annual price tag for direct medical expenses related to high blood pressure is $131 billion. This is driven in part by the 55 million doctor visits that are prompted by high blood pressure. High blood pressure is present in most first heart attacks (69%), first strokes (77%), and in people with congestive heart failure (74%). High blood pressure was listed as a primary or contributing cause of death for about 348,000 Americans in 2008.

Recent medical research has shown that ablation (destruction) of the nerves around the renal arteries can reduce blood pressure in patients with hypertension. A number of medical device companies are racing to commercialize products based on their proprietary technologies in order to take a lead in this evolving market.

Ardian uses radio frequency ablation delivered via catheter to the area of the renal arteries. Kona is using focused external ultrasound to deliver the therapeutic energy – they are calling it “surround sound.” In a superficial assessment, it appears that Kona has the edge since their technology is completely noninvasive while the Ardian technology could at best be described as minimally invasive.

Of course, what should really matter is which technology works best with the fewest side effect, not how the therapy is delivered. The “best” technology doesn’t always prevail in the medical device industry, however. Sometimes first to market gets and keeps the largest share while in other situations the best marketing prevails.

Kona has previously raised $40 million in venture capital earlier this year and in 2012.

Kona’s latest announcement, to use a new investment of $10 million to launch their product in China, is somewhat confusing. Yes, there are vast numbers of people in China and untold numbers with hypertension. Most, however, probably do not have the type of health insurance that would pay for a high tech solution. In its press release, the company said that their therapy has the promise of being delivered in an outpatient setting. Outpatient hypertension therapy clinics – now that’s a disruptive concept!

China is not a traditional launch market for new medical devices. The company says that the latest investment, from a fund with deep ties to China, will be used exclusively to address the many clinical, regulatory, and intellectual property issues unique to China as a medical device market for Kona’s new therapy.

It will be interesting to see if Kona can successfully launch their product into the Chinese market while simultaneously commercializing for the traditional U.S. or E.U. markets without losing focus or depleting key resources.

Takeaways: Most companies commercializing novel medical devices pick a launch market and stick with it. There are any number of reasons to launch in the U.S. first. Other companies pick the European Union countries and some look to large, less regulated countries in South America.

While many development and commercialization tasks are the same no matter which initial market is selected, there are important differences. It’s usually best to choose the first, second, and perhaps third initial markets so that the launch components are not uniquely different and the company can use scarce resources for other commercialization tasks.

 Read more: Kona Medical raises $10M to reduce high blood pressure for people in China – GeekWire.

Kona Medical

Teeny Tiny Pacemaker Fits Inside the Heart | IEEE Spectrum

http://spectrum.ieee.org/img/rsz_image_nanostim-euro_size_comparison-2-1381851816207.jpg
image via IEEE Spectrum

This leadless pacemaker is incredible technology. Not only did the company, Nanostim, reduce the size of the pacemaker by about 90% but it eliminated the often troublesome leads that are required in traditional pacemakers.

 

 

The stealthy company, based in the San Francisco Bay Area, was recently acquired by St. Jude Medical for $123-200 million (depending on milestones).

The new pacemaker has received European regulatory clearance but not FDA approval yet although it has received an FDA Investigational Device Exemption (IDE). A pivotal clinical trial is expected to begin soon in the U.S. while sales will begin in selected European countries very soon.

The device, about as big as a AAA battery, is implanted directly into the interior of the right ventricle of the heart. Electrodes on the exterior of the pacemaker provide electrical stimulation to the heart muscle. The device is implanted via a catheter inserted in the femoral artery. Removal occurs via the same route, only in reverse. Battery life is 9-13 years. The device has wireless communication capability so it can be programmed remotely.

Given the negative publicity and adverse events involving pacemaker lead fractures over the past years, leadless pacemakers appear to be an idea whose time has arrived. Of course, the idea has occurred to more than one inventor.

Here’s Medtronic’s take on the concept:

http://www.qmed.com/files/ck_images/large_Medtronic_leadless%20pacemaker.jpgMedtronic’s product concept is much smaller than a penny. Medtronic announced the device three years ago and said it would take 3-5 years before beginning human implants. They also said that the product concept included the ability to be programmed via a smartphone application.

 

image via qmed.com

 

 

Critics have pointed out that the Nanostim product and Medtronic device concept provide only single chamber pacing and are not rate-responsive – the most basic form of pacemaker.

It seems to me that the Nanostim device is classic disruptive technology. It provides a single function compared to the elaborate features of traditional pacemakers. It’s probably priced at a fraction of the price of complex pacemakers. As with other disruptive technologies, competitors ignore new entrants with low cost/performance at their peril. Given sufficient demand, I’m sure clinicians and engineers will figure out ways to make these “simple” devices perform all the functions of their bigger, older “brothers”.

On the positive side, no surgery is needed for implantation – a big plus with patients. And there are no potentially problematic leads to route. Other benefits from the patient’s standpoint are no activity restrictions, no surgical “pocket” for potential infections and no telltale bulge of the device under the collarbone. This could be one of those disruptive technologies where patient demand changes market dynamics.

The implantable pacemaker/defibrillator market is large, with 4 million active implants and 700,000 new implants occurring each year worldwide.

Takeaways: A leadless pacemaker is an obvious innovation to anyone who has worked in the cardiac stimulation field. Nanostim took the concept and ran with it while Medtronic took its time with what might be a technically superior solution.

While achieving lasting market share is more important than being first to market, Nanostim may be able to achieve both. Because they negotiated a strategic partnership with St. Jude Medical while the device was still in development, the company gained access to substantial resources, enhanced its credibility, and was able to reduce risk for investors by showing a clear path to exit. Nanostim also pursued the faster CE marking before FDA approval so that it could start selling the device sooner.

Read more:

Teeny Tiny Pacemaker Fits Inside the Heart – IEEE Spectrum.

News Release | Investor Relations | St. Jude Medical.

Weighing the Benefits of Medtronic’s Leadless Pacemaker | Qmed.

Medical Device Startup Fundraising: 5 keys for your pitch

Woman presentingIf you are leading a medical device startup, fundraising is your top priority. Here are five key points that you must address in every pitch that you make, no matter if it’s for a grant, seed investment from friends and family, angel investment, venture capital funding, or strategic partnerships with multinational medical device companies.

From the article:

  • Be clear on what your product is, right up front
  • Articulate the important problem you are solving
  • Define your customers
  • Spell out how you will create value with the $$ you are raising
  • Instill confidence in you and your team

Another way to look at the pitch is to think of it in terms of risk reduction. Most experienced investors talk about three main areas of risk in startup investing:

  • Technical Risk
  • Market Risk
  • Execution Risk

Investors will not move forward with an opportunity unless they believe that these key risks have been addressed and are below their personal threshold. Of course, you will never know that threshold so you must work to convince the investor that you have mitigated the three risks to the maximum extent possible.

Technical risk is all about the product or solution. Does your product solve the customer’s problem? Have you built a working prototype? Do you have an animal model? Have you performed animal testing? Are there important technical issues yet to be resolved? Do you have any intellectual property protection? Have you conducted a freedom to operate analysis? Does your product or solution depend on products or IP owned by other companies? Have you conducted beta testing? What’s your regulatory classification and plan? Are there more products in the pipeline?

Market risk is about the customer(s). Have you identified the problem? Is the problem a large one? Is the market opportunity big enough to justify the investment? Who are the customers? Why will they buy from you? What’s the competition (and don’t make the rookie mistake of saying that there is no competition)? Do you have evidence of demand? Do you have testimonials or at least interest from Key Opinion Leader customers? How do you plan to distribute and sell your product? How does your product or solution fit in today’s environment of managed care, healthcare reform, and evidence-based medicine? What’s your reimbursement strategy and plan?

Execution risk is about you and your team’s ability to convince investors that you can use their money to execute your plan. Does your team have the talent and experience to successfully commercialize your product? Do you have experienced and knowledgeable advisors, both business and clinical? Do you have a credible business model? What are your key milestones? What’s your exit strategy? Do you have a detailed pro forma income statement, especially for the period up to launch and for the two years after launch? Will you execute it exactly as conceived? Of course not, but you should be confident in your plan and your ability to execute. You should also have detailed contingency plans for the inevitable crisis when things go awry. 

Takeaways: Like many things, being successful at medical device fundraising requires being a great salesperson. Whether it’s a surgeon or an investor you’re selling to, put yourself in the place of that person. Be sure to address the five key points with details, evidence, and background information: product, problem, customer, milestones, team. Also keep in mind the risk tolerance of the investor. Your ability to communicate mitigation of technical risk, market risk, and execution risk will determine your success in fundraising.

Read more: Medical Device Startups: 5 essentials for your pitch deck | MassDevice.

Costliest 1 Percent Of Patients Account For 21 Percent Of U.S. Health Spending | Kaiser Health News

http://mhealthwatch.com/wp-content/uploads/2013/05/Infographic-Inside-Healthcare-Spending-in-America-300x231.jpgA recent U.S. government study revealed 1% of patients in the U.S. are responsible for a whopping 21% of healthcare spending. Wow, talk about a “target-rich environment.” We’re all familiar with the 80/20 rule where, in a given population, 20% of the group is typically responsible for 80% of costs, resources consumed or produced, etc. This news takes the 80/20 concept to a new level.

According to Kaiser Health News, the federal Agency for Healthcare Research and Quality report also said that just 5% of patients are responsible for 50% of all healthcare costs. On the other side of the ledger, the healthiest 5% of the population accounts for just 2.8% of spending.

The story behind the horrifying numbers: people with progressive, sometimes multiple chronic diseases such as kidney failure, diabetes, and COPD account for huge costs to the healthcare system. The patients in these groups even have a name: “super utilizers.” A different, not so flattering name is used in ERs everywhere: “frequent fliers.” On average, each super utilizer cost the healthcare system $88,000 in 2010.

In addition to overusing hospital emergency departments for their care, Kaiser said super utilizers suffer from a phenomenon called “extreme uncoordinated care” whereby they go to multiple, unrelated hospitals, (and all too often to the hospitals’ expensive ERs) for their care rather than a single outpatient clinic. The hospitals have no easy way to access patient records from other institutions to determine coexistent conditions and treatments. So they take the most direct path. They treat the immediate symptoms and discharge the patient.

In the past, hospitals could get away with just treating the patients’ symptoms and sending them on their way. With the advent of the Affordable Care Act (ACA), however, the incentives to the hospital are changing. Instead of a flat fee for service, the ACA provides penalties for high readmission rates and incentives for lowering readmissions within 30 days of treatment. From the article: “Hospitals have traditionally made more money readmitting patients than trying to prevent them from bouncing back.”

The ACA creates accountable care organizations (ACOs), groups of doctors, hospitals and clinics. The ACOs pool resources to treat Medicare and Medicaid patients more effectively and share in the savings. The ACOs work by creating and using coordinated care plans. The plans and their case managers have broad authority to do whatever it takes to help patients. By helping patients under the new ACA rules, the case managers help the hospitals increase their profitability.

The extra assistance to patients enabled by the coordinated care plans can include accompanying them to doctors’ appointments, paying for cab fare, buying food or furniture, phone calls and home visits to follow-up on prescription medication compliance, and more. These often simple interventions can have a significant effect on super utilizers. It is to be hoped that there will be a beneficial effect to the U.S. healthcare system as a result.

Takeaways: Healthcare financing is being reformed. That means healthcare delivery reform is coming as well. Hospitals are businesses, whether for profit or nonprofit. If their business models are threatened, they will respond to incentives and penalties to change. For medical device companies trying to introduce new products into this rapidly changing environment, realize that the traditional sales methods may work for a while longer. Realize also that the changes will affect purchasing decisions and procurement methods.

 

Read more: Costliest 1 Percent Of Patients Account For 21 Percent Of U.S. Health Spending – Kaiser Health News.

Mobile Health: Red Hot Market Opportunity

http://images.businessweek.com/ss/10/08/0823_mhealth/image/01_intro.jpg
Image from Business Week

Call it mobile health, digital health, eHealth, or”Consumer Health Technology” as Forbes does. By any name the emerging market sector is expanding rapidly and attracting lots of attention, entrepreneurs, and investors.

As I’ve previously written, the time for mobile health has arrived. We carry in our pockets mobile devices with more computing power than the Apollo 11 astronauts had when they landed on the moon. The devices themselves are bristling with sensors and wireless radios. Typical smartphones have temperature sensors, accelerometers, gyros, GPS sensors, ambient light sensors, microphones, touch sensors, and high resolution still and video cameras. They can communicate via Bluetooth, NFC, WiFi, and a number of cellular communications protocols. On-board storage can hold thousands of books and dozens of movies. Connected cloud storage provides effectively infinite storage capacity.

Innovative engineers are responsible for an ongoing explosion of single and multi-purpose external, wearable sensors that communicate wirelessly with smartphones. Smartphone manufacturers are increasingly integrating fitness tracking capabilities into their devices. For example, Apple’s latest iPhone included the M7 chip that can track user activities while minimally affecting battery life.

Application developers are creating sophisticated fitness and health tracking software using the aforementioned technologies. Applications are increasingly passive rather than active, meaning the user does not need to enter data. The apps and sensors detect activities and are able to collect activity data in the background. Others are working to connect the consumer devices and sensors with electronic medical and health records “in the cloud” for a variety of purposes.

There are two main segments in mobile health, regulated and unregulated applications. In the near term, there is tremendous growth and potential in the unregulated space because it’s a quick way to get to market. The consumer markets are very large but price-sensitive.

Of course, your mobile health startup will not be alone when you get there. Big players are either already in the market or they are entering rapidly. Nike, Weight Watchers, Aetna, Garmin, Apple, Samsung, and others are already battling to be the mobile health brand of choice. There are new entrants as well. Jawbone, BodyMedia, FitLinxx, and Fitbit are relatively new companies with trendy, stylish wearable devices.

Huffington Post reported that Berg Insight said 8.3 million wearables were sold last year, up from only 3.1 million in 2011. By 2017, that number is set to reach 64 million. mobihealthnews projects 13 million fitness-related wearables will be purchased just for corporate wellness plans by 2018.

For FDA-regulated devices and applications, the initial market is smaller but the potential is just as great. Regulatory clearances and approvals provide some barriers to entry but will ultimately serve to give early market entrants a head start and not much more. These devices promise to do much more than fitness tracking. They have the potential to monitor chronic diseases and overall health, to provide alerts for significant health-related events, to collect data for clinician use, and to provide specific health-related guidance using user-specific data.

In addition to FDA scrutiny, another significant issue is compliance with HIPAA laws regarding patient privacy. With what amounts to 24×7 data collection and connectivity, there will be enormous amounts of user-specific data in devices and in cloud databases. Companies will have to address data security preemptively or risk losing user trust.

I believe the benefits to the user and to the healthcare system far outweigh the risks and costs associated with these devices and applications.

For healthy individuals, mobile health can provide real time feedback into activities, fitness levels, sleep patterns, even diet information like nutrient balance and calorie consumption.

For aging individuals or those with chronic diseases, mobile health can monitor vital signs, check disease-specific conditions, provide reminders to take medications or perform physical therapy exercises, and send updates and alerts to family members and physicians.

For physicians, mobile health can provide another way to communicate with patients and can also check compliance with recommendations and prescriptions.

For the healthcare system, mobile health can contribute to healthcare Big Data, making it easier for researchers, drug and device companies, and policy makers to track, measure, and assess the health and activities of large populations.

Takeaways: Mobile health is a once-in-a-lifetime opportunity for entrepreneurs. If you have an idea, now is the time to commercialize it. If you are a software developer, find hardware partners. Likewise, if you have developed a sensor, team up with app developers to make a complete package. If you have an unformed idea, try to shape it around mobile health. Investors have taken notice. Rock Health is soliciting applications for funding at a variety of levels.

Read more:

Thinking of Starting a Business? Check Out Consumer Health Technology | Inc.com.

13M wearables to be used in corporate wellness plans by 2018 | mobihealthnews.

How highly sensitive, wearable thermometers could change digital health | mobihealthnews.

What health startups think of Apple’s new motion tracking chip | mobihealthnews.

Moves comes to Android, not afraid of Apple’s M7 | mobihealthnews.

Healthcare Startups Can Save Lives — And Rake in Big Money | Wired Business | Wired.com.

Health care and health insurance reforms are happening…at Walmart!?

Walmart logoHere’s an refreshing departure from all of the federal government gloom and doom news. Four hospitals around the U.S. including Virginia Mason Medical Center in Seattle have negotiated deals with large retailers Walmart and Lowe’s to provide comprehensive surgical care for knee and hip replacements to 1.4 million of the companies’ employees.

The kicker? Zero out-of-pocket costs, co-payments, deductibles, etc. But wait, there’s more. The arrangement, completely voluntary for employees by the way, provides travel, lodging, and living expenses for the patient and a caregiver.

The announcement expands a deal struck by the hospitals with Walmart in 2012 for heart and spinal surgeries along with organ transplants. The world-renowned Cleveland Clinic has been conducting a similar program, offering fixed-price cardiac procedures for a number of major corporations including Boeing.

The programs are attractive to the hospitals and corporations for a number of reasons. The corporations are self-insured. Reducing variability and uncertainty in healthcare costs is vitally important to the businesses. The corporations are large enough to be able to offer large volumes of patients for the high volume procedures.

The hospitals, already leading in terms of low complications and readmission rates, can use the guaranteed volumes to standardize procedures and improve quality even further. In exchange, I’m sure the partners agreed on large discounts to standard prices for the expensive procedures. And the patients, although not required to participate, get the sweeteners of no out of pocket cost and free travel. Sounds like a win for everyone.

In a separate development, Walmart announced that it was converting 35,000 part-time employees back to full-time status. Although that is a tiny fraction of Walmart’s 1.4 million employees, the latest action will result in those workers qualifying for employee-provided healthcare. Late in 2012, Walmart moved many full-time employees to part-time status in an action that was criticized as offloading their healthcare expenses on to taxpayers. Critics complained the workers earned so little that they would qualify for Medicaid health insurance through the new provisions of Obamacare.

Takeaways: While hardly novel, the agreements between the corporations and the hospitals are important because they have the potential to rein in out of control and spiraling healthcare costs. The hospitals will also be able to show exactly how they achieved their cost controls and quality improvements, giving them a competitive advantage and setting a great example for the rest of the country.

If you are developing a new device or technology, this should be a wake-up call. A key to cost control will be standardization. These hospitals will be highly resistant to adopt new technologies or purchase new medical devices unless you can show proof of positive effects on procedure costs, outcomes, and quality.

If you are in the healthcare insurance business, this disintermediation may not be a significant threat in the short term but be assured that other large corporations are watching or perhaps even conducting their own negotiations with high quality, high volume providers. The trend may prove to be a disruptive innovation in the long term.

Read more:

Walmart, Lowe’s strike deal with Virginia Mason on hip, knee surgeries | Local News | The Seattle Times.

Wal-Mart Returning To Full-Time Workers-Obamacare Not Such A Job Killer After All? – Forbes.

Digital health: what’s the business model?

image via svtechtalk.com

Connecting patients with each other, with clinicians and other providers, with insurers, and with healthcare companies via mobile apps on tablets and smartphones and on the web seems like a great idea. The unanswered question is can you make money doing it?

Articles have been written about how the Internet has enabled patients with chronic diseases and their families to connect with others with the same condition. The patients share stories about symptoms, treatment successes and failures, and try to support each other in what can be emotionally draining circumstances. That ability to connect with a vast community all over the country, perhaps even the world, was virtually impossible before the advent of the World Wide Web.

Other companies are trying to connect healthcare providers with their patients. Some are offering to connect patients with providers for online visits for a fee, effectively commoditizing the doctor-patient relationship.

Google famously shut its attempt at a personal health record site, Google Health, last year. Google Health required a lot of effort to use as it didn’t automatically connect with consumers’ Electronic Medical Records. That shortcoming left a small market of people who were OK with manually entering all of their health data. And that wasn’t a big enough user base for Google.

Healthcare companies, especially those with a B2C business model, are desperate to maintain relationships with consumers.

Providing apps and cloud storage can be costly. It’s not clear who will pay for the digital services.

Doctors and other providers have been incentivized into adopting EMR technology. It’s unlikely that they will invest in additional information technology for their patients.

It seems that consumers and patients love the free stuff. A few may be willing to pay for some services but many have grown to expect that someone else will foot the bill. And most non-healthcare smartphone and tablet apps are either free or at most a few dollars. That sets a low ceiling for any new health-related apps. It’s a tough way to grow a sizable healthcare or medical device company.

People have grown accustomed to paying almost nothing for their healthcare. Sure, there are co-pays and deductibles that have increased significantly in recent years but those are a small fraction of the cost of care. It will be a challenge to change this expectation for health-related apps and services.

In-app ads are probably not the way to go. If the ads are for healthcare-related items like prescription drugs, the patients will lose trust in the service. If the ads are specifically targeted to the patient’s medical condition, the service will be accused of spying on the patient.

Perhaps healthcare companies will regard the cost of developing and providing apps as a marketing expense.

It’s an interesting dilemma. Free apps and services will draw large numbers of users. But monetizing the app via ads turns off many people. Charging for the services drastically reduces the potential market. Absorbing the expense internally places the app/service on the list of things to be cut when the company’s overall business stagnates or declines.

Takeaways: There is enormous interest in apps and services for mobile health. If you are developing products or services in this space, be sure you know how you are going to make money. It’s not a market if you can’t monetize it.

The traditional medical device business model doesn’t seem to apply here. If you procure funding, develop a product, then show economic or health benefits, who do you sell to?

Perhaps partnering with noncompeting companies interested in the same population is a creative way around the problem. If you can deliver large numbers of consumers/patients via a sponsored app to a partner like a big pharmaceutical company, you may be able to avoid some of the pitfalls and objections.

It’s prudent to put a lot of effort now into developing a viable business model. After all, when you start pitching to investors, one of the first questions asked will be, “how do you plan to make money?”

Read more:

Will Any Health App Ever Really Succeed? | MIT Technology Review

Patients share tips online for managing diseases | SFGate.

Improving Patient Engagement Equal Parts Technology, Empathy | Computerworld

Patients Eager To Access Data Including Medical Imaging Through Online Portals (infographic) | MDDI Medical Device and Diagnostic Industry News Products and Suppliers.

A Cautionary Tale: Biotech firm Atossa recalls its only product | The Seattle Times

Atossa Genetics is an early stage biotechnology company in Seattle developing breast cancer diagnostic tests and medical devices using molecular diagnostic technology. The publicly traded company ran afoul of FDA regulations earlier this year and last week announced a voluntary recall of its products, causing its stock to tank.

The company bills itself as “the breast health company (TM).” Atossa is small, with only ten full-time employees (at least five of whom are senior management executives) according to Yahoo Finance.

Here’s a timeline of company events:

  • November 8, 2012 Atossa Genetics, Inc. Announces Initial Public Offering (NASDAQ exchange, IPO value $4 million). That’s not a typo. It really was $4 million, 800,000 shares at $5 per share.
  • February 21, 2013 Atossa Genetics, Inc. received a Warning Letter from the FDA regarding its Mammary Aspirate Specimen Cytology Test (MASCT) System and MASCT System Collection Test. From the company’s press release:

“The FDA alleges in the Letter that following 510(k) clearance the Company changed the System in a manner that requires submission of an additional 510(k) notification to the FDA.”

  • March – September 2013 Atossa Genetics Inc. continues marketing its products, announcing numerous distribution and partnering agreements as well as supporting women’s health events.
  • September 18, 2013 The company’s stock closes up almost 21% in one day at $6.00 on volume of more than 8.4 million shares traded when it announces a distribution agreement with medical distributor McKesson.
  • October 4, 2013 Atossa Genetics Inc. initiated a voluntary recall to remove the ForeCYTE Breast Health Test and the Mammary Aspiration Specimen Cytology Test (MASCT) device from the market. This voluntary recall includes the MASCT System Kit and Patient Sample Kit.
  • October 7, 2013 Atossa Genetics Inc. stock opens at $5.32 and quickly drops to $2.66 (down 50%) on the news of the voluntary recall. The stock closed today at $2.45, an all-time low.
  • October 7-8, 2013 At least six law firms have announced initiation of shareholder lawsuits in the aftermath of the recall.

Apparently, the company and the FDA disagreed on whether a new 510(k) was required after the company changed the Instructions for Use (IFU) on its product. The company seems to have decided to continue marketing without submitting a new 510(k). What happened next is unclear but the “voluntary” recall ensued.

The company told The Seattle Times that it currently has “sufficient cash for the next 8-12 months of operations without raising additional capital,” though it cautioned that the cost of the recall and other associated expenses is not yet known. Sales revenues were about half a million dollars for the first half of 2013. Atossa reported a $2.2 million loss for the same period.

According to The Seattle Times, Atossa is continuing to develop other diagnostic tests but “will be reassessing the regulatory status of these products … in light of our recent experience,” said CEO Quay. Seems like a prudent action given their recent history…

Takeaways: Do not disregard the FDA. They have the power to shut down your company. If you have a fundamental disagreement with FDA, hire a regulatory consultant and attorney and take their advice.

Make sure you have people with experience in commercializing medical devices, especially regulatory affairs, on your executive team and board of directors.

Think carefully before deciding that an IPO is your best financing option. There are very large fees to be paid and the reporting requirements (Sarbanes-Oxley, etc.) are much more revealing – and onerous – than anything required if you remain private and use VCs or angel investors as your sources of capital.

As the article points out, there are plenty of attorneys waiting to represent disgruntled shareholders. Perhaps you can prevail against all of this adversity but think of the opportunity costs in lost time and cash spent on lawyers and regulatory revisions instead of product development or marketing.

Read more: Biotech firm Atossa recalls its only product | Business & Technology | The Seattle Times.

8 healthcare applications for Microsoft Kinect, 6 reasons not to pursue them

Microhttp://dri2.img.digitalrivercontent.net/Storefront/Company/msintl/images/English/en-INTL_Kinect_for_Windows_L6M-00001/en-INTL_L_Kinect_for_Windows_L6M-00001_mnco.jpgsoft’s Kinect is absolutely amazing technology. And Microsoft keeps improving it. Did you know that Kinect has multiple potential healthcare applications?

If you have an early teenage or “tween” kid, you probably have an Xbox gaming system. The Kinect sensor technology is perfect for all sorts of innovative interfaces for dance, exercise, and role-playing games.

The Kinect sensors and software have the ability to perform skeletal mapping on multiple people simultaneously, to detect 3D gestures and motions and facial and voice recognition. Kinect can even determine users’ heart rates! The device also has the ability to “see” in the dark with infrared camera technology.

The Microsoft Kinect is an amazing amalgam of sensor technology. I’m sure it has many useful and possibly disruptive applications in healthcare and other industries.

Here’s why you should not base your healthcare product or application on Microsoft’s Kinect:

  1. Single sourcing is risky for any startup business or new product development organization. You have no alternative way to duplicate  or replicate the Kinect functions if Kinect or its key functions are unavailable for any reason.
  2. Healthcare is not Microsoft’s core business – it could remove access at any time and/or de-emphasize it in any number of ways. In fact, Microsoft is in strategic transition right now and its long-time CEO, Steve Ballmer, announced recently that he will be retiring in 2014.
  3. You have no access to the device’s source code – access to that code might be necessary if you are developing an FDA Class II or Class III device.
  4. The Microsoft Kinect is based on a console or PC-centric world view. What about tablets and smartphones? Oh, and don’t expect to ever see an Android or iOS device with Kinect capability.
  5. Although Microsoft has made an SDK available for Kinect development on Windows operating systems, the installed base of 24 million Kinects is almost all in Xbox gaming systems. Microsoft is not interested in giving up valuable real estate on its premier gaming platform to comparatively low volume and low margin healthcare apps. If you develop a Kinect-dependent windows app, you will a). have to wait for an installed base to develop or b). take on the added risk of marketing Kinect hardware to create your own installed base.
  6. You will have little technical support from Microsoft simply because your business potential is small compared to their other ventures.

If those six reasons aren’t enough to give you pause, here are the healthcare market areas identified by MobiHealthNews that are particularly suited for Kinect-enabled applications.

  1. Fitness and Exergaming – games and exercises to get people off the couch and on their feet
  2. Physical Therapy  – conduct PT sessions, monitor recovery
  3. Surgery Support  – hands-free image manipulation
  4. Autism Screening and Therapy – not quite sure what the advantage is here. Perhaps some on the spectrum can’t relate as well to people?
  5. Virtual Visits and Virtual Nurses – automated nursing visits. I think this is a bad idea, as senior shut-ins crave human contact.
  6. Virtual Group Therapy – avatar-based online group talk sessions (I believe you can do this with Google Hangouts as well)
  7. Aging in Place and Fall Prevention – gait analysis and fall prediction
  8. Helping the Blind to Navigate and the Deaf to Communicate – using machine vision and text to speech

Takeaways: It’s incredibly risky to develop new technology that’s based on someone else’s proprietary technology. It’s even more risky if that proprietary technology is primarily focused on non-healthcare applications.

You should consider open source projects as an alternative. There are many open source projects all over the world. If it’s critically important to you, try organizing and starting an open source project to support your development work.

If you must use the proprietary technology, try to negotiate a development agreement that places key parts of the technology in escrow so it is still available to you in the event of a default to the agreement. This tactic doesn’t work with gigantic corporations like Microsoft but it may be effective with smaller partners.

Read more: Eight ways the Microsoft Kinect will change healthcare | mobihealthnews.

The world’s craziest toothbrush cleans your teeth in six seconds and is 3D printed | qz.com

Blizzident photo - world's craziest toothbrush
Blizzident photo – world’s craziest toothbrush

The Blizzident toothbrush may be the most innovative toothbrush ever developed. It is custom manufactured for each user and provides a complete teeth cleaning in 6 seconds. It even has the ability to floss between teeth and clean your tongue at the same time.

Blizzident took advantage of several technology trends in developing the Blizzident toothbrush. Mass customization, 3D scanning, and 3D printing enable the commercialization of a potentially disruptive product that would have been impossible or impractical to make only a few years ago.

Developed by an international team of dental experts, engineers, and computer scientists, the Blizzident toothbrush is commercially available today. Sold on the Blizzident website,   the device initial cost is $300. There is also a one-time expense of $75-200 for impressions and/or digitization of your teeth. According to Blizzident, the toothbrush will last twelve months. Replacements will cost $89 for refurbishment or $159 for an all-new device.

The Blizzident toothbrush can be fitted for kids, although a new scan is required each year because of the ongoing growth and changes in childrens’ teeth.

The toothbrush works by deploying hundreds of ultra-fine bristles that are angled to reach every nook and cranny of your teeth, including the all-important areas under the gumline. The user bites, chews, and grinds his/her teeth for six seconds, brushing all teeth and surfaces simultaneously. According to the company, that’s the equivalent of a three minute manual toothbrushing session. Clinical study results are promised but not yet available.

I have a dental checkup next week and I plan to ask my dentist what he thinks of this revolutionary technology. The somewhat steep price tag may discourage many people but it will probably decline over time. I’m sure there are sufficient numbers of people who are either gadget freaks or just really care about their teeth to make an initial market. It will be interesting to see how Blizzident’s awareness spreads. The story is compelling for both traditional media and for social media.

Takeaways: Who would have thought that the humble toothbrush could be improved upon “again”? A Seattle area company, Optiva, successfully innovated Sonicare, a “next generation” electric toothbrush back in the 1990s. Optiva was acquired by Philips Healthcare in 2000. In 2001, Sonicare was the best-selling electric toothbrush brand in the USA.

For startups, no idea should be considered too small to commercialize. Likewise, no existing product or technology should be thought of as too established to be improved upon. Mass customization is a compelling trend – people want things that uniquely fit them. 3D scanning and printing are powerful tools that make disruptive innovations and novel business models possible.

Read more: http://qz.com/129919/the-worlds-craziest-toothbrush-cleans-your-teeth-in-six-seconds-and-is-3d-printed/

http://www.blizzident.com/

Frazier Healthcare raises $377M venture fund, surpassing target | GeekWire

Wow, looks like a repeat of the 1990s! A new venture fund from Frazier Healthcare is seriously good news for the healthcare startup community. I hope it’s the beginning of a trend and that we’ll see a few more VCs make fund announcements.

For the past few years, VCs have been pretty much absent from the market. Angel investors were left as one of the few financing options for early stage medical device and biotech companies.

Perhaps we will see a return of past practices where angel investors concentrated on very early financing rounds and then VCs stepped in. Who knows? But I believe it’s on balance a positive development for the industry.

Takeaways: There is a lot of money out there “on the sidelines.” Frazier may be taking a leading role in revitalizing healthcare startup financing. At least it shows that a lot of wealthy individuals and fund managers believe in the future of healthcare as an investment opportunity. Startup CEOs, keep pitching!

Read more: Frazier Healthcare raises $377M venture fund, surpassing target – GeekWire.

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.

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

Give Us Our Damn Lab Results!! (etc.) | The Health Care Blog

Patients are empowering themselves. We are overwhelmingly using Internet sites like WebMD and social media to research and discuss symptoms, diseases, and treatments. We are purchasing and using digital health devices and software by the millions.

Now patients are starting to demand direct delivery of lab test results instead of waiting for that call from the doctor’s office that always seems to be delayed or worse, never made.

A little-known proposed regulation issued in 2011 by the Department of Health and Human Services would allow lab test providers to send test results directly to patients. While a final regulation has not been issued, perhaps due to the current political climate in Washington, the regulation is being welcomed by patient advocates and viewed with skepticism by some physicians.

As the article states,

Increasing the ability of patients to have direct access to all their medical information allows patients to more effectively manage their own health care and organize electronic copies of their own data – a major benefit of the health care system’s ongoing transition to digital records…Most broadly, this expanded access gives patients the ability to be as engaged as they choose in their own health and care.

Some unenlightened physicians are lamenting the perceived loss of control and cite the risks involved when patients have uninformed access to clinical data. Other doctors welcome the opportunity to stay in the loop while patients take more responsibility for their own healthcare and data.

Again, from the article:

… A 2009 study published in the Archive of Internal Medicine indicated that providers failed to notify patients (or document notification) of abnormal test results more than 7 percent of the time. The National Coordinator for Health IT recently put the figure at 20 percent.  This failure rate is dangerous, as it could lead to more medical errors and missed opportunities for valuable early treatment.

How can sending lab test results directly to patients be a bad thing if the doctor still receives a copy of the results and continues the practices of alerting patients to abnormal results while offering to interpret the data?

In another empowering development, some patients are now able to skip the dreaded visit image from geekwire.comto the primary care physician, the one where they wait, wait, and wait some more while being exposed to who knows what communicable diseases in the practice’s waiting room. People in the south Puget Sound region of Washington in the Franciscan Health System service area have the ability to have a virtual visit with a physician 24 hours a day, 7 days a week for a reasonable $35 fee (not paid by insurance). The consultation may result in a referral to a physical facility or prescribing of medications. How convenient!

From the article:

“In some cases, patients just want to know if they need to go to the emergency room,” said Dr. Ben Green of Franciscan Virtual Urgent Care. “In fact, most of the time our providers are able to keep them out of the emergency room and patients are quite happy about that.”

The virtual visit with a real doctor is conducted via Skype video teleconferencing or by plain old-fashioned telephone.

The telemedicine service is actually offered by Carena, a Seattle-based company, in partnership with Franciscan. Carena started offering the service in 2010 to private companies and is now expanding to healthcare systems.

Takeaways: Empowered patients and consumers represent an enormous opportunity for medical device and digital health companies. The pharmaceutical industry proved the viability and profitability of direct-to-consumer marketing in the 1990s.

As more patients are comfortable managing their own electronic health records and in keeping their records “in the cloud,” there will be increasing demand for apps, software, and web services to facilitate and secure those transactions and records. The market niche of people who self-monitor their health, fitness, and vital signs with digital health devices and apps will steadily increase as the devices and software get more capable and easier to use.

Read more:

Give Us Our Damn Lab Results!! | The Health Care Blog.

Feeling sick? Washington health system now offers virtual doctor appointments for $35 – GeekWire.

Wow of the Week: A flu vaccination you could give yourself, with no shots involved | MedCity News

Very cool, and a great use of microfabrication technology. This microneedle array delivers its vaccine payload painlessly into the skin and the needles dissolve. Perhaps your healthcare insurer will mail your vaccine to you in the not too distant future.

The microneedle array (still in the animal research phase) could be an important tool for vaccine delivery in developing countries where vaccine doses must be transported to remote populations and refrigeration equipment is not readily available. And perhaps it will increase the participation in flu and other vaccine programs by people who have needle and/or pain phobias.

I’m aware of at least one other company commercializing a microneedle-based medical product. The startup company is Kitotech, based in Seattle, and they have developed a product called Kitostitch. The Kitostitch product is intended to replace steri-strips for primary wound closure. The value proposition is a little less clear in that case. In my experience, it’s tough to oust incumbent technology even if it’s mediocre, when there’s no nagging problem being solved.

Takeaways: There are plenty of unsolved medical problems, some big and some small, that can benefit from smart innovation. The technology of vaccine injection would seem to have been perfected or at least exhausted of innovation but these researchers created a completely new inoculation technology. Complacency is the enemy of innovation. Do not ever assume that a “better mousetrap” cannot be designed for a particular need. Most important is that you keep looking for unsolved problems and unmet needs.

Read more: Wow of the Week: A flu vaccination you could give yourself, with no shots involved | MedCity News.

Hips and knees: Consumers Union calls for no-cost revision warranties | MassDevice

Adding patient warranties to hip and knee implants would be a disruptive move if it’s ever offered…or mandated.

guaranteed

Implants are Big Business. The article states that there were 1.2 million hip and knee surgeries in the U.S. in 2011. That number is expected to increase to 4 million by 2030 as the last of the Baby Boomers ages into their golden years. Half of those surgeries, however, will be in patients under 65.

Of course, a major challenge in orthopedic implants is making them and implanting them so they last the life of the patient. With many people living well into their 80s and 90s today, an implant may be expected to last 25-30 years.  Revision surgery is messy and expensive. Patients are not happy about having to undergo implant surgery for a second time just because they outlived the first implant. And the risks of implant surgery increase as patients age.

Since implants are a fraction of the cost of joint surgery (a substantial fraction, but a fraction nonetheless), offering a warranty on the entire revision surgery would be a huge financial liability for the medical device manufacturers and unlikely to happen unless compelled by law. Of course, there are other big players involved, namely Medicare. Since most of the implant failures occur in older patients, Medicare foots almost all of the bill.

As we get deeper into healthcare reform and start to have fact-based discussions about costs vs.outcomes (one can hope, right?), issues like this should surface for policymakers to address. Why should a medical device company benefit from an inferior design by being paid for a second implant? What about surgeons and hospitals – if the implant is installed incorrectly, shouldn’t the surgeon and hospital bear some of the cost of fixing it, even if it’s ten or fifteen years later?

In my opinion, perfecting the design of hip and knee implants is a high stakes strategy. The first company to succeed in deploying a “lifetime” implant will start to gain market share at the expense of its competitors. Perhaps it will evolve a business case that enables it to offer the revision warranty. In that event, the market share gains will accelerate and weaker companies will disappear or be absorbed by the stronger.

I would bet that there are many biomedical engineers and researchers feverishly working on this challenge right now.

Takeaways: While in many ways we are in the golden age of medical devices, major changes are on the horizon. Things like lifetime costs and outcomes-based decision making are getting more attention every day. Advocacy groups like AARP and Consumers Union are becoming more vocal and more active. Government agencies are more involved than ever and there’s no end in sight. You should be prepared as the old ways are ending. Not for much longer can you count on selling a device by persuading a physician to demand it and then being able to bank on that revenue stream for years. Data – lots of it, and exhaustively analyzed – will be the most persuasive way to sell and to affect policy.

Read more: Hips and knees: Consumers Union calls for no-cost revision warranties | MassDevice.

Countries With Most (and least) Efficient Health Care: | Bloomberg

Care to guess how the USA ranks in healthcare against its peers?

The U.S. spends the most on health care as a percentage of GDP with the worst outcome compared with other developed countries.

We ranked 46th out of 48 countries in this study. The U.S. spends $8,608 per capita on healthcare while the top rated country, Hong Kong, spends just $1,409. Hong Kong also has the highest life expectancy at 83.4 years while the U.S. is in the middle of the pack at 78.6 years.

Each country was ranked on three criteria: life expectancy (weighted 60%), relative per capita cost of health care (30%); and absolute per capita cost of health care (10%). Countries were scored on each criterion and the scores were weighted and summed to obtain their efficiency scores. Relative cost is health cost as a percentage of GDP. Absolute cost is total health expenditure, which covers preventive and curative health services, family planning, nutrition activities and emergency aid. Included were countries with populations of at least five million, GDP per capita of at least $5,000 and life expectancy of at least 70 years.

If you object to Hong Kong being classified as a country, the next five highest ranking countries are Singapore, Israel, Japan, Spain, and Italy. The highest per capita annual healthcare expense in this group is in Japan, at $3,958 – less than half that of the U.S. Average life expectancies in these countries range from 81.8 to 82.6.

We are spending more and getting less than just about any other country in the world. When I hear people like politicians and business leaders say, “We have the best healthcare system in the world,” I wonder if they don’t have access to these facts, if they are speaking about the excellent care available to the privileged few with excellent healthcare benefits, or if they are in denial about the reality of our situation.

Takeaways: There are lots of opportunities (i.e., problems that need solving) when it comes to healthcare economics in the U.S. The media should reports facts like this Bloomberg article and call out politicians who crow that “we have the best…” We need big solutions to solve this big problem. Perhaps we can learn by modeling best practices from other countries. If you (or whomever) doesn’t like Obamacare (a modest first step), what’s your proposed solution? It’s pretty clear that continuing the policies of the past 70 years will not result in positive change.

You can point fingers in lots of different places: defensive medicine, intervention-based reimbursement, poor diet and lifestyles of Americans, medical procedure pricing opacity, outrageous compensation for hospital and medical insurer CEOs, Medicare restrictions on drug price negotiating, direct-to-consumer drug marketing, overbuilding of hospitals, and on and on. Medical device overuse and misuse is part of the problem as well, although the entire industry is “only” 6% of total healthcare expenditures.

The Affordable Care Act, although flawed, is at least a first attempt to address some of these issues. Early reports indicate that it may be having positive effects already.

Read more: Most Efficient Health Care: Countries – Bloomberg Best (and Worst).

Digital health needs more physician entrepreneurs | mobihealthnews

Are you aware of the Society of Physician Entrepreneurs (SOPE)? I was not. The CEO of SOPE, Dr. Arlen D. Meyers, a practicing ENT surgeon, says that doctors are not trained in business while in medical school or residency. That has certainly been my experience.

While many physicians have an entrepreneurial mindset, only a few I’ve met and worked with have business skills that would enable them to start and/or run a company. Some are just natural entrepreneurs although I think there are far more who believe they have business acumen but don’t have any or don’t have much business savvy. Those doctors are the toughest to work with as a medical device commercialization executive.

To address part of the problem, Dr. Meyers has created a certificate program in bioinnovation and entrepreneurship at the University of Colorado. The program is intended for postdoctoral students not interested in a career in academia.

Dr. Meyers also said, “most innovation in healthcare and medicine leaves out doctors and patients, particularly in the lucrative fields of drug and medical device development.” I’m not sure exactly what he’s driving at here. Most device companies, startups included, are happy to work with innovators or key opinion leader physicians to help create, develop, refine, and commercialize new products. They are well-compensated for commercial successes, much less so for market flops, of course. And patients are a necessary part of the process.

Medical device commercialization is not for amateurs and it’s not a part-time gig. Most physicians are incredibly busy people. It seems to me their natural role in a startup or on a new product development project in a larger company is to serve as a clinical/healthcare system resource, product endorser, and source of referrals. Of course, they are free to try their hand at business and create their own startups.

Dr. Meyers also points out that the burgeoning digital health segment is underrepresented by physicians. That may be because the technology, networking, and systems interoperability dimensions of digital health solutions and products tend to be far outside most physicians’ areas of expertise. However, there are multiple opportunities for doctors to innovate. For example, their detailed knowledge of the healthcare delivery system may have given them specific ideas about how to improve patient care delivery with apps. He also believes that non-face to face care using telehealth or digital health products and apps is going to be a substantial opportunity for entrepreneurs, whether physician or layman. Any of those ideas could be the basis of a digital health startup.

Takeaways: Medical device and digital health startups, even with their high failure rates, are attractive to at least some physicians – those with entrepreneurial mindsets. Startup founders and CEOs should identify and recruit like-minded doctors for their executive teams, boards of directors and advisory boards. If you are a digital health startup CEO with a tech/IT background, you can minimize the risk of making bad or just uninformed product decisions and enhance your commercial products by finding and engaging with an entrepreneurial physician.

Read more: Digital health needs more physician entrepreneurs | mobihealthnews.

mHealth, eHealth, Mobile Health, Connected Health: Not Fads, Not Going Away

Smartphones can be addictive. The convenience of obtaining information and maintaining social connections is a powerful benefit for just about everyone. Health-related smartphone apps have the potential to use that addictive property to inform and improve the health of smartphone owners.

Close to 60% of all adults in the U.S. use a smartphone. The proportion approaches 100% in well-educated, affluent, young-to-middle-aged, or urban/suburban demographic groups. Using “diffusion of innovation” terms, smartphone adoption has penetrated past the Early Majority and is deep into the Late Majority. That’s more than enough for a startup to base its technology platform on.

There are more than 40,000 smartphone apps focused on mobile health, growing each day. Many savvy entrepreneurs have identified mobile health as a Next Big Thing and are trying to stake out their territory during this “wild West” phase of the mobile health market.

According to an executive at Qualcomm, the exponential growth in mobile or connected health is being driven by two factors. The user experiences are getting better all the time and there is real opportunity for cost control at the provider level. App usage is growing even among clinicians: 34% of clinicians reports using apps to monitor data from medical devices now, up significantly from the 27% who reported doing so in 2012.

Of course, things like user interfaces and app features can make a huge difference in adoption and patient satisfaction. One recent study of diabetes patients showed that patients with passive monitoring and reporting apps on their smartphones to manage glucose levels had better adherence to their glucose management plans and also had better health outcomes than patients who used apps requiring manual intervention.

According to a Brookings Institution study, remote monitoring technologies could save $197 billion in the U.S. over the next 25 years. And adoption is spreading rapidly. For example, 45% of physicians report using mobile apps for data collection at the bedside compared to 30% in 2012. More than 70% of providers use mobile devices to access patient Electronic Medical Records (EMRs). Physicians are eager adopters of mobile devices with more than 66% reporting use of tablets in their professional practices.

Joseph Kvedar, MD in an article on The Health Care Blog, writes:

Mobile health offers us many transformational opportunities.  We can use smart phones as a data upload/home hub device.  We can use them as a device to engage the consumer around health content.  We can use them to display health-related information at  just the right moment in just the right context.  We can use the cameras to capture relevant health information (e.g., home test results).  We can use them to message you in the moment with contextually relevant, motivating messages.

Add to the list that we can harness the addictive properties of these devices to, perhaps, make health addictive.

Takeaways: The market opportunity for mobile health is here and now. Devices, sensors, networks, software, and connectivity have never been better, cheaper, or easier to access. Patients and providers have adopted mobile technologies in huge numbers. Yes, there is plenty of competition but there are rewards for any startup or company that can identify a market niche, develop a solution, and deploy a product that meets user expectations while maintaining a long term strategy of reducing costs and improving clinical outcomes.

Read more:

Why mHealth is not a fad but is here to stay (infographic) | MDDI Medical Device and Diagnostic Industry News Products and Suppliers.

Could Mobile Health Become Addictive? | The Health Care Blog.

The Perils of eHealth | MDDI Medical Device and Diagnostic Industry News Products and Suppliers.

Robotic Surgery: Too Much, Too Soon? | medscape.com

With a market capitalization of more than $15 billion, Intuitive Surgical is a major player in the medical device industry. It is also the only source in the world for robotic-assisted surgery products. An evolving controversy is whether the patient benefit from a robot-assisted procedure is equal or greater than the additional cost to the healthcare system.

Robot

In recent articles, the editors at Medscape (a physician-oriented professional website owned by WebMD) have raised the issue of whether robotic-assisted surgery is being adopted too fast and being promoted too aggressively.

 

Some facts:

  • The number of procedures performed worldwide with Intuitive Surgical’s da Vinci Surgical System increased 25% from 2011 to 2012, to 450,000. 
  • The da Vinci Surgical System has been installed at more than 2,000 hospitals around the world at a cost per installation of $1.5-2.2 million plus annual service fees of about $160,000.
  • Intuitive Surgical has about 2,400 employees and had 2012 revenues of $2.18 billion, $908k per employee. That’s getting close to the almost mythical $1 million per employee revenue level and in the same neighborhood as Google ($931k).
  • The price for proprietary disposable instruments for the da Vinci System is $600-1,000. Each procedure uses 3-8 instruments.
  • A recent analysis reported that da Vinci surgeries add costs of 20% per procedure on average. The incremental costs are currently absorbed by hospitals because reimbursement rates are set by procedure, not surgical technique or technology. It is not yet clear if the extra costs will eventually be reimbursed by insurers.
  • Earlier this year, the president of the American Congress of Obstetrics and Gynecology (ACOG), issued a statement recommending against using robotic devices in routine gynecologic procedures – perhaps motivated by a 2013 JAMA study reporting that the percentage of robotically assisted hysterectomies increased from 0.5% in 2007 to 9.5% in 2010. Studies have shown that use of robotics has no clear clinical benefit over laparoscopy (the gold standard). Additionally, costs for robotically assisted hysterectomy were reported in the JAMA study to be $2189 more per case than for laparoscopic hysterectomy.
  • Some hospitals appear to be hyping and/or aggressively marketing their robotic capabilities. Investigators reported In a 2011 study that 41% of hospital websites promoted their robotic surgery capabilities and that clinical superiority was claimed on 86% of these sites, while none mentioned risks.
  • Just as with any new technology, there is a learning curve when adopting robotic-assisted surgery technology. During the learning curve, risks are higher.

Some opinions:

  • Intuitive Surgical has done a brilliant job in developing and marketing its da Vinci System, perhaps too good. The company shipped its first commercial system in 2000 and has averaged 25% annual growth ever since. The low-hanging fruit may be gone.
  • Whether deliberate or accidental, Intuitive has created the perception among the public that robotic-assisted surgery is “better” than alternative approaches. This creates demand for the procedures and indirectly, demand for Intuitive’s products.
  • There are few, if any, randomized clinical studies demonstrating a significant clinical benefit of robotic-assisted surgery over the gold standard technique, either open surgery or laparoscopic surgery. There are a few studies indicating limited advantages in outcomes in very specialized indications and a few others that show perioperative benefits such as reduced need for transfusion.
  • Some hospitals have irresponsibly hyped the benefits of robotic-assisted surgery to patients. Perhaps this is in response to competition and perhaps partly to attract patients in order to justify the large investments in robotic equipment and training.
  • Some surgeons are aggressively adopting the new technology even where there is no clinical advantage or indication. Perhaps they fear losing the revenue stream from patients or the patient stream from referring physicians.
  • The winds of change (healthcare reform in Obamacare, negative publicity about complications and costs) are starting to blow. Intuitive’s share price is down more than 34% from its peak value reached in February 2013.

Takeaways: There is a fine line between aggressive promotion and hype. In this case, the urgency and greed triggered by the “robotic gold rush” may have caused the hype line to be crossed by more than one party. Few healthcare companies conduct randomized clinical trials unless required by regulatory bodies or customers. Given the changes occurring in healthcare today, it is prudent to include outcomes and clinical studies in your commercialization plans. If your technology or product is radically different from the gold standard, you must seriously consider learning curve effects as part of market adoption. Basic training, advanced training, certification, proctoring, and partnering with professional organizations are all options when introducing new technologies.

Read more: Robotic Surgery: Too Much, Too Soon?.

A Twenty-Year Snapshot of the Health of the American People | JAMA

Fascinating glimpse into the state of our health in the U.S. and how it changed over a period of twenty years from 1990-2010.

This is a “glass half-full/glass half-empty” story. If you are in the healthcare industry, it seems that there is going to be a limitless supply of patients with chronic medical conditions for the foreseeable future. On the other hand, if you are a typical American or if you have some responsibility for public health, there is much to be concerned about. We’re spending more than ever and more than everyone else on healthcare. Although the overall health of our nation’s citizens is improving, it’s not improving as much as other wealthy countries (which are spending far, far less on healthcare).

A few examples from the abstract:

  • Ischemic heart disease, lung cancer, stroke, chronic obstructive pulmonary disease, and road injury were the most prevalent lethal conditions in terms of sheer numbers and were responsible for the most years of life lost (YLL) due to premature mortality.
  • Alzheimer’s disease, drug use disorders, chronic kidney disease, kidney cancer, and falls are increasing in incidence rates most rapidly on an age-adjusted basis.
  • Low back pain, major depressive disorder, other musculoskeletal disorders, neck pain, and anxiety disorders represented the conditions with the largest number of years lived with disability (YLD) in 2010.
  • While we are living longer, we’re living with disabilities. As the US population has aged, years lived with disability are growing faster than years of life lost overall.
  • Our lifestyle choices are disabling and killing us. Poor diet, tobacco smoking, high body mass index, high blood pressure, high fasting plasma glucose (pre-diabetes), physical inactivity, and alcohol use were the leading risk factors in disability and premature death combined.
  • Chronic disease and chronic disability now account for close to half of the US health burden.
  • We’re losing ground to our peer countries:

Among 34 OECD [Organisation for Economic Co-operation and Development] countries between 1990 and 2010, the US rank for the age-standardized death rate changed from 18th to 27th, for the age-standardized YLL rate from 23rd to 28th, for the age-standardized YLD rate from 5th to 6th, for life expectancy at birth from 20th to 27th, and for [healthy life expectancy] HALE from 14th to 26th.

No matter what you may think of Obamacare, single payer healthcare, or market-based solutions, these facts clearly show that we as a nation are not getting any “bang for our healthcare buck.” I don’t think that anyone believes we can spend our way out of this dilemma.

Takeaways: There is more data available than ever before to analyze health trends. There is an enormous interest in new technologies and methodologies that can improve a patient’s health without increasing costs. There are any number of clinical conditions upon which a startup could focus and have a significant effect on our healthcare system. Disease prevention and lifestyle modification look to be areas of focus and rapid growth. As you develop your latest medical device or as you plan your medtech startup, keep the big picture in mind. Show that your device or technology will not only work better than alternatives but that it will demonstrably improve patient health and save money.

Read more: JAMA Network | JAMA | The State of US Health, 1990-2010:  Burden of Diseases, Injuries, and Risk Factors.

Obamacare is Changing Market Access | MDDI Medical Device and Diagnostic Industry News

Access to the healthcare market is changing for medical device companies, particularly for startups with new technologies and no track record. It’s not clear to me if Obamacare is really the driver or if it’s the larger initiative of “healthcare reform” that’s causing providers and payers to make changes in the way they do business.

In any event, providers such as hospitals have become more demanding of new products and new companies. They want to see evidence of clinical efficacy as well as evidence of economic efficacy (outcomes) before they agree to purchase or in some cases, trial the products. Importantly, payers – private insurers and Medicare – are slowing, reducing, or even denying reimbursement for new products and procedures. The outcomes data is being called comparative effectiveness research. Most current data supplied by industry has been deemed insufficient. Evidence of the increased demand for data is the current emphasis on and support of healthcare IT applications by government entities as well as payers.

The authors of this article argue that responsibility for market access must be broadened to become an integral part of the commercialization process like regulatory clearance and that it should be applied to a broad cross-section of the organization and also throughout the product life cycle. This is a major change in the way that most companies conduct product development and commercialization. It will require executive management involvement and changes to strategic goals and plans to implement and sustain such a change.

For example, it is in the best interests of the organization to create and provide “strong evidence of clinical differentiation.” Not only will the evidence make it easier to get agreement from providers and payers, it also provides a degree of protection against premature commoditization. It’s equally important to lobby government officials, either directly or through a trade group. Finally the organization must be sure to protect itself by retroactively addressing products already in the market, as a demand for data could come at any time and cause significant disruptions to manufacturing, sales, materials management, etc.

Takeaways: Startup CEOs and medical device product managers, project managers, and program managers must incorporate comparative effectiveness research for both clinical efficacy and economic effectiveness into their strategic plans, product development plans, and go-to-market plans. Without outcomes data to demonstrate economic and clinical value (ECV), the risk of a failure at product launch because there are no willing buyers for your product is very high. This can kill a company or a career.

Read more: Obamacare is Changing Market Access | MDDI Medical Device and Diagnostic Industry News

How a cotton candy machine gave this NSF-funded, Indiana-based wound-healing startup its first big idea | MedCity News

If you’re interested in startups, here is a story about how one current medical device startup formed. There’s probably not a typical path for startups to follow but many do form to address one issue and ultimately become something very different.

The trendy term for this in Silicon Valley these days is “pivoting.” That’s when you fail at one thing and then figure out something else to do using your existing assets. It also goes by the phrase, “fail fast, fail cheap, and fail often.” Of course, if all you do is fail, you will never get anywhere! The methodology requires that you learn from each mistake and apply what was learned to the next project. You do need to show traction and progress before your investors and stakeholders run out of patience.

The startup in the article, Medtric, envisioned a fibrous wound dressing spun on site in a process similar to how cotton candy is formed. They failed, perhaps because they focused on a process instead of the problem. They learned from their mistake, however, and developed a nanotechnology-based dressing in their second attempt. That product along with a third seem to have tangible clinical benefits. It also helps that the products are simple and relatively inexpensive. Those attributes help attract investors. The company has received extensive grant funding and angel funding and is planning to commercialize its products in the next year.

Takeaways: Ideas for new products can come from anywhere, even cotton candy machines. What’s more important is to have a deep understanding of the problem you want to solve and the benefits your solution provides. Simplicity in explanation of your concept, plan, product, and technology makes it easier for investors and stakeholders to understand and buy into your story. Pivoting is an expected part of the innovation and commercialization process. It is always good to have a backup plan just in case your primary strategy fails.

Read more: How a cotton candy machine gave this NSF-funded, Indiana-based wound-healing startup its first big idea | MedCity News.

This startup wants to help you save on medical bills by taking control of your health | GeekWire

Health 2.0“, also known as digital health – focusing on improving people’s health through a constantly evolving mix of web or mobile device apps and educational software and websites, social media, personal health records, and various forms of connected sensors – is growing and attracting much attention, from entrepreneurs, investors, the media, and public health officials.

The basic idea is that people can take charge of and improve their own health – and reduce their healthcare expenses – if they have data about what’s going on with their bodies and some basic information about what to do about it. Sometimes the data is shared with a healthcare provider.

The organization Health 2.0 estimates that there are 2540 companies in the Health 2.0 segment as of June 2013. A majority of the companies, 1465, are consumer-focused while the next largest category, professional facing, has 643 participants. There are 203 companies involved with patient-provider communications and 229 companies working on data and analytics. I’m sure the overall count increases every day.

Why is Health 2.0 such a hot segment in healthcare? For one thing, the barriers to entry are lower than in other segments like medical devices or biotech. Many of the apps are unregulated or require a 510(k) marketing clearance at most. The cost to develop and deploy an app is a fraction of what it costs to commercialize a Class II medical device.

How do these companies plan to make money? That, as the (updated) saying goes, is the $64 million question. Many of the apps and web services are free. Some use the familiar freemium model where a basic version is provided free of charge and the fully-featured version is sold for a few dollars or so. What’s lacking is a recurring revenue model, or is it?

Just as Google and other companies with large user bases do, many Health 2.0 companies aggregate and sell the data generated by their apps. It’s appropriately anonymized but it’s probably worth much more in terms of lifetime revenue per user (LRPU) than the nominal charge paid by the consumer. Plenty of researchers and marketers in Big Pharma and insurance companies as well as government would love to have large data sets with behavioral data from a target population from one of their drugs, pipeline or on the market.

The company referenced in the article, Health123, was started by ex-Microsoft and Seattle tech veterans. They plan to approach employers with the prospect of reducing their health insurance expenses by improving employee health through deployment and use of their app. It’s another revenue model. It also raises serious privacy concerns as seen in a lively discussion in the article comments.

It’s tempting to think that your company could be the one to demonstrate positive outcomes. It seems to me that there is much anticipation regarding effective health apps that can improve public health and/or “bend the cost curve” as the healthcare policy wonks like to say. Looks like there are a couple of thousand startups that are in agreement.

Takeaways: Health 2.0 presents many opportunities for medical device and healthcare IT entrepreneurs. Even hardware companies can get in on the action via development and integration of all sorts of physiologic sensors. This could turn into a “land grab” where small and nimble startups do all of the innovation and are then snapped up for outlandish valuations by big medical device and healthcare IT companies who can’t afford to miss the market opportunity.

Read more: This startup wants to help you save on medical bills by taking control of your health – GeekWire.

How Doctors Think About New Technologies | The Health Care Blog

Valuable insights into the mind of a physician – written by Leslie Kernisan, MD, a physician! Let’s face it, most of the time when we’re talking with doctors, we’re trying to get feedback about our product or idea or we’re trying to sell our product or idea. That doesn’t leave a lot of time to ask about how doctors think about new technologies or what their decision-making processes/criteria are for new technologies.

Here are a couple of observations from the blog post:

  • Vague, disorganized, or poorly designed websites drive visitors away, especially busy physicians.
  • Doctors prefer to consume information offline as mentioned in this blog post.
  • Don’t expect a busy clinician to call or email for more information. The information you provide must be sufficient the first time around.

And here are her questions about the new technology:

  • Does it solve a clinical problem she is experiencing?
  • What evidence exists that the technology will solve a problem, improve outcomes, or improve patient health?
  • How does it compare to the gold standard in terms of method, outcomes, complications, etc.?
  • How exactly does it work – be general and specific here. The physician may want to know how your technology works but they must know how it works in the context of the other devices and systems they use daily.
  • How easy is it to use? What’s the learning curve? Can you show a video of the device in use? Can you provide sample screens of a software application including drop-down menus?
  • How easy would it be to try the technology? Does it require significant financial investment, integration, or time investment, i.e., training, learning curve cases. Who bears the risk if the trial is unsuccessful?
  • Is it cost-effective? Show some financial examples and compare with popular alternatives.
  • What are the benefits to the patient and to the physician? Don’t just focus on features.
  • Who is the “ideal” patient for your technology? What about fit for the patients at the extremes of complexity, both simple and hopelessly complicated? Will it work for them?

And here are some suggestions from the doctor about how to optimize your company/product website to make it easier to use and navigate and also to get the information to the user:

  • Create a page or section for clinicians. Don’t exclude the general public but use proper medical, scientific, and technical terminology and keep the marketing-speak to a minimum.
  • Consider having more than one “how it works” section. Some people like a general explanation while others prefer detail. Also, provide the information in multiple formats. Some prefer print, others pictures and diagrams, and others like to watch video.
  • Offer downloadable brochures in PDF format, again in different levels of complexity.
  • Provide evidence of efficacy. This is especially important for physicians considering the trial of a new technology. If it’s insufficient, they will let you know. If it’s inaccessible, however, you may never know why they refused your offer.
  • Be sure to compare your product against the gold standard or traditional clinical practice along whatever dimensions are important to users. Either think like the user or ask them what data they would like to see in order to make a decision.
  • Offer a free trial or some equivalent risk mitigation. Do not expect the doctor to bear all of the risk in evaluating your product. They won’t.
  • Identify your benefits and advantages vs. the competition. Don’t exaggerate – your product does not need to be better in every category to be considered for a trial.

Takeaways: If you are a startup CEO or medical device product manager, make sure the information you are providing is tailored to your target customer. Keep in mind that evaluation is part of the sales process. Your goal is to get to the next stage in the process, evaluation/trial. You do not need to win the sale at this point. Prematurely trying to close a sale often kills it. Finally, think in terms of the big picture when providing information for evaluation. Put yourself in the place of the doctor and/or patient and ask yourself what information you need to make a decision. Consider the other systems and processes that your device or technology must integrate with. And above all, be fair about allocating the risk when asking doctors for evaluations and trials.

Read more: How Doctors Think About New Technologies | The Health Care Blog.

Henry Ford, Innovation, and That “Faster Horse” Quote | Harvard Business Review

OK, so Henry Ford never actually said, “If I had asked people what they wanted, they would have said faster horses.” But he might have thought it, and he definitely managed that way.

http://s1.cdn.autoevolution.com/images/news/legacy-of-the-ford-model-t-100-years-after-thumb-1380_2.jpg

“Henry Ford’s genius lay not in inventing the assembly line, interchangeable parts, or the automobile (he didn’t invent any of them). Instead, his initial advantage came from his creation of a virtuous circle that underpinned his vision for the first durable mass-market automobile. He adapted the moving assembly line process for the manufacture of automobiles, which allowed him to manufacture, market and sell the Model T at a significantly lower price than his competition, enabling the creation of a new and rapidly growing market.

But in doing so, Henry Ford froze the design of the Model T. Freezing the design of the Model T catalyzed the speed of this virtuous circle, allowing him to better refine the moving assembly line process, which in turn allowed him to cut costs further, lower prices even further, and drive the growth of Ford Motor Company from 10,000 cars manufactured in 1908 to 472,350 cars in 1915 to 933,720 cars in 1920.”

Unfortunately for Ford, his company was out-disrupted by Alfred P. Sloan and General Motors, which introduced a dizzying array of innovations in the ensuing years, dooming Ford to decades of second place in the race for automotive market share.

I worked for a time in marketing at General Motors. We experienced the same frustration in focus groups. People are great at asking for incremental innovations and improvements, particularly if they are experiencing a problem and if they are asked, “what do you want?” But ask them what they want in personal transportation in ten years and you either get blank stares or Jetsons flying car suggestions.

It’s the same in medicine. Performing market research with actual healthcare professionals is necessary but not sufficient. They are immersed in the day-to-day drama of healing patients and dealing with monstrous bureaucracies. It doesn’t leave much time or energy for dreaming. You can find lots of small problems to solve by spending time with healthcare workers and asking lots of questions but you need a visionary founder or a visionary physician to imagine big innovations.

Medical device entrepreneurs have to walk a fine line. On one hand, they need to establish a solution for an unmet need and show that they can grow their market in a credible way. Unfortunately, that’s a bit too conservative an approach to satisfy most investors and stakeholders. On the other hand, they can “swing for the fences” and try to commercialize a disruptive idea. That strategy usually leads to feedback that they are taking too big a risk. Either way, funding is difficult and it may be tough to recruit employees and board members.

Sometimes it’s a matter of credibility. If this is your first startup or if you have a string of less-than-successful startups, maybe you can start by playing “small ball” – to use a baseball term. Get a few wins and show the world that you can plan and execute, then bring out your Big Idea. Of course, if you have a track record of success, you can probably successfully pitch investors and attract early employees without much difficulty.

For startup CEOs, it’s a good time to reflect on why you started the company. Was it to change the world or just to make a few bucks? Perhaps your strategy should reflect your passion.

Takeaways: Do perform market research, early and often as you work to establish your startup and idea. Don’t expect perfect market validation for your disruptive idea. Consider an incremental approach if you aren’t getting traction with customers, investors, or stakeholders. Establish relationships with the visionaries in your market segment.

Read more: Henry Ford, Innovation, and That “Faster Horse” Quote – Patrick Vlaskovits – Harvard Business Review.

You Can Now Find Out What Your Doctor Is Writing Down In That File | Fast Company

This is a follow-up in a way to yesterday’s post about interoperability in healthcare IT applications. It turns out that a team of researchers has developed and deployed software called Open Notes that allows patients to see their medical records and review their doctors’ visit notes. In a trial completed in 2012 of 14,000 patients at several leading medical centers, including Harborview in Seattle, study organizers reported that the results exceeded expectations:

Patients with OpenNotes reported better care, while doctors experienced little additional work. Of the patients with access to OpenNotes, almost all opened their records, more than 60% reported they took medications more regularly and 77% said they felt more in control of their care. By the end, every single doctor opted to continue with the program, along with 99% of the patients in the program.

This is the kind of innovation that costs almost nothing to implement and has the potential to have large positive effects on healthcare costs and patient health. Last month, the organization reported that the U.S. Veterans Administration (VA) joined as a full partner and is offering OpenNotes to its >1 million patients.

My knowledge of the VA is that they are heavily data and outcomes-oriented. I’m sure they will be doing analysis to determine the actual effect on costs and patient benefits. As they are a closed system and highly computerized, they have the ability to conduct relatively fast studies with high statistical significance.

The Open Notes projects is run by Tom Delbanco, MD and Jan Walker, RN, MBA. Both are on the faculty at Harvard Medical School and Beth Israel Deaconess Medical Center. They have been working on Open Notes since 2008 and have received funding from the Robert Wood Johnson Foundation, among others.

Now we need someone to take on the problem of corporate data silos in healthcare IT.

Takeaways: Even small ideas can have large effects. A side benefit is that small ideas are easier to explain. If you are having trouble finding angel or VC investors for your startup, consider “venture philanthropy.” There are many foundations that might consider a grant if it even tangentially helps achieve one of their goals. Not sure if you have a valid business model? This team charged ahead with grant funding and now has powerful evidence that they might have a solution to a very big healthcare problem.

Read more: You Can Now Find Out What Your Doctor Is Writing Down In That File | Co.Exist: World changing ideas and innovation.

Healthcare’s interoperability problem isn’t about technology | MedCity News

So the crux of this problem is that hospitals/institutions/clinicians think they “own” patient data. If we in America ever want to achieve the significant potential savings that could be realized through application of various forms of information technology to the healthcare system, the mindset will have to change. The patient owns his/her patient data.

Big Data, the catchphrase to indicate that every click on the Internet is captured, aggregated, and analyzed, is already in wide use by all sorts of consumer companies, large and small. It works – to reduce costs, to fine tune marketing messages, and to enable highly specific targeting of a company’s best prospects. It works because – except for “walled gardens” like Facebook – the data generated by Internet users is freely available for anyone to use.

There is no reason to think that Big Data won’t work equally well in healthcare. The problem is that healthcare data resides in an enormous number of well-insulated silos. Very few of the silos share anything, even sometimes within an institution.

Consider a patient with several doctors – a primary care physician, a cardiologist, and an endocrinologist. It’s very possible that the three doctors cannot access their patient’s records from their colleagues without special requests and permissions. Sure, they may get test results and written summaries of procedures but the minutiae where much actionable data is hidden is kept locked up in proprietary systems.

Consider a healthcare IT startup that needs (anonymized) patient data to validate its offering and to demonstrate its claimed benefits. It must cut deals with a number of providers to access the data. This takes time and costs money, two things not in abundance at most startups. And yet investors and customers demand proof of beneficial economic outcomes before investing or buying. A classic catch-22 situation.

Yet another example is a medical software startup (now defunct) where I once worked. They developed a terrific 3D image viewer that could run on low-end PCs, tablets, and laptops. At the time, 3D image viewing and manipulation was limited to high end workstations costing tens of thousands of dollars. The company had to negotiate deals with every hospital’s PACS administrator and vendor (there were many) and then write specific software to access the PACS servers. This was not a sustainable business model and the company went broke.

The CEO of HIMSS (Healthcare Information and Management Systems Society) acknowledges the problem. He doesn’t have a ready solution, however but he admits that part of the problem is the way our system reimburses providers for tests and procedures and not for health improvements. He does hint that Medicare will be changing its reimbursement structure over time and that private insurers are sure to follow.

Takeaways: The two buzzwords in this segment are interoperability and portability. It seems to me that an industry standard could be written enabling two-way access to any appropriately anonymized data. In addition, electronic medical records need standards so that users wanting to switch to a different vendor are not held hostage by high switching costs caused by the need to remap data fields, etc. In the modern day Gold Rush of companies looking to make fortunes in healthcare IT, perhaps there is another Levi’s looking to profit by selling shovels and overalls to the miners.

Read more: Healthcare’s interoperability problem isn’t about technology: A Q&A with HIMSS CEO | MedCity News.

Verizon gets its first FDA clearance for remote monitoring tool for chronic conditions | MedCity News

It’s big news when one of the world’s largest telecommunications companies obtains a 510(k) marketing clearance for a mobile health application. Verizon is developing a cloud-based Converged Health Management software application. The device collects data from in-home monitoring devices such as blood pressure monitors, pulse oximeters, etc. and is perhaps planned to feed into a patient’s electronic medical record. The application seems to be primarily intended for clinicians to access and monitor patient data but patients can view their own data as well.

Verizon partnered with a small Canadian company, IDEAL Life, which will provide the remote devices. Apparently, Verizon will provide the wireless network, application(s), and cloud storage.

Other telecom companies have pursued this mobile health market, which is projected to be worth close to $300 million by 2019. AT&T, Qualcomm, and Sprint have invested in the space. AT&T is partnered with Intuitive Health for their market entry.

All of these companies see the low-hanging fruit: managing chronic medical conditions can reduce costs and improve health while providing a hefty return on investment to any company that can establish a significant market presence. The strategic benefits to the telecommunications companies include locking customers to their networks and garnering high margin data traffic just as the consumer mobile telecom market is starting to commoditize.

Takeaways: Partnering with a gigantic multinational can be terrifying but if you can tolerate the risk, leveraging their massive assets can scale up your technology or solution quickly and with minimal investment on your part. Perhaps you can even avoid angel or venture investment. If you are a startup CEO or product manager developing mobile health technology, make sure you contact every obvious and non-obvious (Intel, Qualcomm) target partner. The telecom companies need medical device expertise and technology. They have the infrastructure and cash to build an end-to-end solution.

Read more: Verizon gets its first FDA clearance for remote monitoring tool for chronic conditions | MedCity News.

The Healthcare IT Applications of Google Glass | MedCity News

Once everyone gets over the hyped privacy invasion and “OMG, you look like Geordi La Forge from Star Trek!” reactions, I’m expecting Google Glass to be incredibly useful in vertical markets like healthcare and applications like accessing real-time patient data and information.

Image of Geordi La Forge from Wikipedia http://upload.wikimedia.org/wikipedia/en/thumb/0/04/GeordiLaForge.jpg/250px-GeordiLaForge.jpg

The author of this article, Dr. John D. Halamka, is Chief Information Officer of Beth Israel Deaconess Medical Center, Chairman of the New England Healthcare Exchange Network (NEHEN), Co-Chair of the HIT Standards Committee, a full Professor at Harvard Medical School, and a practicing Emergency Physician.

His ideas for Google Glass:

  1.  Nurses can use it to assure they are dispensing the right dose of the correct medication to patients. I’ve seen some clunky bar code products that are in active use. This would be a big improvement.
  2. Doctors can use it to document every patient encounter using real time audio and video. The patient could be sent a link to the recording to help reinforce the interaction!
  3. Emergency physicians could access a Patient Dashboard with real-time vital statistics, personal information from an EMR, and lab and imaging test results. The doctor need never look away from the patient. Dr. Halamka reports he is planning to pilot such an application at his hospital soon.
  4. Visual display of a decision support algorithm for nurses, physicians, and emergency workers. No need to rely on your faulty memory when you can ask Google what’s next.
  5. Display of alerts and reminders during the work day. OK, this is one we all do already with our smart phones but imagine a busy clinician who doesn’t have time or can’t break sterility to check his/her phone. All possible with Google Glass and voice commands.

Takeaways: There are plenty of problems remaining to be solved in healthcare. Many of them could be the nexus of a new startup. Often the clinicians just tolerate the problems because they don’t know what to do about them. Developing relationships with tech-savvy and tech-friendly clinicians has the potential to identify the problems and perhaps initiate a rewarding collaboration. Additionally, you can leverage the massive investment that Google (and soon, others) are making in this technology by developing vertical applications while they are still focused on consumer apps.

Read more:The Healthcare IT Applications of Google Glass | MedCity News.

Should President Bush Have Taken Drugs Instead of Undergoing Stent Surgery? | MDDI Medical Device and Diagnostic Industry News

What a timely topic – and a perfect example for a patient. No matter what you think of George W. Bush, it’s clear that he prides himself on being in great physical shape. I’m sure he was quite shocked when his cardiologist told him he had blockage in one of his coronary arteries.

What happened after that is a microcosm of what’s right and what’s wrong with our healthcare system.

Of course, ex-Presidents, along with ex-congressmen and women (> 5 years government service) get the best healthcare our government can offer. In fact, Congress recently exempted itself from the provisions of the Affordable Care Act. President Bush gets government medical care for life.

From thee Congressional Research Service:

Health Benefits
No statutes explicitly govern the payment of health benefits for former Presidents. Generally, however, former federal employees must be enrolled in the Federal Employees Health Benefits program for five years to qualify for health benefits (5 U.S.C. §8905(a)). GSA, historically, has interpreted similar service requirements for a former President to qualify as a federal annuitant (defined in 5 U.S.C. §8901(3)). Presidential terms are four years. Jimmy Carter served a single presidential term, and, therefore, does not qualify for federally funded health benefits. Although George H.W. Bush served only one term as President, he is entitled to federal health benefits because of his extensive federal
service in other positions, including Director of Central Intelligence and Ambassador to the United Nations. While former President George H.W. Bush is eligible for federal health benefits, he opts not to receive them.52 Since former President Clinton served two presidential terms and receives a monthly pension, GSA’s position is that he qualifies for federal health benefits. George W. Bush is eligible for and receives federal health benefits.

Now President Bush had no symptoms of angina and was definitely not in heart failure or having an acute heart attack – all indications for stenting. No, his cardiologist decided to stent prophylactically.

Dr. Steven Nissen, a well-respected and world-renowned cardiologist, had this to say:

“It’s one of the reasons we spend so much on health care and we don’t get a lot for it. In this circumstance, the stent doesn’t prolong life, it doesn’t prevent heart attacks and it’s hard to make a patient who has no symptoms feel better.”

So a member of the elite, perhaps even one of the 1%, has the best medical coverage available. He no doubt has access to the best physicians. He goes to a hospital that is equipped with all of the latest technology. He gets some sort of high tech imaging of his coronary arteries even though he had no symptoms. Our innovative medical device industry has developed the stent, an amazing device that can save lives and relieve symptoms. Our pharmaceutical industry has developed equally amazing drugs that can also save lives and relieve symptoms. In President Bush’s case, his cardiologist decided to employ immediate treatment via stenting rather than long term medical therapy.

As far as I know there has been no definitive randomized clinical study establishing an advantage of (expensive) interventional treatments such as stenting vs. (relatively inexpensive) medical therapy.

So why did President Bush get a stent instead of medical therapy? Who knows – but it’s fairly representative of the way our healthcare system works. People with excellent medical insurance get the best medical care (bordering on unnecessary?) because the physicians and hospitals get adequately reimbursed. Some physicians like the instant gratification of interventional therapy and perhaps the extra income that goes along with it. The rest of us with high copays and deductibles probably end up with the drugs. If we are asymptomatic, we don’t even get the imaging study.

Repeat this scenario thousands of times per day and it starts to become clear why the U.S. spends more than twice as much in percentage of GDP on healthcare as any other developed country and why our national health is no better than average compared with all countries of the world.

Takeaways: PR (press relations) is a two-edged sword. The media love stories like this, however, it exposes the subject and perhaps the company placing the story to criticism, warranted or unwarranted. Savvy startup CEOs and medical device marketing managers should consider the upside and the downside of every story considered for pitching to the press.

Read more: Should President Bush Have Taken Drugs Instead of Undergoing Stent Surgery? | MDDI Medical Device and Diagnostic Industry News Products and Suppliers.

Wireless Power For Medical Devices | MDDI Medical Device and Diagnostic Industry News

A breakthrough in wireless power delivery invented by physicists at MIT and being commercialized by their startup, Witricity, has the potential to dramatically change the medical device and healthcare industries.

The new technology, called highly resonant wireless power transfer, is more powerful and more efficient than current methods of wireless power delivery such as inductive coupling, used in devices like electric toothbrushes. The new technology can operate over “tens of centimeters” compared to a millimeter or two for the old and fussy inductive technology.

What does this mean? Think of electrically powered devices like ventricular assist devices, pacemakers, defibrillators, cochlear, and ophthalmic implants powered externally without wires or battery powered with easy and convenient recharging through the air. No need for skin contact or transdermal leads with high risk of infection (not to mention irritating to the patient and just not nice to look at).

As the article points out, implantable devices could be designed to be hermetically sealed with smooth surfaces, eliminating the potential for leaks in both directions. Cochlear implants could be powered via a wireless charger built into an eyeglass frame. And the ultimate modality for augmented reality (as well as dynamic vision correction), smart contact lenses or intraocular lenses, could be powered in the same manner. Take that, Google Glass!

The article goes on to identify other beneficial uses of wireless power delivery in the healthcare environment. Power surgical tools could lose their electrical cord as could carts of medical equipment, reducing clutter, trip hazard, and infection risk.

I’m sure the same technology will ultimately make its way to consumer products. I’m envisioning an airport lounge where a gaggle of road warriors is clustered around a wireless charging station instead of fighting for a scarce electrical outlet. There are no doubt lots of other applications in vertical markets. The company is savvy to start with medical devices where margins are large, patient demand could drive adoption, and the benefits are quantifiable.

Witricity is already working with Thoratec, makers of an implantable ventricular assist device. While the technology itself may not be disruptive, adding it as a feature to existing product categories is a game changer. Wireless power delivery has the potential to energize (no pun intended) patients and physicians to demand the feature in their products.

Takeaways: Medical device product managers and design engineers as well as startup CEOs should be constantly on the lookout for feature-level innovations that can be added to their products. It’s even better if an exclusive can be negotiated for some period of time. Of course the risk to cost, schedule, and reliability must always be considered but in a crowded market segment where differentiation is tough to come by, a feature like wireless power delivery can provide real competitive advantage.

Read more: Wireless Power For Medical Devices | MDDI Medical Device and Diagnostic Industry News Products and Suppliers.

In Need of a New Hip, but Priced Out of the U.S. | NYTimes.com

There is much to be concerned about and even outraged over in this story but I can’t blame medical device companies for maximizing their profits in every way possible. That’s what businesses do.

First of all, Michael Shopenn, the subject of the story, was denied coverage for a hip replacement because it was caused by an old sports injury, making it the dreaded pre-existing condition. Aren’t all chronic conditions caused by something, even if we can’t identify the event or underlying pathology? Denying this sort of claim is good only for the insurance company’s bottom line.

The good news is that the Affordable Care Act aka Obamacare outlaws this abusive practice. Unfortunately, it comes 6 years too late to help Mr. Shopenn.

Second, the article reports that Mr. Shopenn used his contacts to finagle a hip implant “at cost”, $13,000, from Zimmer. There is no way that it costs Zimmer $13,000 to make an implant, even if you add on every conceivable indirect overhead expense. More likely, the implant costs a few hundred dollars, making a very tidy gross margin in the 90% range for Zimmer. The $13,000 “cost” is probably the list price to the hospital.

Of course, since Mr. Shopenn is now out of the cozy womb of managed care and contract pricing, he’s looking at the same huge markups that uninsured people encounter whenever they are injured or sick and are forced to make an emergency department visit. And yes, the law requires that no patient is turned away from the emergency department but they are required to sign contracts guaranteeing that they will pay back the hospital. Of course, the uninsured are not people with substantial assets. They are often living paycheck to paycheck and the ongoing debt payments drive them into bankruptcy.

The hospital reportedly quoted $65,000 for the hospital part of the surgery, excluding the cost of the implant and surgeons’ fees. Feeling any outrage yet?

Mr. Shopenn then decided to pursue the option of medical tourism, a phenomenon that has gained momentum in the past few years. Medical tourism has blossomed because of several factors. The Internet has made it possible for anyone to get lots of information about even obscure topics like medical tourism. Online communities enable people to compare notes and leave detailed reviews. Highly trained and competent healthcare professionals often train in the U.S., Europe and other technically and medically advanced countries. They then go home to their countries of origin and establish practices there. Many of those countries have government-regulated healthcare systems with rigid pricing, even for foreigners. Finally, many of the destination countries for medical tourism have a low cost of living, making the medical cost base low.

Much has been made in the media of medical tourism in places like India and Thailand. Mr. Shopeen decided the risk of his major procedure in a developing country was too great for him, so he chose to go to Belgium.

Belgium is not a country with a low cost of living but it does have an excellent medical facility infrastructure and many fine healthcare professionals, including orthopedic surgeons. I’ll quote the actual costs because they are so incredible:

“…he ultimately chose to have his hip replaced in 2007 at a private hospital outside Brussels for $13,660. That price included not only a hip joint, made by Warsaw-based Zimmer Holdings, but also all doctors’ fees, operating room charges, crutches, medicine, a hospital room for five days, a week in rehab and a round-trip ticket from America.”

I have no doubt that the same level of care in the U. S. would have cost him more than ten times as much at the “list prices” he was being quoted.

The New York Times article focuses on the pricing of the orthopedic implants, making the case that the handful of companies developing and selling the implants amounts to a cartel. That may be true, but it’s perfectly legal, just as any small group of manufacturers tends to drive up prices to maximize profits. Like gasoline refineries, for example. The problem is that no individual payer (except perhaps, Medicare) has enough unit volume purchases from a given manufacturer (= power to negotiate volume discounts) to affect prices. The implant companies are free to maximize profits in each market. They clearly do not make as much in Belgium on an implant as they do in the U. S. But they must be profitable there or they wouldn’t stay in the Belgian market.

The markups that U.S. hospitals charge are just as big an issue as the device pricing, perhaps even bigger. The system flourishes because insurance companies pay – and maintain their profitability by routinely imparting double digit price increases. Sure they negotiate down from the absurdly inflated “rack rates” but the prices are still much higher than in countries with single payer reimbursement systems and stricter government regulation. But we have better outcomes as a result of all of this money, right? Sadly, no. The U.S. is just average when it comes to medical outcomes, population health, longevity, infant mortality, and most other health metrics.

At 17.6% of our gross domestic product and still growing, healthcare expenses are out of control. There is no simple solution nor is there a single party to blame. We need only to look overseas to see that there are different and better ways of managing a healthcare system. Could Obamacare be the first step toward “bending the cost curve” in the U.S.? Check back in five or ten years. One thing is for sure. There are trillions of dollars at stake and there are very powerful factions that want to maintain the status quo.

Takeaways: A market like orthopedic implants is ripe for disruptive innovation. A brash startup, perhaps comprised of ex-employees of the cartel, could introduce a bare-bones (no pun intended) implant, price it well under the cartel’s prices, and still do very well financially. Sure there is a minefield of patents to maneuver through but it seems to me that this is exactly what entrepreneurs do.

Any takers?

Read more: In Need of a New Hip, but Priced Out of the U.S. – NYTimes.com.

The 4 types of buyers for your medical device (and you need a “yes” from all of them) | Medical Device Commercialization 101

Marketing and selling medical devices is complicated. They are highly regulated, competition is intense, and the stakes are high. There are a number of stakeholders and constituents who must say yes – or at least not say no – before you can sell your device.

If you are a startup CEO, medical device sales representative, product manager, or marketing manager, use this general list and description as a place to start to develop a plan. As you get more granular, i.e., at the hospital level, the buyer types and the purchasing process will become very specific. You need a plan to address the needs and overcome the objections of every one of the buyer types and often, more than one buyer in a given category. What I’ve learned in marketing medical devices is that only a few people can say yes to a medical device purchase but many can say no.

I’ve identified four categories of buyers. There are often multiple buyers within each category.

  1. User buyer
  2. Economic buyer
  3. Technical buyer
  4. Paying buyer

Let’s examine each category in more detail:

The user buyer is typically the physician or surgeon. A user buyer can also be a physician’s assistant, nurse, surgical technician or other healthcare professional – literally, anyone who might touch the product. The caveat here is to make sure you address all of the user buyers and satisfy their needs or at least neutralize their objections. I have seen large sales get derailed because a circulating nurse in the O.R. did not like a product’s packaging and was influential enough to use her veto power.

Physician user buyers may have less power than you think to influence a purchase. While they usually have some clout to request specific items for their likes/dislikes, economics and standardization are often invoked to deny requests from less influential doctors. And doctors, just like the rest of us, like to keep some influence in reserve for a time when they might really need it. Just another way of separating “must have” from “nice to have.”

The real challenge is in trying to convert an entire department or practice to a new product. Not only do you have to “sell” all of the user buyers but you have to convince a key decision-maker like a department head to use his/her authority to finalize the decision. This is an area where your marketing staff needs to craft highly specific comparison materials detailing the beneficial features, benefits, and advantages of your product/service. Your sales representative will need to use his/her relationships with all of these people and invest considerable time within the facility to keep the sale/conversion going.

You also need to carefully consider all user requirements before finalizing your product’s features and functions. The old cliche is that you sell the benefits, not the features, but this is an exception. If you omit or include the wrong feature, someone you will never meet may kill your product’s deployment at one or more sites. Market research is extremely important at this phase – well before product design commences.

The key is to identify a need among the user buyers, then establish a value for your product by emphasizing and quantifying your product’s unique benefits, and thus justify a premium price. Easier said than done.

The economic buyer can be a purchasing agent or executive, a department head with budgetary authority such as the O.R. Director (often a nurse) or head of the Emergency Department or ICU, an accountant or even the hospital’s CFO or CEO.

For capital items and capital leases and for purchases that affect a number of people, e.g., physicians, nurses, techs, a purchasing committee (may have a number of different names) often makes purchase decisions. It will be important to know who is on the committee and how to access the committee in order to supply information. At a tactical level, the sales representative or account manager for a given hospital or other site must map out the economic buyers. This requires real diplomacy and smooth interactions, as often the information is not given freely.

The trick with economic buyers is to spend as little time and effort with them as possible. The investment should be in creating demand from the user buyers and in giving the user buyers a business case to justify the purchase. You must avoid inadvertently having your product categorized as a commodity. In that case, your product will be viewed as interchangeable with other products and the (premature) negotiations over pricing will begin.

The technical buyer can be someone in the Biomedical Engineering Department if the facility is large enough to have that resource or it could be another technical person in a completely different area who performs biomedical engineering functions in his/her spare time. In rare cases, the technical buyer could be a healthcare professional such as a physician.

In any event, get your compliance engineer in touch with this person ASAP to determine if there are unusual or extraordinary requirements. Also make sure the biomedical engineer understands all of the features and functions of your device, including IEC 60601, UL, etc. If you have a software product or a physical product with software functions, you may need to get the blessing of the CIO, CTO, or other technology executive or one of their reports. Obviously, HIPAA compliance is a hot topic with everyone so it will be helpful to demonstrate compliance in advance.

The paying buyer is usually an insurance company or Medicare. For procedures that aren’t reimbursed such as elective plastic surgery, the paying buyer can be the patient or it can be the physician for minor products that are consumed or implanted as part of a procedure.

Making sure your device has the proper reimbursement codes is beyond the scope of this article but I strongly recommend engaging a reimbursement consultant and following their recommendations before completing your plan and long before planning your market launch. That step is critical for maximizing your revenue and proving to investors that you have a sound business model and know how you are going to make money.

Whether conducting primary market research to plan a launch and understand the purchasing process for your device or moving through the sales process at a target healthcare facility, always ask two questions to whomever you are selling: First, can you make the decision to purchase this product/service on your own? If the answer is no, ask who does have that authority and then target that person. If the answer is yes, then ask if the person has a budget with which to purchase the product/service. If the answer is no, they are no longer a serious prospect.

Takeaways: Use market research, competitive analysis, and field representative input to develop a plan to address all four of the medical device buyer types: user buyers, economic buyers, technical buyers, and payer buyers. Keep in mind that anyone could have veto power over your sale. Avoid commoditization of your product by emphasizing benefits over features and by relating benefits to value.

Hello Doctor App Helps Patients Navigate Complex Medical Conditions | Forbes

The Hello Doctor app is very specifically targeted at patients with complex medical conditions (diabetes, cancer, heart disease, etc.) who must collect and manage their own medical records because they see multiple doctors. More often than not, the doctors either have their own EMR systems or are affiliated with different healthcare systems with EMR systems that don’t share easily.

I like that the company has narrowly defined its target market. That is where Google Health failed and Microsoft Health Vault has stumbled for several years – general purpose consumer-oriented personal records are too general.

The company has started with an iPad app but are promising Android and “other” versions soon. This is smart because of Apple’s emphasis on simplicity and limited options in user interfaces – helpful for the typically older patients with these types of conditions.

One great feature is that the app allows the patient to capture paper records with the iPad camera. The app then asks the patient for information so it can be properly categorized. This has the potential for major improvement by use of optical character recognition so that the hard copy data can be extracted and recorded.

One potential issue is that the app stores all of the patient data locally, on the iPad. If the device is lost, stolen, or broken, it appears that the patient’s medical records are gone as well. I realize that there are HIPAA compliance issues, but an automatic cloud-based backup would provide security and peace of mind.

The company claims not to be subject to HIPAA regulations although they say that they may be subject in the future as they add features. They don’t appear to fall under FDA regulations either. The app is at its basic level, a database for holding personal medical records.

It’s not clear to me how the company plans to make money. The app is free but it’s still in beta. Not sure if they plan to charge once it’s commercially released or if they plan to sell in-app ads. I hope they’re not going to try to charge physicians to access their system – that model has been tried and failed! They also imply that they plan to aggregate anonymous patient data in order to supply information about clinical trials and also to give users “tools to cope with their condition.” Pharmaceutical ads, perhaps?

Takeaways: As the old saying goes, “find a niche and fill it.” The problem Hello Doctor is addressing is an inconvenience more than a major issue in the vast world of healthcare. Keep in mind, however, that once patients have invested time and effort in collecting their medical records, they are unlikely to go away and are very likely to recommend the service to their friends and relatives. Stickiness is a good quality. Also, getting a beta product out into the market quickly and inexpensively allows you to conduct “live” market research and to tweak the product as necessary. You will also have great adoption data to impress prospective investors.

Read more: http://www.forbes.com/sites/johnnosta/2013/06/09/hello-doctor-helps-patients-navigate-complex-medical-conditions/

Healthcare Social Media Efforts of Medtech Firms Deserve an “F” [? No!] | MDDI Medical Device and Diagnostic Industry News

I disagree with the basic premise of this article. The medical device marketers I know and have managed are extremely media-savvy. They “get” social media and use it personally. What they don’t see or get is any return on investment in social media for their hard-won device marketing budgets.

And these days, if you can’t measure it, it isn’t worth doing.

Yes, there are a few examples like Biomet Orthopedics where a direct-to-consumer (DTC) advertising model was innovative and made some sense. Unfortunately, even Mary Lou Retton’s endorsement could not prevent the recalls, class-action lawsuits, and negative publicity that followed deployment of a flawed product. In most cases, however, the typical patient/consumer doesn’t know and doesn’t care much about the brand of device being employed or implanted, etc. Further, in my experience, the physician or surgeon would not be amused or grateful to get this sort of “assistance”. The docs have their preferences and are reluctant to change, to put it mildly.

Yes, the pharmaceutical industry has had a disruptive effect over the past twenty years with direct-to-consumer marketing. Drugs are very different from medical devices, however. Patients can learn about their medical condition online and compare drugs for effects and side effects and then make a “request” to their doctor. The doctor can then grant the request, deny it (perhaps driving the patient to a different physician), or agree to a trial of the new medication.

Because drugs work (or don’t) over a period of time, there is an opportunity to evaluate one or more brands. The acute nature of device use/therapy means that there is typically only one chance for evaluation, raising the stakes and minimizing the incremental benefits of one brand over another.

I think it’s absurd that a typical patient can self-educate using online resources and become more knowledgeable than his/her physician or surgeon about a highly specialized piece of medical equipment and the procedure in which the device is used. And just because a pacemaker gets 1,000 likes on Facebook or 10,000 retweets doesn’t mean it’s right for you.

Is there a place for DTC in medical devices? Certainly, if it is used for education, as in informing patients about new procedures, directing them to patient-oriented consumer web resources, referring them to physicians experienced with the new procedure, and only indirectly reinforcing the device brand.

Takeaway: Medical device marketers have limited budgets, especially compared to drug marketers. They need to focus with laser-like precision on creating awareness and leads among their target market, healthcare professionals.

Read more: Healthcare Social Media Efforts of Medtech Firms Deserve an “F” | MDDI Medical Device and Diagnostic Industry News Products and Suppliers.

Marketing a product to physicians? Think education and email | MedCity News

This survey is validation of what most of us realize intuitively. Many (most?) physicians don’t want (or can’t afford) to spend precious time during the day in a one-on-one interaction with a sales rep or telemarketer. While they say they want to be kept informed about new products and market developments, they prefer to receive that information offline, via email or actual mail.

Of course, receiving the information, reading it, and acting upon it are very different things. As a medical device marketer, how do you break through all of the clutter? As a medical device sales rep, how do you keep your interactions welcome (= infrequent) and still get what you need (= orders)?

For marketers, this is a perfect opportunity for testing. You should be trying different approaches in small tests and then scaling up the one or two approaches that work the best.

For sales people, it’s all about positioning yourself as a problem-solver and a person with recognizable expertise in your market category. Those sorts of relationships and reputations take time to build, so think twice about going for the quick and easy sale if it might cause a negative reaction.

Interestingly, the type of information physicians wanted least was panel and study recruitment and invitations to events and webcasts while the information they wanted the most was sponsored CME credits and also disease information and patient education materials.

The digital information revolution hasn’t reached the doctor-patient relationship quite yet. Marketers must keep this in mind as they develop and deploy more online resources.

“[The] content must be flexible though, as most said they communicate with patients mostly in traditional ways rather than through email. A white paper put together by PharmaLeaders using the data suggests that the best marketing materials will be sent to a physician in a way that’s easy to translate to the patient in person or over the phone.”

Read more: Marketing a product to physicians? Think education and email | MedCity News.

How Do You Design a Medical Gadget That Costs 95 Percent Less Than Before? | Wired Design | Wired.com

It’s relatively easy. Just put off compliance with regulatory requirements, adherence to a quality system, leave out nice-to-have product features, and omit the infrastructure for customer support, sales, training, etc.

I admire what this inventor is doing. He’s trying to meet an important need for an endoscope in developing countries. I don’t believe, however, that it can be considered the same product as commercially available endoscopes sold in the USA, EU, and other developed countries. In that respect, the Wired headline is misleading.

This innovation has the potential to have a large beneficial effect on public health in developing nations. It will be interesting to see if this design shift becomes “disruptive” technology and challenges the market in developed countries.

“Traditional endoscopes cost anywhere from $30,000-70,000, but by making different design choices and cutting out extraneous “nice-to-have” features, the price can be reduced dramatically. The EvoTech team found that off-the-shelf camera modules, only slightly better than the ones used in smartphones, could provide pictures crisp enough to meet clinical standards for just a couple hundred dollars. “The EvoCam is basically a webcam you put in your body.” says Zilversmit. Most endoscopes come with dedicated computers and complex image processing hardware. The EvoCam replaces all those expensive extras with software running on a standard laptop, using solar power if necessary, and soon hopes to have a version for tablet. Instead of sending a team of technicians to train doctors, EvoTech distributes training documents and video over the web.”

Read more: How Do You Design a Medical Gadget That Costs 95 Percent Less Than Before? | Wired Design | Wired.com.

How are hospitals responding to startup queries to use de-identified patient data? Cautiously | MedCity News

Access to large amounts of de-identified patient data has to be like oxygen to healthcare IT startups. They need the data to show that their software and algorithms function correctly and (a recurring theme) that they can credibly save money for their customers. This is critically important in attracting investors and scaling up to more customers.

Unfortunately for startups, the CEOs, CFOs, and CIOs of large hospitals and healthcare systems know exactly how valuable this patient data is. While they may have granted easy access to it once upon a time, those days are largely in the past. You will have to earn their trust and pay in some form to get access today and in the future.

If I were the CEO of one of these companies, I would do everything possible to get access to this data. Here are a few things that one should try in order to get to the precious data:

Partner with the hospital/healthcare system that owns the data. Easier said than done for a startup. Yes, you will need to make some sort of gain-sharing agreement. You will also need to indemnify the partner against legal and financial penalties resulting from your improper use of the data, e.g., HIPAA violations and any willful or inadvertent patent infringement. Essentially, you will need to guarantee the hospital that your startup will assume all of the downside (risk) and cut them in on the upside.

Partner with one of the hospital’s primary IT providers. They have far more influence and access to key decision-makers in the hospital. There is a veritable alphabet soup of systems out there, from EMR to HIS to RIS to PACS and beyond. None work perfectly and who knows? You may find the perfect corporate partner along the way.

Partner with a prominent and/or influential physician on the staff and preferably on the management team of the hospital. This could take the form of a consulting agreement, part-time employment, or membership on your medical advisory board. All of those should include a generous helping of stock options if permitted by the physician’s primary employer.

Offer to conduct an onsite beta trial with the data and aggressively identify all patient and economic benefits. Also offer substantial discounts for sale, installation, and support of your software.

If you live in a state or congressional district with a Democratic representative or senator, contact their offices and ask to speak to the aide responsible for healthcare liaison.  They are motivated to help anyone who has the slightest promise of showing that Big Data can help patients and save money, all key components in the promise of the Affordable Care Act (aka “Obamacare”). Their help and influence will be mostly indirect, however, and the most you could hope for is a phone call from the elected official to an executive at the hospital.

Conduct a PR campaign highlighting your company’s efforts to save money and improve patients’ lives. This works best if there are competing hospitals or healthcare systems in your area so you can play one entity against the other.

If nothing else works, expand your geographic scope and consider other metropolitan areas.

Read more: How are hospitals responding to startup queries to use de-identified patient data? Cautiously | MedCity News.

Here’s where the angel money is flowing in the U.S. | GeekWire

OK, fellow Seattle-area entrepreneurs, this is what we’ve been suspecting all along: it’s getting  tougher to raise angel money here.

According to an article just published by the Angel Resource Institute, angel group investing dropped in the six-state Northwest region, from an 8.3 percent share of the national total in 2012 to 6.4 percent during Q1 2013. Interestingly, the Seattle-based Alliance of Angels was named as one of the top six angel groups in the country in terms of number of deals. Unfortunately, the AoA does not typically invest in medical device companies although they recently made one notable exception with an investment in Mobisante, the smartphone-based ultrasound startup.

The Northwest’s 6.4% share of the country’s total angel investment in Q1 2013 is the lowest of the nine regions assessed in the report. Conversely, the Southwest is red hot for angel investment, rising from 11.9% to 18.1%. It even beat out perennially top-ranked California.

More useful information:

The Halo Report finds that the median premoney valuation for early-stage deals by angel groups stayed consistent at $2.5 million during the first quarter. It also found that the median amount invested was $680,000 per deal, which sets a five-quarter high and is up from $550,000 one year ago.

The hottest sectors are Internet, healthcare, and mobile technology, comprising 72% of the total deals and pulling down 64% of all angel investment dollars. Healthcare is second behind Internet in terms of share of deals and share of dollars.

81% of investments are made in angels’ home states. So much for the conventional wisdom that says to go elsewhere if you can’t find investors locally.

Not sure how to reconcile the angel stats with this recent article: The top 3 cities for startups: Austin, Seattle and Boulder – GeekWire. Of course, the reasons that startups may be attracted to a city or region may not correlate with the somewhat obscure reasons for angels to invest. Hmmm…so what exactly are those 10,000 Microsoft millionaires doing with their money?

According to a report from GoodApril, a San Francisco-based tax-planning service, the best places to start a company are Austin, Seattle and Boulder. GoodApril based its findings on median tech-employee earnings, personal income tax, property tax, the cost of housing and the cost of office space.

Read more: Here’s where the angel money is flowing in the U.S. – GeekWire.

Life Science Innovation Northwest Conference 2013 – medical device startup perspective

I attended LSINW last Wednesday and Thursday July 10-11 as a poster presenter. I’m serving as acting CEO for a University of Washington startup we’ve named SimpleCirc. The simple, safe, swift, and inexpensive adult male circumcision device is intended to address the HIV/AIDS epidemic in Africa (you can download our poster here: SimpleCirc LSINW 2013 Poster)

The LSINW poster submission and conference admission process is a bit of a bargain. Not all posters are accepted, but the ones selected are placed prominently in the main hallway of the conference. Most of the conference attendees walk through the poster exhibits several times per day. There are many opportunities for interaction. The presenters are given coaching and two full-conference admissions for $175. That compares to $350-$1500 per person for full price admission. Needless to say, we took full advantage of every opportunity.

Overall, LSINW is very professionally produced and run by WBBA, the Washington Biotechnology and Biomedical Association. Printed materials are high quality, the presentation venues have up-to-date AV equipment and adequate staffing, the various presentations and panels run like clockwork, and the food/refreshments are more than adequate in quantity and quality. The conference schedule is made available in a brochure, a digital PDF file, and in a tablet/smartphone app called Guidebook (more about that later).

There was a cocktail/networking event at the end of the first day but the organizers also scheduled an event honoring local women in life sciences AND had a rock band made up of (amateur?) musicians in the Seattle life sciences scene. There was too much going on for me. The noise level was high and it was difficult to hear in that space.

A Life Science conference necessarily has a wide variety of attendees: small, medium, and large medical device company executives, biotech execs, a few pharma people, consultants, service providers, grant-making officials, physicians, researchers, and academics, angel investors, VCs, media, etc., etc. Not every person had an interest in what we’re doing but it is always fun and interesting to look for a connection.

LSINW created several tracks for the two-day agenda: Biopharmaceutical, Medical Technology, Emerging, Health Information Technology, and Innovation. There truly was something for everyone and I often found myself torn between two compelling but simultaneous presentations.

The Opening Keynote speaker, John Crowley, CEO of Amicus Therapeutics, was unable to attend due to a family emergency but the conference organizers came up with a last-minute substitute, Charles Baltic, Managing Director of Needham & Co. He was an OK speaker but I’m sure he repurposed an existing presentation – very heavy on info about financings and IPOs.

The first day lunch keynote speaker was Steven Burrill, CEO of Burrill & Co. He updated his talk about the state and future of healthcare in the USA from last year but it was entertaining and extremely interesting. I’m impressed with his presentation abilities. He blows through ~150 slides in under an hour and apart from looking at a monitor to see what slide was being displayed, never looked at a note the entire time.

The panel discussions were good. Most of the moderators were well-prepared with stimulating questions and the panels – usually (but not always) executives with Seattle connections. Most of the discussions were non-controversial with panel members sticking to relatively “safe” positions. That is, until the last panel, “Blood from a Stone – Who is Left in Life Science Investing Today?” moderated by Luke Timmerman of Xconomy who did a fine job by staying out of the spotlight.

Sparks flew as three panelists more or less representing the Venture Capitalist side of funding sources sparred with Gregory Simon of Poliwogg, a relatively new crowdsourcing site for angel investors. For sheer entertainment value, this was the best panel of the conference. The perspective of the VCs seemed to be that “we are smarter than everyone else” and the “average investor” needs to be protected from the risk of losing their entire investment. Excuse me, but I don’t believe any VC fund offers money-back guarantees.

Gregory Simon was entertaining, if a bit of an iconoclast. He did make a number of good points and also noted that very recent changes by the SEC have enabled crowdsourcing of angel investments – details are still forthcoming but it is very exciting from my perspective. There are few opportunities in Seattle for early stage device companies to get seed or Series A funding. Once those have been exhausted, it’s off to California and overcoming the challenges of being unknown and from out of town in order to raise capital.

An added bonus was the participation of James McIntire, Washington State Treasurer, giving the perspective of a pension fund trustee, and Tracey Mumford from the Michael J. Fox Foundation representing the “venture philanthropy” segment. As an attendee remarked during the audience Q&A, democratization in venture investing is coming whether or not you want it or are prepared for it. He also served up the example of the meltdown in the investment banking industry over credit default swaps and mortgage derivatives to show that “the smartest guys in the room” are not infallible.

I’ve attended a number of LSINW conferences, starting in the days when they were held at the Bell Harbor Conference Center on Elliot Bay in Seattle. The Washington State Convention Center is the perfect place for this meeting, in my opinion – centrally located downtown, spacious, clean and accessible. No, there are not great views but that may be the only drawback.

I mentioned the Guidebook app earlier. It’s a nice compendium of the various events – and it auto-updates whenever there is a revision (like the keynote speaker change). You can even make a schedule for the entire event. BUT, you can’t upload the schedule to your Google Calendar or Outlook calendar. And you couldn’t sync the schedule in your phone to your tablet or vice-versa. Also, there was another event called Biopartnering where interested parties could arrange brief get-to-know-you meetings. Unfortunately, that function could not be integrated with the Guidebook schedule, meaning I had to juggle three different schedules over two different devices. Not for the technology-challenged!

As for my perspective as a startup CEO, I’m often left wanting…more from these events. Many of the panel discussions focus on biotech or later stage financing like VC or IPO. I would like to see a panel of startup medical device CEOs who recently completed an angel round to share their experiences, do’s and don’ts. I would also like to see a stronger presence from Angel groups like WINGS.

On the other hand, Seattle is a small town when it comes to life sciences. You can get to just about anyone with one or two requests for referral or introduction. The LSINW conference is a great way to do that in person every year. If you are a startup CEO or are thinking about a startup, I strongly recommend that you attend next year, June 19-20, 2014.

Is This 3-D Printed Cast the Future of Healing Broken Bones? | Wired Design | Wired.com

Innovation comes to the humdrum cast. What a great concept! I’ve worn plenty of plaster and fiberglass casts. The only good part is when they are removed. This story shows that ideation can be applied just about anywhere, a valuable lesson for the budding entrepreneur in many of us.

The concept, created in a school project,  is to use 3D scanning and printing to create a custom cast that is as strong as, if not stronger than ordinary casts and is open (so you can scratch it!), lightweight, and waterproof (no more garbage bags and tape – hooray!).

I suppose it could be printed in different colors and patterns as well.

I believe this is one invention where patient demand will overcome the usual resistance to new technology.

And young Jake Evill has to continue his studies to get a PhD or MD – we need a real-life Dr. Evill!

Cortex Cast
The Cortex Cast is a 3D-printed alternative to traditional plaster and fiberglass casts. Image: Jake Evill

“The young designer began by researching the structure of the bone. He found that the trabecular, the tiny lattice-shaped structures that form the inner tissue of a bone, to be the perfect inspiration. “It was this honeycomb structure that inspired the Cortex pattern because, as usual, nature has the best answers,” he said. “This natural shape embodied the qualities of being strong whilst light just like the bone it is protecting within.””

Read more: Is This 3-D Printed Cast the Future of Healing Broken Bones? | Wired Design | Wired.com.

A Truly Astonishing Graph of the Growth of Health Care Jobs in America | The Atlantic

In the last ten years, jobs created in the healthcare sector have exceeded those created in the rest of the economy by a factor of ten, equaling 2.6 million new jobs.

From The Atlantic, http://www.theatlantic.com/business/archive/2013/07/a-truly-astonishing-graph-of-the-growth-of-health-care-jobs-in-america/277454/

 

 

 

 

 

 

 

Healthcare spending as everyone knows is eating up an ever-increasing proportion of the economy. Healthcare spending in the U.S. is currently at 17.6% of GDP compared to an average of 9.5% for the rest of the 34 OECD nations, what many people refer to as “first world” countries.

The amazing job growth is sort of a good news/bad news scenario. Clearly, we would still be in the depths of the recession without those jobs. Part of the job growth is caused by out of control spending and price increases (largely not by medical devices, which are a paltry 6% of the sector) – the bad news. Part is lots of hiring to go along with all of the spending, which I guess is the good news.

As the article points out, the jobs that are projected to grow the fastest in the next ten years are personal care aides and home health aides, courtesy of aging baby boomers and their parents.

And yes, these jobs are as recession-proof as you can imagine. They cannot be outsourced and there seems to be a virtually limitless demand from the market.

My question is, how far to the right and up can the blue line extend?

Read more: www.theatlantic.com/business/archive/2013/07/a-truly-astonishing-graph-of-the-growth-of-health-care-jobs-in-america/277454/

Scanadu Builds a $149 Personal Tricorder for Non-Trekkies | Wired Design | Wired.com

It must be incredible fun to be a biomedical engineer these days. I would be like a kid in a candy store with all of the incredible tools and components that one can use to make just about anything.

“Scanadu is making fast progress in building one of the most mythical pieces of tech known to geekery. As an entrant in the Qualcomm Tricorder XPRIZE, the health-tracking device is designed to read your temperature, blood pressure, respiration, and other vital signs, just by holding it to your temple. Last week, the Scanadu Scout finally launched on Indiegogo, and already has raised nearly $700,000–seven times its stated goal, with two weeks left to go. [update – now at $1.3 million! TES]

The XPRIZE originally used the omni-informative tool as inspiration for a $10 million prize founded to make health analysis available to consumers at home. “Somebody will have to build the Tricorder one day,” says Walter De Brouwer, Scanadu’s co-founder.”

“We are in the biggest tsunami of personalization in the world but for medicine we are still waiting in line in an emergency room.” De Brouwer

Scanadu seems to have adopted the iRobot strategy that produced the Roomba and a number of line extensions including products for military and aerospace use: Use science fiction for ideas and adapt current technology to make something useful. Not a bad plan.

Read more: Scanadu Builds a $149 Personal Tricorder for Non-Trekkies | Wired Design |Wired.com.

They must be well-financed. The video embedded in the Wired article is very slick, even a bit too promotional (in my opinion).

As for the Star Trek connection, it probably won’t be long until another company markets a phaser for home use. Maybe that Taser company that’s always getting sued?

How Restyling the Mundane Medical Record Could Improve Health Care | Wired Design | Wired.com

This is an interesting study in design and healthcare IT but lacks a clear roadmap for successful implementation – something that businesses require but design competitions can ignore.

“The results of a contest sponsored by the White House shows how powerful a dose of design can be in treating what ails our medical system.

Electronic medical records (EMR) are extremely useful tools and can help improve patient care and reduce costs — if designed and used properly. Unfortunately, good design is hard to come by in this market. Health IT data standards, privacy laws, and impenetrable health systems complicate an already challenging design process and usually lead to lackluster products.”

As the article refers to it, the “mundane” electronic medical record is becoming increasingly important as more test results, physician notes, imaging results, and patient records exist only in digital format. And everyone probably remembers the financial incentives that the Affordable Care Act dangled in front of physicians to persuade them to adopt EMR technology.

One of the key questions is who is the customer for an EMR? That’s complicated…but that’s who gets the attention from the EMR vendors, because they pay the bill. Sometimes it’s the physician or practice who pays for the system, sometimes it’s a healthcare system like Providence or Group Health here in Seattle, and sometimes the patient can be the (non-paying) customer. After all, the data belongs to the patient, right? But from the perspective of the entity paying for the EMR, does patient satisfaction really matter? Just like many things in healthcare (and technology for that matter), the consumer is the product, not the customer.

Some of the biggest issues preventing widespread acceptance of EMRs and more enthusiastic innovation in the market segment, in my opinion, are interoperability among disparate systems, lack of standards, data portability, and switching costs for the EMR owner. EMR vendors have not historically made it easy and simple to transfer records among competing systems while there is a confusing absence of standard fields and features from vendor to vendor. Patients switching to a competing system because of relocation or changing insurance plans or new specialists or switching primary care providers often have a difficult time accessing old records in the new system. Finally, physicians who switch to new EMRs have reported having to pay high costs to import and remap their old EMR data into a new system, a cost that has been referred to as “ransom.”

The benefits to EMRs are many, as the article suggests: easier management of chronic diseases, improved communications, better patient compliance, fewer medical errors, reduced waste because of duplicate and uncessessary tests, and lower overall costs to the healthcare system. Benefits to the advanced EMR concepts discussed in this article are potentially even more valuable. Will we see them in the near future? As a consumer and occasional patient, I sincerely hope so. As an industry observer, “the doctor will be with you shortly.”

Read more: How Restyling the Mundane Medical Record Could Improve Health Care | Wired Design | Wired.com.

I’ll be discussing more about the different types of customers involved in medical device commercialization in the next post in my ongoing series, Commercialization 101.

Google Glass in healthcare

Google Glass has created lots of buzz recently, much of it negative. People seem to be reacting to the “Borg” look and a perceived invasion of privacy. I believe it’s Google’s way of inoculating our culture with what is a beta product, after all, and something they will continue to refine.

I worked for a company that developed and marketed a head-worn, head-up “augmented vision” display. We focused on mobile “knowledge workers,” including physicians and surgeons. There was much interest but the technology was not sufficiently refined (this was 10 years ago) and we could not meet user expectations.

I believe Google and others will perfect this aspect of wearable technology and that vertical markets like healthcare will be among the first to adopt. Wouldn’t you rather have your doctor looking at you than staring at a tablet during your visit, even if she is wearing a weird set of glasses? How about giving a surgeon and anesthesiologist the ability to monitor multiple readouts simultaneously, all without diverting their attention from the patient? There are many opportunities for new products, new applications, and new companies using this technology.

photo from http://www.forbes.com/sites/johnnosta/2013/06/21/google-glass-in-the-operating-room/
Rafael Grossmann, MD, FACS at Google Glass’s first surgical appearance (image from Forbes.com)

Lastly, there is a terrific video (in my opinion) from the Cleveland Clinic in the second link that gives a glimpse into what this technology may deliver someday. It’s quite moving and worth five minutes for anyone involved in any aspect of healthcare.

Read more: Inside The Operating Room With Google Glass – Forbes.

Read/see more: #ifIhadGlass: Google’s new gadget could turn Cleveland Clinic’s empathy video into reality | MedCity News.

 

The value of curmudgeons and why health systems and startups should engage them | MedCity News

We all tend to seek people who agree with our brilliant ideas. It’s human nature to avoid the naysayers and skeptics. There is a significant danger of group think if you apply this filter too energetically, however.

I’ve found that the best tactic for engaging physicians or nurses as advisory board members or informal advisors is to have a mix of ages and experience levels. Too often, the key opinion leaders are too busy to give practical advice – but they are needed for their names and tacit endorsements. And they will point out obvious blunders.

The younger physicians and residents are often extremely energetic and idealistic but can be naive about what it takes to bring about change in an often byzantine hospital or healthcare system. Sometimes they just don’t have enough practical experience to offer meaningful advice about adoption of a new technology, although they are extremely sharp about technology and the latest research.

It helps to engage one or two mid to late-career curmudgeons as the article suggests. These people have seen more than one battle and in many cases, more than one war, metaphorically speaking. If you can gain their trust, they will tell you the flaws in your go to market plan and what needs to change. Of course, it helps to develop a tougher hide before asking for feedback from “grizzled veterans” as you will quickly learn that your “brilliant ideas” are anything but!

“…anyone who wants to make changes from a hospital system to a scrappy startup would do well to bend the ear of a curmudgeon, be they a nurse, provider or health care professional affected by a proposed change or innovation they want to make. They may be surprised by the results.

Why? Because curmudgeons are more likely to express their opinion about whether a new system or initiative will or won’t work and why. If a new interface would interfere with workflows, for example, they will often be the first to speak up. They are frequently the toughest critics. You may not get showered with praise from them but if you engage them early on and make it clear their opinions are valued you may end up making your app, EHR, etc. much better than it might otherwise be.”

Read more: The value of curmudgeons and why health systems and startups should engage them | MedCity News.

2013 Washington State Biomedical Device Summit

I attended this meeting yesterday, June 17 at the Bothell Campus of the University of Washington. Bothell is a hub of the Biomedical Device Innovation Zone.

There was an interesting keynote talk by Mark Leahey, CEO of the Medical Device Manufacturing Association (MDMA). He reported that lobbying in Washington, D.C. to repeal the 2.3% medical device excise tax is intense. He also told the group that efforts to improve the FDA regulatory clearance process are proceeding and that the 510(k) pre-market notification process does not need to be replaced, merely refreshed.

One welcome development was an announcement by Matt Smith, Chair of the Biomedical Device Innovation Zone that a medical device company incubator is being established at Lake Washington Institute of Technology in Kirkland. The incubator will have rapid prototyping capability  – machine shop, 3D printer, etc. – as well as space for several onsite startups and a number of virtual startups. This is great news – there are a number of startup incubators in Seattle focusing on biotech and software but none until now that specifically welcome medical devices!

The most interesting part of the summit was a panel discussion chaired by Chris Rivera, CEO of the Washington Biomedical and Biotechnology Association (WBBA). The panelists were executives in local healthcare organizations. Three of the panelists are also physicians and a fourth is a pharmacist. The message for industry is that the future of the healthcare industry is going to be focused on cost reduction – “cost, cost, cost” according to one panelist.

I did not know that the medical device industry accounts for only 6% of all healthcare costs in the U.S. As one panelist put it, even if you gave away all devices at cost, it would not bend the healthcare system cost curve. The highest expenses are in labor. Devices that eliminate labor or that connect systems requiring manual intervention will be winners in the future. Entrepreneurs and established device companies launching new products must show immediate cost savings, as the CFOs and actuaries are jaded by past promises and will no longer accept assertions that cost reductions will occur over a long period. One reason is that the typical patient tenure in a health insurance plan is only two years. That makes it difficult for an insurer to realize savings on an investment in new technologies or procedures without up-front savings.

An audience member asked a question about the structural costs of practicing “defensive medicine” where clinicians order extra tests and procedures to guard against malpractice judgments. Interestingly, the three physicians on the panel all asserted that, while significant, defensive medicine is not the biggest problem in healthcare economics in the U. S. and further, that  it will be impossible to ever eliminate defensive medicine, primarily because of the trial attorneys lobby in “the other Washington.”

Another panelist stated that companies with new products and procedures must approach hospitals and offer ways to mitigate the risk the hospital is taking by adopting the new technology. This idea is getting attention around the industry. Not sure exactly how it would work and how that would affect financial statements and projections in startups and even established companies. Does the hospital expect some sort of make-good guarantee if the technology’s promises fail to materialize? On the flip-side, does it expect to participate in the company’s success if the technology is even more successful than anticipated? Another panelist suggested that clinical articles about new technologies always include a discussion of financial projections in addition to the usual clinical and technological discussions. “Cost, cost, cost” indeed…

Interventional radiologists wring hands over the medical device tax | MassDevice

I don’t agree that an across-the-board tax would be a major obstacle for medical device companies to acquire innovative and effective new interventional radiology technologies. Yes, the tax reduces gross margins but as the article implies, the Affordable Care Act (aka Obamacare) is bringing millions of uninsured people/prospective patients into the healthcare system. So gross dollars (aka the bottom line) should increase.

Besides, it’s still a level playing field as the tax applies to all companies participating in the U.S. healthcare market. Yes, a few marginal technologies “on the bubble” may not make it to market but the radiologists are free to start their own companies and prove the bean-counters wrong.

The issue of whether the medical device tax is good or bad policy is a separate matter and is not what I’m addressing here.

The use of the term “hand-wringing” in the headline seems to fit, in my opinion.

“The 2.3% medical device tax may prevent “entrepreneurial interventional radiologists” from bringing new technologies to market, according to a commentary published by the Journal of Vascular & Interventional Radiology.”

Read more: Interventional radiologists wring hands over the medical device tax | MassDevice.

Supreme Court Justices, 9-0, Bar Patenting Human Genes – NYTimes.com

DNA A rare, unanimous decision from our ideologically divided Supreme Court affirms that natural things cannot be patented – a principle that has been part of patent law for more than one hundred years.

The Court upheld the right to patent methods to isolate genes and also complementary DNA (cDNA, an artificial construct).

Both sides, of course, claimed victory. The company, Myriad Genetics, stated it was pleased with the decision and that its business model is unaffected. Consumer advocates and researchers expect the price of breast cancer genetic testing to drop substantially and also hailed the ability of researchers to conduct experiments without fear of patent infringement lawsuits.

Interestingly, patent law in the European Union allows for the patenting of human genes.

As an individual, I am happy to know that my genome remains mine. As a business person, I will watch with great interest – what will happen next in this emerging industry?

“WASHINGTON — Isolated human genes may not be patented, the Supreme Court ruled unanimously on Thursday. The case concerned patents held by Myriad Genetics, a Utah company, on genes that correlate with increased risk of hereditary breast and ovarian cancer.”

Read more: Justices, 9-0, Bar Patenting Human Genes – NYTimes.com.

A Smartphone Spectrometer Diagnoses Disease At A Fraction Of The Price | Co.Exist: World changing ideas and innovation

Another example of the astonishingly rapid convergence of mobile technology and medical applications.

“Here’s another example of the trend: a spectrometer that costs as little as $200. An iPhone cradle, phone and app, it has the same level of diagnostic accuracy as a $50,000 machine, according to Brian Cunningham, a professor at the University of Illinois, who developed it with his students (see video).”

“In the future, it’ll be possible for someone to monitor themselves without having to go to a hospital. For example, that might be monitoring their cardiac disease or cancer treatment. They could do a simple test at home every day, and all that information could be monitored by their physician without them having to go in.”

Those slabs in our pockets are so much more than phones.

Read more: A Smartphone Spectrometer Diagnoses Disease At A Fraction Of The Price | Co.Exist: World changing ideas and innovation.

Colonoscopies Explain Why U.S. Leads the World in Health Expenditures | NYTimes.com

From The New York Times, June 1, 2013, The $2.7 Trillion Medical Bill – Colonoscopies Explain Why U.S. Leads the World in Health Expenditures

Average price of an angiogram in the U.S. $914, in Canada $35.
Average price of hip replacement surgery in the U.S. $40,634, in Spain $7,731.
Average price of a Lipitor prescription in the U.S. $124, in New Zealand $6.

There is probably no single reason for the mess that the U.S. healthcare system has evolved into. Colonoscopies illustrate a number of the things that have gone wrong. Colonoscopy has become the gold standard for colon cancer screening even though there are less costly and equally effective alternatives. Liability may play a part here although higher profitability is the more likely reason. Many physicians and hospitals routinely conduct the procedures using general anesthesia even though they can be safely performed with patient sedation. Prices vary widely across the country and seem to be tied more to maximizing reimbursement from insurers than to cost recovery.

This madness will stop eventually, but when and how?

“While the United States medical system is famous for drugs costing hundreds of thousands of dollars and heroic care at the end of life, it turns out that a more significant factor in the nation’s $2.7 trillion annual health care bill may not be the use of extraordinary services, but the high price tag of ordinary ones. “The U.S. just pays providers of health care much more for everything,” said Tom Sackville, chief executive of the health plans federation and a former British health minister.”

“The United States spends about 18 percent of its gross domestic product on health care, nearly twice as much as most other developed countries. The Congressional Budget Office has said that if medical costs continue to grow unabated, “total spending on health care would eventually account for all of the country’s economic output.”” [emphasis added]

Read more: Colonoscopies Explain Why U.S. Leads the World in Health Expenditures – NYTimes.com.

This Electronic Temporary Tattoo Will Soon Be Tracking Your Health | Wired Design | Wired.com

This is a fascinating development in the evolution of body sensors that are continuously updating and collecting all sorts of physiological data. As simple and non-threatening as a temporary tattoo, they appear to have the potential to be relatively inexpensive at scale and are applicable for critical care use as well as consumer health monitoring and even gaming.

It’s unclear if the power source and connectivity are part of the sensor. If not, I’m sure that someday soon those too will be integrated.

This would be fun to commercialize. Just think of all of the novel applications and benefits something like this could provide.

“FitBit too bulky? Why not glue a sensor array to your skin?

The quantified self goes nanoscale with a stick-on silicon electrode network that could not only change the way we measure health metrics, but could enable a new form of user interface. And the researchers behind it aim to have the device available in the next few weeks through a spinoff company, MC10.”

photo of Electronic Sensor/Temporary Tattoo
Electronic Sensor/Temporary Tattoo one week after application

Read more: This Electronic Temporary Tattoo Will Soon Be Tracking Your Health | Wired Design | Wired.com.

A Top Ten List for EMR | Medicine for Real Blog

Terrific insight into the day-to-day frustrations of using healthcare information technology, from the perspective of a practicing U.S. anesthesiologist. Perhaps product managers and company executives for EMRs and other healthcare information systems already know of these issues and the “wish list” of requirements expressed by Dr. Leng. If so, it’s not evidenced by the user interfaces in these systems – most of which don’t (and can’t) talk to each other. One of the comments to this article suggested designing the user interface first and only then should the “back end” of the system be designed. I have a sneaking suspicion it’s usually the other way around.

“Today I’m doing anesthesia for colonoscopies and upper GI scopes.  Nowadays we have three board-certified anesthesiologists doing anesthesia for GI procedures every single day at my institution.  I’ll probably do 8 cases today.  I will sign into a computer or electronically sign something 32 times.  I have to type my user name and password into 3 different systems 24 times.  I’m doing essentially the same thing with each case, but each case has to have the same information entered separately.  I have to do these things, but my department also pays four full-time masters-level trained nurses to enter patient information and medical histories into the computer system, sometimes transcribed from a different computer system.  Ironically, I will also generate about 50 pages of paper, since the computer record has to be printed out.  Twice.”

Read more: http://medicineforreal.wordpress.com/2013/02/14/a-top-ten-list-for-emr/

Ghana seizes ‘faulty Chinese condoms’ | BBC News

A couple of interesting facts from this article and from my experience with a client:

Did you know that condoms are medical devices? (Class II = 510k)

We don’t hear or read much about it but there is a raging AIDS epidemic in sub-Saharan Africa. Millions of men, women, and children are afflicted. Among others, the World Health Organization, the Bill and Melinda Gates Foundation, and the U.S. Department of State are heavily involved in AIDS treatment and prevention in Africa.

One of the most effective HIV prevention methods is adult male circumcision, proven in several large randomized clinical trials in Africa. The substantial reduction in HIV susceptibility demonstrated in the clinical studies is described as providing the equivalent of vaccine-level protection, about a 60% reduction in HIV susceptibility.

The PEPFAR program (President’s Emergency Plan for AIDS Relief) was started by President George W. Bush and continued by President Obama. PEPFAR has spent more than $50 billion on AIDS and other infectious disease prevention and treatment to date. While not a panacea, PEPFAR estimates voluntary adult male circumcision will save $15 billion in HIV treatment and care expense, prevent more than 3 million HIV infections, and save hundreds of thousands of lives over the next 12 years.

BBC News – Ghana seizes ‘faulty Chinese condoms’.

The Future of Mobile Technology in Medicine: Innovative Medical Apps | MedCity News

This is an important trend in new healthcare technology. The convergence of mobile technology, ubiquitous wireless networks, ever-more sophisticated and accurate sensors on mobile devices, and innovative apps developed by physicians and medical device entrepreneurs will result in earlier detection and diagnosis, better treatment decisions, and improved communications between providers and patients.

A few examples from the article among probably hundreds in development: skin mole assessment, burn management, brain ventricle cannulation trainer (for surgical residents), neuroanatomy trainer, and an intelligent log/monitor for diabetes patients

“…mobile technology is on its way to innovate healthcare delivery and the quality of the patient’s experience. Modern advancements in mobile technology are helping with chronic disease management by reminding patients to take their medication at the proper time and generally extending service to various neglected areas, thereby improving overall health outcomes.”

Read more: The Future of Mobile Technology in Medicine: Innovative Medical Apps | MedCity News.

The Salad Bar That Turned Around a Fortune 500 Company – The Health Care Blog

A “Freakonomics” style look at how economic incentives can drive healthy behavior. Next step is to conduct some outcomes analyses. That should get the attention of top management!

The Salad Bar That Turned Around a Fortune 500 Company

By VIK KHANNA

“The Effect of Price Reduction on Salad Bar Purchases at a Corporate Cafeteria.” An excellent peek at the kind of steps that employers ought to take to improve eating habits in their work forces: subsidize the purchase of healthy foods. In this CDC study, reducing the price of salads drove up consumption by 300%.  If this was a stock, we would all rush out to buy it.

Influencing behavior through both choice architecture and pricing differentials challenges many employers, however. There is a fear factor in play (“some of my people will be unhappy”), as well as financial issues, because the corporate managers responsible for food services often have their compensation linked to the division’s profitability.  You make a lot more money selling soda than you do selling romaine.  The same perverse financial conundrum appears when corporate food service companies run cafeterias.  The on-site chef and managers typically operate on a tightly managed budget that leaves them little flexibility to seek out and provide healthier options.

A chef employed by one of the largest corporate food service providers in the country told me last year that he could not substitute higher protein Greek yogurt for the sugar-soaked, low-protein yogurt in his breakfast bar. When I asked why, he told me that Greek yogurt was not on his ordering guide, and he was not allowed to buy it from a local club warehouse and bring it in.  In this same company, beverage coolers were stuffed to overflowing with sugar-sweetened drinks, all of which were front and center (and cheap), while waters and low-fat milk were shunted to the side coolers.  In another scenario, health system leaders I met with last year all raised their hands when I asked if they had wellness programs and kept them up when I asked if they also sold sugar-sweetened beverages in their cafeterias at highly profitable prices.  The irony was completely lost on them.  They had to be walked through the inconsistency of telling their employees to take (worthless) HRAs and biometrics, but then facilitating access to $0.69 22 oz fountain sodas.

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Decontaminating patients cuts hospital infections – Yahoo! News

This is a Big Deal. HAI (hospital-acquired infections) cost the healthcare system billions of dollars and kill thousands.

Decontaminating patients cuts hospital infections – Yahoo! News.

About a decade ago, hospital-linked invasive MRSA infections sickened more than 90,000 people nationwide each year, leading to roughly 20,000 deaths.

One concern is whether the antibiotic ointment administered nasally breeds even nastier antibiotic-resistant bacteria.

The Extinction of the Primary Care Clinic Nurse – The Health Care Blog

An interesting glimpse into the front lines of healthcare at the primary care clinic. I know that primary care physicians are the lowest paid and most overworked of all doctors. Looks like they are squeezing further down the line just to stay financially viable in these times of meager reimbursements and high operating costs. Will Obamacare make a difference? Check back in a few years…

The Extinction of the Primary Care Clinic Nurse

By JAAN SIDOROV, MD

The Passenger Pigeon. The Dodo bird.  The primary care clinic nurse.  All are extinct, driven out existence by a changing habitat, competition and over-hunting. Ask the average person when they’ve last seen these species and you’re likely to get the same baffled look that your columnist’s spouse gives when she’s asked about her compliant husband who does what he’s told.

Yet, this columnist wasn’t aware of the primary care nurses’ total absence until a recent conversation with a nurse-colleague who has been helping smaller physician-owned outpatient offices develop local care management programs.  “There are no ‘nurses’” she said. “They’ve all been replaced by office assistants and the docs are trying to get them to do the patient education.”

Which makes sense. While articles like this have been lauding health care “teams” made up of physicians and non-physician professionals for years, the fact is that poor reimbursement, the allure of other specialties and lifestyle has long-hollowed out these clinics, often leaving a skeleton crew of part-time medical assistants shuttling patients in and out of the patient rooms.  True, some of the larger health systems with a stake in primary care have kept nurses in the mix, your columnist thinks that’s merely part of a market-preserving loss-leader strategy.

This columnist looked for medical literature on the topic.  He can’t find any surveys or other descriptions on how nurses have largely disappeared from the primary care landscape.  If he’s wrong, he wants to hear from his readers.

If true, what are the implications?

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