Bloated valuations. Fat investing rounds. Big new funds ready to spend. It’s enough to make you say bubble. And it’s harder than ever to find the hidden (read: low cost) health IT and mobile health gems that will make for the next big exits.
Then again, how can promising startups be heard against the din of billions in federal dollars fueling a health IT craze that’s churning out scores of other startups?
And – perhaps just a critical point – do all those West Coast tech investors suddenly into the medical scene have maps that extend beyond Sand Hill Road to invest that capital where healthcare innovation really happens?
We’re here to help.
The number of mobile app and health IT companies are growing almost as fast as the market itself. So here’s a half-dozen early-stage companies you should already know about (but probably don’t). Some are addressing game-changing problems. Others come with top-tier management teams. And almost universally they have major market opportunities.
Think smart phone as a weight-loss tool. HEALTHeMe’s software learns about a user’s lifestyle, then develops a personalized exercise and diet plan over time that helps the user reach health and weight loss goals. The personalized plan is managed online – by smart phone if a user prefers. Tailored reminders can be sent via text message. HEALTHeMe’s software is HIPAA compliant so healthcare professionals can also connect to the tool and share in updates on a user’s progress.
HEALTHeMe was co- founded in 2010 by Guy Rachmuth, a Harvard-trained neuroscientist, and Sloan Rachmuth, a media psychology specialist who has 15 years experience in obesity counseling. The company is now in what might be its biggest test so far: Blue Cross Blue Shield of North Carolina this summer tested the program on 300 employees. The insurer said it would evaluate the benefit of online weight-management tools that can be deployed to employees on a larger scale.
This Series B startup nearly forfeits is cutting-edge card: it’s still on MySpace. But the company is undergoing major change: from a consumer wellness portal to one that supports the doctor’s practice. Plus, it has consumer health’s “it” guy: Dr. Mehmet Oz is on the company’s advisory board.
Why the change? Healthy Humans was a company that started as a virtual middle man. It created personalized wellness plans for patients with chronic illnesses that sat between patients and physicians. Now its software stands on the side of doctors. The revised platform, which went into production in January, integrates a primary care doctor’s electronic medical records and practice management system, according to the CEO Anthony Gold, who was the vice president and general manager for open source at Unisys.
Physicians and administrators can use the new platform to respond to patient prescription refill requests, schedule appointments, enable patients to view lab results and other tasks.
As of September, approximately 200 physicians are using the platform, Gold said. The clients include doctors in independent, group practices and hospitals in about 10 states. Its greatest asset is in identifying care gaps, such as reminding women once they hit 40 that they need an annual mammogram. The goal by the end of 2012 is for the software to be used not only by hospital systems, but also by payer organizations, self-insured employer groups and insurance companies.
It’s a cross between Twitter and Match.com in an attempt to recreate the way pharmaceutical companies and hospitals work with one another.
Using the approach of a social network, hospitals and physicians in the Qualtrx network broadcast their needs, which can be as specific as the desire for an individual product or patient care need or as broad as an organizational goal. Then, medical sales representatives will buy access to the system, respond to the health systems’ needs and (presumably) make a sale.
Hospitals sign up for free to use the Qualtrx platform. The company plans to make money by selling a subscription to vendors looking to sell products or services to the hospital.
CoverMyMeds solves problems with prior authorization requests, a method insurance companies use to save money by requiring doctors to obtain permission before a patient’s prescription is filled. The company’s software makes it quicker and easier for doctors to route those requests to, and receive responses from, health insurers.
Pharmacies and doctors use the service for free. CoverMyMeds makes money by charging fees to drug manufacturers, which want to increase their sales by speeding up the prior authorization process. Clients’ drug reps then promote CoverMyMeds’ service to doctors and pharmacies. The company now adds nearly 150 doctors daily.
Earlier this year, the company closed a $1 million investment it planned to use to add to its 25 employees and continue developing its software. “It’s all about grabbing as much business as possible because we’ve done something that no one else has been able to do in this space,” Sam Rajan, principal and co-founder, said at the time. CoverMyMeds has raised a total of just under $2 million in investment funding.
Early-stage startup Huneo was launched to take advantage of what’s expected to be an explosion in healthcare data in the coming years. The Cleveland company is looking to use its IT expertise to help capture and send data in real time to several different types of doctors for a number of different health applications: sleep studies, heart studies and athletic performance monitoring, for example.
Founded by executives who honed their knowledge of real-time data capture in the manufacturing industry, Huneo manufactures small, wireless sensors that can be attached to patients to gather health data. “The whole idea of what we’re doing is very low-cost data acquisition,” CEO Phil Ryder said. “The value is in having and presenting data – not the devices themselves.”
Huneo is initially looking to make its mark in the sleep studies field, which makes sense given that one of the company’s founding partners, Dr. Jed Black, is the former director of the Stanford Sleep Disorders Clinic. The company is planning by the end of the year to submit a 510(k) application seeking FDA clearance of an at-home sleep apnea diagnostic system, Ryder said.
Thanks to its small sensors and the cloud-based data storage, Huneo’s technology allows for sleep studies to be conducted in patients’ homes rather than sleep medicine centers. Huneo will also provide a web-based software interface enabling doctors to monitor and access data.
This one you may have heard of. Axial Exchange in August was named one of 11 finalists in Morgenthaler Ventures’ nationwide contest to find the most promising health IT startups seeking seed or series A funding. Earlier this year it raised $1.5 million in a series A round led by Canaan Partners; IDEA Fund Partners also participated in the round.
Joanne Rohde left open-source software company Red Hat (NYSE:RHT) to found Axial, which claims to send healthcare data “where you want it when you need it.” It is developing software to make information more accessible to providers – even if that information resides on a legacy system. It aims to keeps physicians connected to what is happening at a hospital, laboratory or other healthcare facility regardless of where the doctor is located. Records, real-time electronic alerts and lab results can be sent to doctors, who can access the information by computer or smart phone.
Rohde is no stranger to health IT. The former Red Hat chief operating officer was also director of health IT strategy for the company. And like the software of her former company, Axial Exchange’s offering is open source.
MedCityNews.com staff members Brandon Glenn, Chris Seper and Frank Vinluan contributed to this report.