In a $120 million (and growing) market saturated with thousands of products, a company that creates medical mobile apps has to do something to make itself stand out.
Preventice, a health IT company based in Rochester, Minnesota, thinks it has a winning formula.
Preventice Inc. (formerly Boost Information Systems) develops mobile to cloud-based health technologies for smartphones and tablets. Through collaborations with the likes of Merck and Mayo Clinic, the company has released close to 40 applications that target prescription medication management, cardiac care, sleep apnea and diabetes management.
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In 2012, the five-year-old company plans on fundraising, establishing a new headquarters in Minneapolis, adding to its 40-person staff and applying for FDA approval for a cardiac monitoring app.
Each of Preventice’s apps is developed with input from clinicians or life science companies, which is what the company’s executives say sets it apart from other companies in the space. They’re not trying to replace a doctor’s care, but rather to make it easier and more efficient.
“We don’t see ourselves working in parallel with the healthcare industry,” said Mike Emerson, senior vice president of marketing. “We look to be that connecting fabric between the patients and various healthcare providers.”
“The landscape is very crowded, and people wonder why these companies haven’t achieved success and physician adoption,” added Rick Tanler, senior vice president of emerging markets. “We know from our experience that physicians don’t want to take on more unreimbursed products. They are looking at the workload and cost of everything else. What distinguishes us from the outset is that the company has worked with leading clinics to build the apps that they thought the market needed — in many cases they were the market.”
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Slow physician adoption is often cited as a primary reason that mobile technology has taken so long to be integrated into healthcare, compared to other industries. Part of that has to do with reimbursement issues, since there are no incentives for primary care providers to use mobile technology under a fee-for-service model, and products that will keep patients out of a doctor’s office could actually hurt physicians’ bottom lines.
Among Preventice’s offerings are SleepSound, a mobile solution that analyzes a person’s snoring to assess his or her risk for sleep apnea, and HealthClips Rx, a cloud-based platform for on-demand educational videos (sold by Milner-Fenwick) that healthcare providers can prescribe for patients.
Its most recent release is the Contact Allergen Replacement Database (CARD) application, which gives patients access to information about chemicals, preservatives and fragrances in skincare products that cause allergic reactions, and allows them to track and photograph allergic reactions.
With revenue doubling year on year, the company has experienced steady growth. An underlying consulting business provided enough revenue to get Preventice on its feet before needing a round of funding. When the time came to raise money, Fargo, North Dakota firm Arthur Ventures invested $1.5 million, and an undisclosed “big life science company” added more funding to that round in January, Emerson said. Arthur also had interest in growing Fargo’s workforce, so Preventice opened a development office there in March.
The company will gear up to start raising more capital in mid-2012, he said.
In the next several months, Preventice will focus on submitting to the FDA a new app it’s developed with Mayo Clinic. The cardiac care app allows physicians to monitor patients remotely, which potentially allows patients to leave hospitals one to two days earlier, said Dyke Hensen, senior vice president of strategic partnerships.
The process of approval is likely to take four to six months, Hensen said, but that brings up another challenge for mobile health companies. Although the U.S. Food and Drug Administration has released some guidelines for its oversight of medical mobile apps, there’s uncertainty about how regulations expected to be rolled out next year will affect the market.
Long term, Emerson said the company is thinking globally and looks to expand distribution internationally over the next 18 months.
“The market is absolutely ready,” Hensen said. “The government, the market and the technology are all coming together rapidly. It’s going to be a revolution.”