Many of the changes in the healthcare industry outlined by the Affordable Care Act and HITECH Act call for shifting to healthcare IT for helping physician practices run more efficiently to helping guide clinical outcomes. But the shift from paper based to digital records isn’t just happening among providers. It is carrying over into other industries that healthcare intersects such as pharmaceuticals, medical devices and more robust collaborations with payers.
Andrew Khouri of Quaker Partners, who also mentors Blueprint Health accelerator companies, highlighted some needs in healthcare that are creating interesting investment opportunities and some investment trends at a recent event at the University City Science Center. Khouri acknowledged the “industry is in turmoil” because there’s uncertainty about how the changes will work in practice from the transformation of payment models to setting up health insurance exchanges. But there’s so much momentum to reduce costs and improve outcomes that there is a lot of opportunity.
He identified trends to watch and several areas where startups and investors could find opportunities, particularly in Philadelphia. the region has been identified as one of the biggest life science clusters in the country by the Milken Institute, also has several teaching hospitals and an established health IT community. A health IT accelerator from DreamIt, DreamIt Health, is also starting next month.
1. Using clinical data and claims data to better effect. The shift by providers from paper to electronic medical records has positioned many providers to mine this data to develop a wider and deeper understanding of their patients. Clinical decision support tools will enable physicians to harness large data sets to manage patient conditions and use this them identify and follow best practices for a variety of patient conditions, particularly chronic conditions. Here’s a more detailed description of the different data analytic approaches health IT vendors are offering to providers. Of course big data is not limited to providers. Clinical research organizations are utilizing big data to support pharmaceutical companies and payers are using big data on their own or in collaboration with providers.
2. Remote monitoring One way providers are looking at how to reduce health care costs is keeping people out of the hospital or reducing the length of their stay. One way to do that is remote monitoring. Through monitors that feed information on patients vital signs, particularly cardiac rhythms like Preventice and AliveCor and flagging up issues such as irregular heartbeat. The idea is that these sorts of tools will be able to transmit information to providers and be entered into electronic health records.
3. Making clinical trials more efficient. The process of identifying patients for clinical trials — recruitment, vetting and enrollment — gets frequently criticized for being slow and inefficient, and a number of groups are looking to change that. There are critical regulatory requirements that companies need to abide, but with so many clinical trials spread out across the globe some startups are offering systems to make these trials run smoother and more efficiently. On the recruitment front, a new website, Registries for all Diseases, wants to make it easier for people to find out about clinical trials for themselves and their children. Another company, myClin, wants to improve communication between principal investigators, trial sponsors, regulators and CROs.
4. Help physician practices run better. There are a myriad of ways to help providers and physician practices run better. They can include making it easier for physicians to get reimbursed, improve patient education and adherence, help schedule and follow up on appointments, improve efficiencies with pharmacies and payers. A couple of startups at the seminar shared insights about the part they are playing. DoseCue, for example, is a startup that’s working to improve patient compliance. 1DocWay is using telehealth for behavioral health practices. Still, Khouri cautioned those who are looking to create products with physicians as a customer base that they would will live or die by how much they screw up a physicians workflow.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
5. Exchanging information between providers. Quaker Partners is one of a group of investors as been working with the New York eHealth Collaborative’s digital health accelerator to help identify companies that are developing tools for New York state’s health information exchange or SHIN-NY. It is one way that investors are providing ways to get around the gridlock between big health IT vendors that have been reluctant to collaborate. New York represents the biggest example for this effort, but health information exchanges are being set up statewide as well as regionally and through private networks. And yet it’s only by collaborating that health care IT systems will be able to share information efficiently, although the announcement at HIMSS that Cerner, McKesson, athenahealth, Allscripts and other companies formi an allianceng to develop a way to help providers share information was encouraging.
6. Series A crunch One interesting trend that Khouri drew attention to is that startups are finding it more challenging to get follow-on financing to bridge the gap between seed stage and Series A funding. There’s opportunity for angel and venture investors,to get more involved in these areas, although some venture groups are developing funds that include health care IT companies.
[Photo from David Castillo Dominici, Free Digital Photos]
