In a previous article, I described an example of changes in healthcare delivery that can help get America past the stale debate over Obamacare toward innovation to improve healthcare while reducing its cost. What is being called “telemedicine” or “telehealth” is a potentially radical shift in how healthcare is delivered. It combines remote monitoring of patient health, remote access to doctors to overcome the barrier of distance and portable medical records and profiles.
How will healthcare investors and service providers take advantage of new innovations?
A good place to start is to consider the full range of demographic, societal and patient management trends at work throughout our society. They include:
- A population that is living longer, relatively healthier and more able/inclined to expend an increasing portion of their disposable income/savings on various forms of travel.
- Increasing technology savvy especially with mobile devices, which are replacing other kinds of hardware like desktop and laptop computers as the dominant platform for computing and communications. The public has a strong appetite for mobility, as evidenced by their continued willingness to upgrade to next generations of smart phones and tablets.
- A growing interest in taking greater control of one’s well-being and the healthcare decisions influencing same.
- The willingness to embrace (and pay for) the various approaches to “concierge medicine” wherein your ready access to quality healthcare and your medical records and health preferences is assured regardless of where your travels take you.
- A concerted effort on the part healthcare expenses payers on the development of technologies and incentives to facilitate the administration of care in lower cost settings.
- In a similar vein, the desire on the part of the consumer of medical care and their care givers for the administration and monitoring of medical intervention in the home (lower cost) setting.
- The proliferation of apps that monitor and store fitness, exercise and health data.
- The monetary and other incentives offered by employers and insurance companies in recognition of individual efforts to take steps toward “health consciousness”.
The development of sensor technology to remotely monitor vital signs and lifestyle/fitness data has attracted a significant amount of venture investment in recent years and the formation of a growing number of start-up companies often focus on the next best way to monitor a single health attribute such as blood glucose in diabetic patients and ECG sensors in patients with various cardiac abnormalities.
Taking Healthcare Technology to The Next Level
For these disparate health apps to reach their target, however, a cohesive infrastructure that integrates them into an ecosystem will be required. The rumored entry of Apple into this space with the “HealthBook” iOS app, coupled with a team of senior executives Apple is building that has deep health/wellness experience, may be a step toward creation of such an online health infrastructure. HealthBook is thought to be a series of separate “cards” that will allow the user to display screens on an Apple device (IPad, IPhone, IWatch, etc.) to measure, monitor and store health profile information. Presumably it will be capable of transmitting this data to a remote site, e.g. a physician’s office or Cloud-based file. Apple’s presence will likely influence the product development activities of some of the smaller companies currently in the space, producing greater software compatibility.
It is important to note that, unlike the myriad of apps that are routinely released without regulatory oversight, healthcare apps would be subject to review and clearance by the Food and Drug Administration (FDA) Bureau of Devices. In September 2013, the FDA issued a guidance document on the regulation of mobile medical apps which were defined, in part, “to transform a mobile platform into a regulated medical device”. The extent of the review would be predicated on the app’s FDA classification. All such apps would be subject to compliance with the FDA’s Good Manufacturing Practice (GMP) and Quality System regulations. The time and cost to meet these requirements and achieve FDA clearance can vary greatly.
Key Developments in Consultation Technology
Another key development, after several false starts by Google Health, Cisco and IBM: a resurgence of interest/investment in expanded access to expert consultation, spurred by federal and state incentives. The goal is to improve care for constituents such as the rural population and to slow the increase of healthcare costs. Google is understood to be in test mode with Google Helpouts, a fee-based program providing subscribers the opportunity to interface via videoconference with medical specialists.
There is clearly a growing focus on product/technology innovation which, over time, may result in the assembly of a new consumer healthcare mosaic. In the last article in this series I will provide an overview of several potential investment hypotheses in telemedicine that VC’s, private equity firms and other professional investors might pursue-- as technology pushes healthcare innovation forward.
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About the Author
Bob Hickey has a diverse background in general management roles ranging from start-ups to large corporations. He served as CEO and a member of the Board of Directors at SyntheMed, Inc., a publicly-traded company that develops and markets surgical implants derived from biomaterials.Bob led t the clinical and regulatory development program that resulted in the FDA approval of the company's key product; raised $30 million of equity financing and established an international distribution network, among other accomplishments. Learn more or contact Bob Hickey here.
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