STANFORD GRADUATE SCHOOL OF BUSINESS —A new generation of medical “rock stars” are blending cutting-edge technology with reams of old-fashioned data to help drive innovation in health care, according to Todd Park, chief technology officer of the U.S. Department of Health and Human Services.
One of more than two-dozen experts who spoke during the 2011 Stanford Graduate School of Business Healthcare Summit, sponsored by the Program for Healthcare Innovation, Park told the story of Asthmapolis, a service designed to help asthmatics. It uses a global positioning device attached to an asthma inhaler and links them both to a web application.
Every time someone uses his inhaler, the device records where the asthma episode occurred, creating a map to help determine if environmental exposure or other factors triggered the attack. With the service, health researchers can see how widespread asthma is in their community at any given time, while doctors can identify patients whose asthma is out of control so medication changes can be made.
The device was one of several that recently won a government-sponsored challenge to entrepreneurs to build web applications designed to help improve patients’ health. Some medical groups are considering using the product, Park said. Another doctor-developed product is iTriage, a mobile phone application developed by two emergency room physicians to enable patients to research diseases and find free and low-cost medical care.
Park said he’s now part of a panel holding a series of American Idol-style “virtual auditions” to find other health data innovations. His office will showcase the winners in mid-June. “All the government did was take a bunch of data, promote it to the right innovators, and they did the rest,” he said. “If health care recruits the best entrepreneurs on the planet … we will invent our way out of our health care problem.”
Another conference panelist, Richard Migliori, executive vice president of UnitedHealth Group’s Health Services business, detailed how his company is experimenting with telemedicine — developing communications technology for remote patient care using telephone and video services.
Right now, four rural Colorado clinics are treating patients with telemedicine arrangements, allowing patients and their primary care physicians to take part in a three-way digital consultation with health specialists located outside their area.
“We’re still in a learning phase here. The economics of these models still have to be worked out,” said Migliori, who believes that broader applications could include setting up secure web communications, enabling families to pay to connect virtually with doctors from home.
Medical firms are also responding to health care’s increasingly global nature. In fact, the United States is no longer the fastest-growing market, said John Capek, executive vice president of Abbott’s medical devices business. While the United States once accounted for 70% of the market for devices used during cardiovascular surgery today, it is 60% and expected to drop to 20% within the next decade, a change driven by rapid growth of an aging population in developing nations.
“In approximately five years, the number of coronary interventions done in India and China will exceed the number that’s done here in the United States,” Capek said. The change will “require investment in the infrastructure to support the therapy, require the training of physicians, and require the overall understanding and utilization of the technology,” he said.
The day-long conference explored innovations likely to transform the global health care marketplace. Participants included business and government leaders, academics, and students, including graduate students who have developed business plans for medical services or devices as class projects. Stefanos Zenios, the Charles Holloway Professor of Operations, Information and Technology at the business school, coordinates the Program in Healthcare Innovation.
One panel of venture capitalists discussed how a growing complexity of new medical devices is changing the industry. The U.S. Food and Drug Administration is taking longer to approve these multifaceted products, prompting some manufacturers to move their development efforts abroad. Panelists cited a Stanford study released last year showing that American patients wait an average of two years longer to access some medical devices already available in Europe, partly because of regulatory delays in the United States.
“It is often the case, particularly on the device side and also somewhat on the drug side, that you can get approval for your product — or at least introduction into humans faster — outside of the U.S.,” said Beth Seidenberg, a partner at Kleiner Perkins Caufield & Byers.
Even with all the medical technology now at their fingertips, patients still must actively oversee their own health, and UnitedHealthcare’s Migliori said the company uses financial incentives to keep workers on track. All employees and their dependents are required to regularly test four key indicators: blood pressure, LDL cholesterol level, fasting blood sugar level, and Body Mass Index. Once health risks are uncovered, the person must enroll in a weight loss or other program to get them back in the normal range — or pay see their healthcare insurance premiums increase the following year.
After being tested for the first time, Migliori said that several hundred of UnitedHealthcare’s employee were diagnosed with diabetes and were able to enter treatment to control this dangerous, but often undetected disease. According to Migliori, this program has helped the company reduce overall healthcare spending while at the same time improving the quality and frequency of the health care its employees receive.
This approach makes more sense than placing rigid restrictions on which patients are eligible to get medical care, as is the case in some European nations. Migliori said: “I think what (Americans) would rather do is to be able to make choices.”
Several panelists urged budding health care entrepreneurs in the audience to be amply prepared before approaching venture companies about financing. Ensure your management team has all the skills required, or that you have outside advisors who can provide any missing expertise, recommended Anne DeGheest, a managing partner at MedStars Ventures Partners of Los Altos Hills.
Start-up health care founders should always look to the future and devise solutions for that new environment, said Seidenberg of Kleiner Perkins Caufield & Byers: “It’s not about solving the problems for today. What’s the world going to look like in 2015 or 2016? I would focus a lot on that.”
— Michele Chandler
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