Posts Tagged Genomics

Changing World of Medtech Investors (includes Software, Big Data, Mobile, Biotech & more) – 2015 WSGR Conference


While there has been a decline in traditional medtech investments, non-traditional investors are investing in new and emerging areas, in medtech.  Software and IoT investors are interested in containing hospital costs and increasing operational efficiency in healthcare institutions.  Biotech investors are interested in alternative therapies, and internet investors are looking at ways to change the way devices are sold and big data investors are looking at opportunities to contain disease outbreaks and better manage large disease populations.  International investors are tapping US expertise to build medtech businesses at home.

A panel at WSGR 2015 Medical Device Conference, moderated by Uday Kumar, Founder and CEO at Element Science Inc., addressed the changing world of medtech investors.  Joining Kumar on the panel were Tom Rodgers, SVP & Managing Director at McKesson Ventures; Andrew Atwell, Principal at Global Innovation Center, Strategic Investments Group; Asha Nayak, Global Medical Director at Intel Corporation; and Conrad Wang, Senior Director of Corporate Development at Medtronic.  Below are some highlights from very interesting panel discussion on changing face of medtech investment.

According to Wang, Medtronic vision is to be a collaborative solution provider in healthcare, with a specific focus on new therapies and geographic diversity of emerging markets.  His advice to entrepreneurs, “focus on how your solutions can create value”.  Instead of being enamored by a technological enhancement, entrepreneurs should keep in mind the impact that the new breakthrough may have on the stakeholders in the healthcare delivery chain. Due to a combination of factors, chronic conditions are increasing globally.  Medtronic looks for opportunities that would enable healthcare providers from engaging in episodic care of chronic diseases to providing continuous care.

Atwell said there are numerous opportunities in the Big Data space, particularly in consumer generated data.  “Our main driver of revenue are mobile devices”, said Atwell.  There are also many challenges.  For instance, it is challenging to get accurate data and see meaningful trends.  It is also a challenge to understand early on how large the market might be and how quickly adoption may happen.  Atwell said his group invests in early and seed stage to A and B rounds and typically invest from $250K to $3M, in any given opportunity.  “We focus on building collaboration among experts from data analytics, health IT, and workflow efficiency”, said Atwell.  He further observed, “additionally, we also look at behavior change space since there is so much access to individuals through their mobile devices”.  Even if they may not help exert deep influence and impact in changing behaviors, mobile devices can exert significant influence over much larger population and can be an effective behavior change tool, said Atwell.

According to Nayak, Intel approach is to provide a piece of healthcare solution that fits in enhancement of health and quality of life, while keeping in mind TCO or total cost of ownership, in healthcare.  Her advice to entrepreneurs, “you should know if you are able to provide a piece that will fit in total solution, even if that may be a few years later”.  From consumer devices, typically wearables, an entrepreneur should be able to harness value in a trustworthy manner.  There are some key questions that an entrepreneurs must ask. 1) Is the data trustworthy, not just in accuracy, but can it be consistently used by the right person?  2) With wearables, one needs to add unequivocal value and discern it from gobs of data.  3) An entrepreneur must consider how it will fit into the current workflow without adding more time to the system.  Entrepreneurs often don’t get this piece, said Nayak.  4) Security of data is critical.  Anytime data needs to be securitized, any time data moves, Intel makes money on it, said Nayak.  5) How is the cost and care impacted through wearables.  Nayak said, Intel is interested in building ecosystems and platforms around the notion of building long term improvement in healthcare, at lesser cost.  Intel invests in all stages from seed to commercialization.   “My group is interested in partnership, and all of our investment is strategic”, said Nayak.  Many areas of interest include, telemedicine, patient management of telemedicine, management of chronic and acute care and also precision medicine, genomics, and analytics that can extract data, said Nayak.

According to Rodgers now the focus is on whether or not an entrepreneur can you navigate the carpteted area of hospitals and provide actual solution that makes a difference.  His advice to startups is to position devices as service.  Device can also be a powerful tool to capture data to ultimately keep people healthy, said Rodgers.  However, average provider does not have the time or the training to deal with the deluge of data.  In order for the data to become actionable, we may need a whole layer sitting in between the patient and the provider, monitoring the datasets, observed Rodgers.  He also advised that entrepreneurs may focus on emerging growth areas and shift to models that enable direct consume care.  We focus on strategic areas, not tactical, said Rodgers.

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JPM 2014 – Dr. Delos M. “Toby” Cosgrove, CEO & President, Cleveland Clinic: on Challenges, Opportunities & Affordable Care Act


During the luncheon keynote, Cosgrove began by quoting Lenin, “there are decades when nothing happens, and then there are weeks when decades happen”.  Clearly there is tremendous activity and major and disruptive overhaul happening in the healthcare sector.  To meet increasing demands proactively, Cleveland Clinic has made some significant changes in how they operate.  These include, one year contracts for employees, eliminating tenure tracks, implementing annual performance reviews, offering high deductible insurance policies, and greater transparency throughout the system, said Cosgrove.  Many other businesses are also moving towards some of these reforms.   In the new healthcare environment, retail clinics like Walmart and CVS will play a significant role.  Over 813 branded clinics and hospitals and other providers are partnering with these retail clinics, in anticipation of the shortage of physicians that will hit the system.  Cost pressures will also intensify as providers are increasingly pressured to move from the volume based system of providing care to value based system, linked with outcomes, said Cosgrove.  Cost pressures are coupled with pay cuts in education for physicians and other practitioners and there less money coming from VC funding sources.

Among the challenges, are hidden opportunities that can help overhaul the system to make healthcare better.  For instance VC funding for Health IT has gone up, M&A continues at rapid pace, and some of the focus on behavior changes is yielding good outcomes, said Cosgrove.  Genomics and behavior modification represents some of the largest unmet challenges and they account for 70% of premature deaths in the US.  At CC, with a relentless focus on behavior modification, employees collectively lost 430,000 pounds.  Similarly, genomics has opened up a huge opportunity in healthcare.  Approximately, 4300 single gene diseases have been so far been identified, and the cost of sequencing of full genome is dropping rapidly.  Other huge opportunities are with respect to patient health records and management of big data in healthcare.  CC has given 1.8 million patients access to their electronic health records.  Quoting “IBM’s Watson Computer”, Cosgrove observed that artificial intelligence is opening huge opportunities in healthcare.

All the disruptions in the healthcare should eventually enable society to “build a healthcare system that is humane, high quality, and sustainable”, said Cosgrove.  But this transformation will not be painless.  It will require a great shift in mindset for physicians and also in how people view healthcare, in society at large.  Roles of care providers are changing rapidly.  Only about 10 years ago, hospitals used to be epicenters of care.  Now increasingly care is delivered outside the hospitals and we need to develop systems that support and scale out of hospitals care delivery, said Cosgrove.  A few hospitals will need to be very high tech and to offset costs, they will need to share and partner with other care providers.  Cosgrove gave the example of CC’s high tech data center built at the cost of $170 million.  Cosgrove said, healthcare is the only industry that has not consolidated and it will need to consolidate in the coming years.

The only criticism Cosgrove offered with the implementation of affordable care was that it has not built in incentives for wellness.  Obesity is sharply rising in the US and it needs to be contained, in order to control costs, said Cosgrove.  Affordable care bill is not perfect and there will be unintended consequences, but they can be dealt with.  One of the shocking thing that Cosgrove opined upon was that US will one day have a single payer system, with basic healthcare provision for everyone, and optional choices in supplementary insurance on top of that.  This was an exciting keynote.  The whole bar in healthcare is being raised and Cleveland Clinic is clearly taking a leadership role in meeting the challenges head-on.

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