[The mHealth Summit is the largest annual gathering dedicated to mHealth in the world and convenes a global group of researchers, health professionals & industry. As a media partner for the Dec 5-7 Summit, iMedicalApps has presented an exclusive series of interviews with keynote and prominent speakers titled “mHealth Leaders speak to iMedicalApps”. Be sure to join us next week for coverage from the conference.]

Sotera Wireless has firmly established itself as an early front-runner in the mobile health race with its the Visi Mobile system. It is one of several promising startupsthat have raised considerable venture funding and that have high hopes for commercializing its system.

Tom Watlington has been involved as either part-time or full-time CEO at Sotera Wireless since 2004. He has guided the company through several strategic investment rounds and helped develop deep long-term partnerships with industry giants like Qualcomm and Intel, as well as mobile health trailblazers like the West Wireless Health Fund.

Mr. Watlington counts its location in San Diego among the company’s strategic advantages. I am inclined to agree with him on this point, and have written before about the importance of regional innovation systems for driving disruptive innovation. I singled out San Diego as the leading regional innovation system in the mobile health sector. Along with its location, the deep engagement of long-term strategic partners like Qualcomm and Intel truly put Watlington and Sotera, formerly Triage Wireless, in great position to hit the ground running when the ViSi Mobile system receives clearance from the FDA for commercialization, tentatively expected for Q1 2012.

Below you can read my complete interview with Sotera Wireless CEO Tom Watlington.

iMA: Why are you participating in the mHealth Summit?

Mobile, wireless technologies will be the key to affordable healthcare in the future. But the implementation requires an understanding of the issues and coordination between all of the stakeholders — industry, providers, payors, regulators and legislators. I participate whenever possible in these events, particularly in Washington, to contribute what I can and ensure that the perspective of a small start-up company is represented.

iMA: What do you hope to get out of it?

Insight into the perspective of others impacting mHealth. As the CEO of a start-up, it’s important to stay abreast of the issues and be able to predict, as much as possible, developments that affect the business environment. Small companies don’t have the body fat to weather a storm the way established corporations do. We have to prepare.

iMA: Could you please share a few thoughts on the potential of mHealth to improve health?

I think it was Christenson who said that if the system is to remain viable, we have to develop technology that enables less-expensive health professionals to provide more sophisticated care in lower cost settings — mHealth has that potential.

Also, the key to affordability in the future will be keeping people from being elevated to higher more expensive levels of care. This is as relevant outside the hospital as it is inside. Preventing people from transferring from assisted living at $60 dollars a day to a nursing home for hundreds of dollars a day, or from the general floor of a hospital at $1,400 a day to an ICU at >$3,000 requires that they be monitored throughout their normal active day to spot problems at an early stage and alert the care provider in time to intervene. Again – mobile wireless medical devices are essential in this scenario.

iMA: Could you please share a few thoughts on how the mHealth revolution may change the practice of medicine?

The “digitization” of medicine – a prerequisite for mHealth – is going to allow doctors and nurses to effectively manage more patients at lower cost.

iMA: What makes the mHealth Summit special?

There’s a proliferation of conferences on the topic, but few that span the range of topics and knowledgeable professionals from so many fields as this conference.

iMA: Tell me about Sotera?

Sotera Wireless is a startup in San Diego that’s developed a novel platform to monitor all of the vital signs continuously including blood pressure along with ECG and motion. It was designed to be worn on the wrist of ambulatory patients in a hospital where spot check monitors are the standard of care. It relies on two thin cables connected to the wrist – one to the hand where sensors are worn around the base of the thumb and the other to the chest connected to traditional ECG electrodes. The system wirelessly connects to a hospital’s network and allows the doctor or nurse to view the patient remotely on any stationary or mobile computing device. The first product, called ViSi Mobile is currently under review by the FDA. The next generation will be modified for use in the home.

We are very fortunate in a lot of ways for being located here in San Diego. We were also the first health care investment made by Qualcomm, subsequently they have made four others. We have been affiliated with them for awhile, we are very fortunate. We are about to add another strategic investor for whom we will be the first health care investment. So in a lousy market for raising capital, it has been critical for us to have the strategic investors. It was actually Gary West who put the money in initially, and then we transferred into their fund.

iMA: Expand upon what you mean about San Diego

I think someday it is going to be the center of the wireless universe in many respects because its ideal. There is strong representation from every necessary angle, whether wireless, telecom, medical device. We have so many different research institutes and great schools, its just the right environment. From the perspective of an industry that is truly the convergence of many industries, particularly with the mix we need for mobile health, this is the ideal location.

This company is the tale of two startups. Initially it was started as Triage Wireless with the very focused purpose of creating continuous non-invasive blood pressure monitoring without the use of a cuff. It was always envisioned that technology would have wireless of Bluetooth capability built-in, but the science was purely focused on blood pressure. Then following our B Round, when our first strategic investors joined the company, those being Qualcomm and Intel, that is when an engineer named Bobby Kandaswamy joined the board and joined founder Matt Benet to bring the same brilliance on the engineering side, and the two of them put together the platform we call ViSi. The two of them combined have made this possible, but it was really two distinct chapters in the companies history and now we are about to launch the product itself.

iMA: Were you born out of a San Diego research institute?

No, Triage Wireless was truly a company built out of the garage of our co-founder Matt Banet. I joined the company as a part-time CEO in 2004 when Sanderling Ventures made its initial investment after having left BioSight, as well as part-time CEO for another Sanderling Ventures company. I then joined the company full-time in 2007, so for those first 2-3 years Matt literally worked out of his garage and then out of a small office space with 5-6 full-time engineers.

iMA: How many people work for you now?

Just over 60. We have grown a lot. A lot of people kinda scratch their heads and say ‘why have you hired all these people?’ The answer isn’t that we have an expanding commercial operation, because we don’t, we haven’t hired our first sales rep yet, it’s almost exclusively engineers and scientists because the scope of the ViSi system is greater than the products typically developed in a start-up company. This is not a single device, its not a one-off algorithm, it’s a comprehensive system that entails proprietary methods for measuring most of the traditional vital signs, and when I say proprietary I mean they have virtually all been adapted to operate reliably in an environment of motion.

The whole system was conceived and designed to operate in that very difficult environment, so there was a lot of customization that needed to take place to incorporate things like SPO2, respiration, CNIBP [continuous noninvasive blood pressure]. And, on top of that we have the hardware itself on which we now have several filed patents that have been submitted around that technology. Then on the backend, with data being transmitted to a variety of viewing platforms, I think we have a very dynamic viewing platform, and we have several new sensing methods we are working on, so we are a technology intensive company with a lot of active R&D.

None of it would be possible if the bulk of our backing [investors] wasn’t weighted toward strategics (Intel, Qualcomm, West Health Fund) and one very progressive venture fund, which is Sanderling. The Sanderling team has always had a long term vision and really understood it’s not about just the first product to market but the generation beyond and all the enhancements we are capable of to add value.

We have this remarkably novel platform called ViSi which is the underlying architecture. The next generation of that particular platform will be totally wireless, no wires on the body or sensors, and that would be used primarily for monitoring in the home and in parallel we are developing new sensing technologies that we are working on. CNIBP is the first but it is not the only one, and we have over 120 cases filed with the patent office, so we are really prolific when it comes to innovation.

So it’s not like we are coming out with several unique products, all of our innovations are embellishments on the core ViSi architecture. The ViSi system is truly remarkable, weighing only 120 grams but bringing the monitoring capability of a very large and expensive bedside vital sign monitor that you would find in an ICU, so its going to be a platform on which we are going to layer a lot of new and innovative things, and of course its wireless so we will want to operate initially in the hospital and then move out.

iMA: You mentioned you have submitted for FDA approval and expect to receive it soon. So when do you expect to hire that first sales associate ?

We have identified one sales associate, she is currently operating as a consultant but she will be coming on board very soon. The first quarter is when we expect to begin commercialization of the platform. We are currently undergoing expedited review with the FDA, which means we have been sponsored as worth quicker review process but doesn’t guarantee approval, it just means they will get to it quickly and we hope, but have no way of being certain, we will achieve clearance from the FDA, then we will launch the first generation of ViSi and that will be in the first quarter.

iMA: And that will be a clinically-oriented version of the platform?

It is an ambulatory system, so its purpose is to detect the vital signs of a patient and detect a problem in that patient who is otherwise free to move about. The ICU does a perfectly adequate job of monitoring patients in that setting, the ICU is not our target, our initial target is not going to be in the high acuity area but is instead going to be on the general floor of the hospital and other areas of the hospital where patients could potentially benefit from additional monitoring because the standard of care right now is a spot check monitor.

iMA: So you want to put the ViSi system on every patient as soon as they are checked into the hospital?

Yes, I think someday that will be the standard of care when it can be done affordably. At the moment I think we can expect continuous patient monitoring will be applied to large groups of patients inside hospitals, the elderly which is one huge patient group that is susceptible to chronic problems, patients recovering from procedures, there are all sorts of patients on the general floor who are considered to be at risk who will benefit tremendously from our system. There are hundreds of thousands of deaths every year in hospitals around the country that are considered preventable but nobody was there to catch the problem. Extrapolate that to the home, when our healthcare system kicks out patients due to excessive costs of in-patient care, somebody still needs to be watching and have access to the data necessary to identify the onset of trouble, its useless information after a crisis has already occurred.

iMA: Do you anticipate the ViSi system being used in the home as a life alert monitor or is the data going to be continuously monitored on the back-end by humans?

This is a very important point, I am glad you raised it. The system is going to save time and save labor, it is intended to continuously monitor all of the vital signs of a patient, plus other things like motion that are indicative of a patients general well-being of state of health, and to do that and detect trends that suggest the patient is beginning to show the signs of a problem. That is relevant anywhere, people don’t just have a heart attack or a stroke or some other medical crisis, there is typically a period of time when the body shows signs, through vital signs, through level of activity, that there is something going on and if you are monitoring that there should be a means of intervening.

A lot of these systems that are out there now that are diagnostic are related to cardiac function, they are looking for a-fib and arthymias, and that sort of thing. We are talking about changing that paradigm and monitoring people in a way that is almost invisible to them and do so with a system that is smart enough, intelligent enough to recognize changes that warrant warning their doctor and then being able to intervene in advance. At the end of the day, money in the health care system is going to be saved when we have the technology that can predict things before they occur, or early enough when you can intervene and prevent it from happening – that is how you save money.

The only way to do that is to measure all of the vital signs, because there isn’t always one magic bullet you can rely on, and that’s what we are doing and that’s what sets us apart. We are not just building wireless technology, we are measuring all of the traditional vital signs and even new vital signs that aren’t even on the market now that will be predictive.

iMA: You started to touch on the cost element, do you have a price for the system in mind yet?

What I can tell you is that it will be extremely competitive and in the price range of the lower end spot check monitor, so we are talking single-digit thousands, even low single-digit thousands, in that range, and then there is a consumable version, a patient kit that will be used for each patient that will allow that individual to be monitored for 4-5 days in the hospital or whatever the length of stay it is being designed for which will be hundreds of dollars.

iMA: Is your business model driven by reimbursement? Have you settled on a business model yet?

Oh yeah, absolutely. One of the reasons we chose to move into the hospital first was first to prove the system worked, but also because we don’t have to worry about reimbursement. That doesn’t mean we don’t need to worry about the system being cost effective, but I don’t need to get a CPT code in a hospital because it is all covered under prospective payments. Patient monitoring is not a billable thing, it is covered by the basic standard of care of the hospital. We do have to show that it saves money, we do have to show that it makes the staff more efficient, that more patients can be taken care of, that the quality of care can be improved, that length of stay can be shortened, but we don’t have to get a CPT code like we would if we went out and tried to compete in the home market right now.

iMA: Does the ViSi system interact with users cell phones, or do you have a complementary app that augments the body-worn sensors or will you have cellular connectivity embedded into the device?

That is a good question, and the answer is in the future we will. We have actually proven feasibility with Qualcomm (for embedded cellular) much in the way of the CardioNet device, but for our initial distributions in the hospital it will be entirely wi-fi enabled. Once the patient is on the hospital network, the system can operate completely alone off the network, but once on the network it recognizes that and then it becomes possible to send alarms to specific individuals in the hospital, it becomes possible for a nurse anywhere in the hospital to view any patient in the hospital that is being monitored, it makes it possible for a doctor who has access to the network from their home to actually monitor in real-time how a patient is doing.

To me the ultimate vision is to have the ability to monitor your parent who is sick but lives across the country and is either still trying to maintain independence in the home or might even be in the ICU. My dad was in the ICU before he passed for two weeks and I could never get clear information about his condition. I don’t think it’s that much of a stretch. As someone that deserves the right to monitor a close loved one, I should have been able to dial up his vitals and see how he is doing and receive information directly when alarms are triggered, that technology exists, there is nothing preventing it technically. I think there are more regulatory issues, financial questions and privacy concerns that are standing in the way but nothing else is…

iMA: The core technology is already at your fingertips…

YEAH! Our goal is to build a system that can work anywhere. It should require that you remain in place, or that you remain in a hospital or your home, or that the doctor be in their office or the hospital, there ought to be seamless connectivity and we can achieve it and that day is not that far into the future.

There are those that advocate there should be dedicated licensed bandwidth for medical devices and while I can understand that for implantable devices, WMTS [wireless medical telemetry services] is one example where that model totally failed from many perspectives. Doing that demands companies like Sotera go out and build proprietary technology and proprietary radios and that is extremely expensive. I want to go out and buy the same radio chip for my devices that is going into a cell phone or various other consumer devices that are being made and sold in the hundreds of millions so I can benefit from the economics. If I have to build radio because somebody has licensed a specific band then it makes it impossible to build an affordable solution, and if you are going to go from the hospital into the home you have to be cheap, I mean that is the bottom line.

Hospitals can’t be expensive, our system is relatively low-cost compared to a system even close to our capability in the hospital, but when you move from the hospital to the home you go from talking about thousands of dollars to hundreds of dollars for a device that is this sophisticated and that is going to take some time. That is where this convergence is so critical; the fact is we are working with Qualcomm, we are working with Intel, we are working very closely with Texas Instruments, we are working with pioneering consumer electronic companies who are turning their focus to health care applications and products. I can’t tell you what will be the radio technology of choice in two years when we take the product out of the hospital into the home, but I can tell you there will probably be several new technologies that aren’t even on the horizon yet.