[Ed. This article, originally published 4/9/12, has been updated 4/11/12 with photographs from the event and more commentary]
The idea of a startup accelerator was popularized by YCombinator (@ycombinator), which was launched in March 2005 by legendary entrepreneur and angel investor Paul Graham, and has since become the most exclusive club in Silicon Valley.
Judging from the last six months, I believe 2012 will be the year of the digital health accelerator. Rock Health was first to launch in San Francisco with their first class moving into their Chinatown loft in mid-2011 and graduating the five month program shortly before the mHealth Summit at the beginning of December. In January, two additional digital health accelerators launched with Healthbox in Chicago, backed by Sandbox Industries, BlueCross BlueShield Venture Capital and Walgreens) and Blueprint Health in New York City backed by TechStars.
Last week I attended Demo Day at Blueprint Health, the NYC accelerator affiliated with TechStars, and this week I was back in Chicago for Healthbox Investor Day on Michigan Avenue.
Below you can read my detailed live coverage of the latter.
Nina Nashif, the Managing Director of Healthbox (@health_box), followed the world premiere of the Healthbox theme song by highlighting the inspiration for Chicago accelerator – fostering a 21st century health care renaissance – and introducing the keynote speaker, CTO of the Federal Government Todd Park (@todd_park).
This event was really as much a coming out day for Nashif and her staff as it was for the ten startups her team nurtured over the course of the past three months through the early stages of product design and business development. As far as I am concerned, the Healthbox team hit the biggest home run of the day by capping off an impressive show with the big announcement that they will be hosting their next class of resident Healthbox startups at their new sister accelerator in Boston. Unfortunately for the Healthbox team, their announcement came mere days after Rock Health let it be known that they too will be opening up a branch of their accelerator in Boston this fall when they host their third class of digital health entrepreneurs.
CareWire (Minneapolis, MN)
CareWire (@carewire) helps providers generate more revenue from existing patients by guiding them to and thru their appointments using SMS. Park Nicollet is CareWire’s first large commercial customer with 18 clinic sites throughout the Twin Cities. This partnership puts CareWire into the black and sets stage for growth. Day of surgery cancels happen 1/15 and cost $1500/hour. Healthcare is a thin margin business. “Providers who have invested in major EHR deployments are suffering Epic hangovers”
CareWire automatically processes scheduling data and has shown in their pilots that SMS is the best way to increase patient attendance and compliance. Patients have demonstrated they will respond to CareWire texts, regardless of age. 100% of patients in early pilot found SMS reminders helpful and less painful than phone calls. CareWire delivers a lot of different types of SMS, including compliance information, reminder of what to bring with them to the appointment, what not to do prior to surgery, links to additional information helpful to managing their condition, as well as follow-up patient satisfaction polling (0-10 scale after each appointment) – delivers patient satisfaction data to providers in real-time and can break data down by subgroups, such as type of appointment or subspecialty.
My Coupon Doc (Atlanta, GA)
My Coupon Doc (@CouponDoc), presented by co-founders Kishore Eechambadi and Raj Mehra, is focused on lowering Rx costs for patients and improving the distribution of pharma coupons. Redemption rates for paper coupons distributed through physicians are used less than 5 percent of the time. 80% of medications today have a coupon associated with them and can lead to significant savings over the course of a full year, not just for one time purchases. Main users are baby boomers. Focused on integrating in EMRs and patient portals doctors and patients already use, as well as pharmacies. Partnerships with Merge and hello health. Revenue generated from pharmacies, EMR/EHR and pharmaceutical manufacturers. Interestingly, co-founder Raj Mehra insinuated his inspiration for starting My CouponDoc was his exposure to prescription coupons as a child due to his mother’s obsession with them.
The company will charge pharmacies a “small” licensing fee to participate in their program. Raising $650K for marketing, scale up pilots and make key hires. Expectations of 40k visitors/month to the website, which is expected to generate 10k redemptions, but I am skeptical this is the right strategy for growing their business. A destination website is a difficult thing to grow organically these days, not to mention a website that has a 25-percent redemption rate. Also, there was no mention of a mobile app in the business development plan, which seems like a no-brainer in the age of Groupon and the smartphone.
PUSH Wellness (Chicago, IL)
PUSH Wellness (@PUSH_Wellness) is an incentive program that drives meaningful behavior change and improved health through frequent cash incentives tied to verified changes in employee outcomes. The platform allows employers to tie some portion of employees pay to wellness outcomes. As an alternative compensation model, PUSH Wellness pays monthly outcomes-based cash incentives for verified improvements in wellness across five health measures; BMI, blood pressure, cholesterol, smoking status and fitness.
Each employee participating in a PUSH Wellness program is assigned a personalized PUSH score based on the five core health measures. There seems little doubt employers will find this program compelling, especially if PUSH can deliver on improving biometric data for employees in the company era of the accountable care organization. If PUSH can incentivize individuals to be more vigilant in maintaining their own personal wellness by holding them to measurable biometric targets and rewarding them for maintaining and/or improving upon their baseline PUSH score, its reasonable to assume there will be a meaningful impact on the premiums the employer pays insurance companies.
SwipeSense (Evanston, IL)
SwipeSense (@SwipeSense) is “hand hygiene 2.0” and its pair of founders, Mert Iseri (@mhi) and Yuri Malina (@ymalina) basically stole the show from their co-presenters with a great stage presence and a clear connection with their audience. They provide hospital staff with a portable, trackable hand sanitation device that clips to their belt and dispenses alcohol gel with the swipe of a hand, while transmitting usage data wirelessly to our web-based application using a device very similar to the Qualcomm 2Net. This allows both point-of-care sanitation and real-time monitoring of staff hand hygiene compliance rates. Lack of hand sanitation is the biggest driver of hospital-acquired infections, which result in over 100,000 deaths per year as well as $6 billion in additional costs to the healthcare system. The average hospital has a 40-percent hand hygiene compliance rate.
SwipeSense plans to charge hospitals $190K/year to license the devices and replacement alcohol gel cartridges, and they have already lined up some major pilot partnerships with large health systems including NorthShore University HealthSystem and Northwestern Memorial Hospital. With 5,700 hospitals across America this could become a serious business if the company can demonstrate it has the technical chops to match its clearly superior design skills. They are raising $1 million to get their product through the final design phase and complete its pending pilots, which I expect them to have little trouble closing.
Cara Health (Dublin, Ireland)
Cara Health, which entered Healthbox under the name Patient Journey Record (PaJR), is developing a patient-centered technology that improves care management and lowers re-admissions for patients suffering multiple chronic conditions. The Cara Health system is a SaaS-based solution using phone conversations with patient and smart listening technology to predict early deterioration in the health of patients with chronic disease. The system generates real-time alerts prompting care management staff to make appropriate interventions to avery avoidable hospitalizations and emergency room visits.
Cara Health may be addressing the largest potential market of all the presenting companies, as the readmission management/prevention business is set for a huge boom with the impending implementation of the accountable care organization (ACO) as the new standard for reimbursement. The use of machine learning to spot troubling patterns in behavior or complications caused by multiple chronic conditions in elderly patients is something I expect to see many startups address in the next 3-5 years, so Cara Health is very early to the game with a solid team and a very clear strategy. If they can demonstrate even modest improvements in readmission rates for their provider clients it will certainly be evident in the reimbursement rates received from payers when the new ACO model goes live this October. Cara Health is definitely a company to keep an eye on as the health care system pivots and outcomes begin determining which providers will survive the era of Obamacare.
Corengi (Seattle, WA)
Corengi (@Corengi) connects qualified patients with clinical research studies through a comprehensive online platform, reducing costly trial delays for pharmaceutical and medical device companies and increasing the pace of medical innovation. Currently available to Type 2 Diabetes patients, Corengi hopes to quickly scale to several other medical conditions. Core technology will make clinical trial sign-up simple, optimizing the patient experience to make it easy to find studies by clinical specialty and geographic proximity.
I had a chance to sit down with co-founder Ryan Luce, PhD, following his presentation (stay tuned for details of our conversation in subsequent post) and he dove a bit deeper into the company’s vision for disrupting clinical trials than he had the time to get into during his 12-minute presentation. The company calls their core technology a “clinical research matching engine”, which they have designed to function very much like the matching engines used by leading online dating sites. Corengi is led by a team that understands how to conduct research and use the learnings to influence their product design and business development strategy early in the development process, a rare trait in entrepreneurs, most of whom I find tend to rely on trial and error to guide iterative product development strategy.
CareHubs (Beaverton, OR)
CareHubs (@carehubs) provides a HIPAA-compliant, private-label social networking platform built on a unique hub-and-spoke architecture that connects stakeholders across the healthcare landscape, enabling better communication and coordination on critical healthcare issues. Through peer/mentor matching, targeted support, tools and resources, CareHubs offers patients and those concerned with their care an organized environment for true collaboration.
Interestingly, CareHubs explicitly DID NOT ask for investment from their audience, the only of the presenting companies to do so. Supposedly the company is sufficiently profitable already and does not need to take investment. CareHubs also created a unique custom social network for the attendees of the event to use to communicate directly with the investors via their mobile devices during the presentations, which I incidently seemed to use much more than any of the other attendees.
United Preference (Princeton, NJ)
United Preference (@UtdPreference) is attempting to revolutionize wellness incentives with a new currency called Tailored Spend. By issuing individuals prepaid Tailored Spend cards, employers and health plans can tailor their incentive programs to the retailers and products that most effectively drive member engagement and healthy behavior change. The company offers an easy-to-administer single card platform, with features enabling each card to be limited to specific retailers, brands or products.
I interviewed United Preference co-founders Mark and Pamela Hall very early in the Healthbox program when the business was little more than a mature idea, so it was very interesting to see how the vision for the company has evolved during the past three months. I was impressed to hear the company has secured a deal with the City of Chicago to deploy their Tailored Spend card in a pilot program with expectant mothers, a deal which if ultimately proven successful could easily be replicated with large public employers across America. There seems to be a clear business opportunity being addressed by United Preference, but until they begin rolling out their Tailored Spend program and results can be evaluated its difficult to say whether they have found the right formula yet.
SwiftPay MD (Atlanta, GA)
SwiftPay MD (@SwiftPayMD), formerly known as Iconic Data, uses a mobile app and voice recognition technology at the point of care to help physicians capture billions of dollars in lost charges each year and bridge the “EMR digital divide” and instantly deliver billing information to a physician’s home office billing staff. The end result is more revenue and cash flow for the physician’s practice.
SwiftPay MD co-founder David LaBorde is another presenter I interviewed recently. I have been very impressed with his ability to articulate the problem the company is addressing and the use of creative marketing tools, such as this white board video, to explain very simply how their solution works and ultimately improves the physician practice bottom line. As a former neurosurgeon working in an academic medical center, David felt the pain of lost charges and cumbersome patient hand-off protocol first hand, which brings an invaluable perspective and underscores the potential for SwiftPay MD to execute a meaningful solution. The market they are addressing, at $600 million, is a bit smaller than I had anticipated, especially considering they had the largest ask of the presenting companies at $1.2 million.
DermLink (Atherton, CA)
DermLink (@Derm_Link) connects patients and dermatologists via a HIPAA-compliant web application that allows patients with skin conditions to receive fast and accurate remote diagnosis without visiting a dermatologist’s office. This service can be accessed directly by patients or through primary care physician offices and allows dermatologists to increase their productivity and revenue.
I found the DermLink presentation to be very compelling, though the physician market they are addressing is not very large, with only 9,000 dermatologists in the US. I was able to speak with co-founder and CEO Victor Gane briefly at the reception following the presentations where I asked him to elaborate on the company’s strategy for scaling up their service and I was impressed to hear him say they would be zeroing in on pediatrics during early phases of business development because the vast majority of dermatological consults are for pediatric patients. As far as I am concerned the best way to launch any digital health business is by building a product/service that meets an immediate need of the pediatric patient population because the parents of these patients are the most willing of all consumers to invest in early stage, cutting-edge technology for the sake of peace of mind when it comes to the health of their young children.
Healthbox announces new branch in Boston to close the show.
That’s a wrap! See you in #Boston
— Healthbox (@health_box) April 4, 2012
Healthbox Theme Song performed by Jonathan Mann.