Social health management startup Welltok has raised $18.7 million in its second round of funding with a goal of expanding into new markets, hiring new employees, and boosting product development.

Denver-based Welltok’s flagship product is CaféWell, a social health service that rewards participants for living a healthy lifestyle, lets them talk with health experts, and gives insights to employers about their health, interests, and motivations. Welltok is contracted to serve about 10 million consumers using CaféWell and counts two of the five largest health plan organizations in the U.S. as customers.

The new funding was provided by New Enterprise Associates, Emergence Capital Partners, and InterWest Partners. Including the new round, Welltok has raised $26 million.

On top of the new funding, the company has also appointed executive chairman Jeff Margolis as its new CEO. Margolis has been the executive chairman for the past 18 months and previously was the CEO of TriZetto, a healthcare IT business.

“We are addressing the significant challenges consumers face as they try to optimize their own health in partnership with their plans and providers, and have built new support structures that combine the best in purpose-driven social, community, personalization, and gaming technologies,” Margolis said in a statement.

Woman exercising via Maridav/Shutterstock

Advancements in medicine and treatments have increased the life expectancy for baby boomers. Almost 87 million Americans, or one in four, will be 65 or older by 2050, according to the Organization for Economic Cooperation and Development.

Both these trends have many implications for hospitals and healthcare organizations. Over the next decade, the healthcare system will need to adapt to the influx of baby boomers, many of whom will have chronic diseases and need continued care. A recent study by the West Virginia University School of Medicine found that about 39 percent of baby boomers were obese, compared to about 29 percent of the previous generation, and approximately 16 percent had diabetes, compared to 12 percent of the previous generation.

The aging generation of baby boomers had been a concern for the healthcare industry for some years. Now, technology solutions are beginning to serve a vital role in creating the change needed to propel the healthcare industry to care for the influx of patients.

Healthcare technology today 

Technology implementation in healthcare today is mainly driven by government incentives. In 2009, the first electronic health record (EHR) mandates were enacted by the HITECH law and included financial incentives provided by the Health and Human Services Departments.

EHR implementation has taken off over the last few years, with nearly $10 billion in EHR incentives distributed as of December 2012. One of the core reasons hospitals and healthcare providers are adopting EHRs is to improve patient safety. While there are other benefits, such as saving time and cost, the objective of EHRs is to correctly identify patients through the continuum of care, ensuring procedures and check-ups are being recorded, as well as easing medical administration.

In order for that to happen, the EHR solutions need to fit seamlessly into the healthcare practice’s existing software solutions and infrastructure. Barcode technology creates a critical link between the patient and the clinician. If, for instance, a patient is unable to verbally identify himself or his medical problems, a clinician can scan a barcode wristband and have access to that patient’s EHR immediately, which can inform the course of action. The clinician spends less time tracking down patient records, and more time with the patient.

EHR and barcode technology implementation seamlessly links patients and clinicians; however, it is only the beginning for healthcare technology.

Connecting patients, clinicians and data

In an effort to provide the best care while adapting to the influx of baby boomers, hospitals and healthcare organizations are turning to connected health. Connected health is the idea of providing healthcare services remotely, through flexible, at home care. Managing chronic diseases, maintaining health and wellness, or ensuring patients are not readmitted following hospital treatment are all issues that connected health helps to solve. Additionally, with more patients being treated in their homes, we can decrease the amount patients admitted to hospitals.

Connected health can help solve the impending issue of the influx of baby boomers into the healthcare system, and technology is at the center of it, powering interoperability and linking patients to clinicians to their data.  By leveraging technology solutions, healthcare organizations can provide care to patients outside of the typical medical setting, consulting at home, over the phone or via video. In using technology while caring for a patient, clinicians have immediate access to the patient’s medical history, pulled from the hospital IT system, and can direct the course of treatment in real-time.

Connected health also allows clinicians to use mobile devices to deliver care or information to a patient on the spot. This is known as mobile health, or mHealth. By using tablets, mobile printers and other point-of-care solutions, clinicians can take specimen collections, issue medical or dietary information and print prescriptions. In tandem with these activities, clinicians record their course of action, medications administered, patient status and next steps. The collected information is priceless data for hospitals and healthcare organizations. In analyzing this data, new processes or improved efficiencies are discovered; all the while elevating the quality of care a patient receives.

What to expect in the future 

As connected health begins to take off, the Internet of Things (IoT) will play a larger role in healthcare information technology. Based on the definition shared in the survey “Building Value from Visibility: 2012 Enterprise Internet of Things Adoption Outlook,” 85 percent of organizations surveyed agree that Internet of Things solutions are made up of smart interconnected devices that provide more visibility into the organization’s operational events.

For healthcare, this means better visibility inside hospitals and healthcare organizations, as well as outside the typical medical setting and in the home. More importantly, IoT can provide more visibility into a patient’s status.

As seen at this year’s Consumer Electronics Show, broader IoT adoption is in full swing. In fact, 53 percent of organizations are planning to implement an IoT solution in the next 24 months, according to “Building Value from Visibility.” The healthcare industry has an even more aggressive adoption rate, with almost 60% of healthcare organizations planning to implement IoT solutions within the next two years. The gained benefits from IoT adoption that healthcare respondents noted include improved delivery process (72 percent), improved safety (66 percent), supply chain visibility (63 percent) and loss prevention (63 percent).

There are already startups developing IoT solutions for healthcare organizations specific to certain areas of inventory management and patient check-in. In the future, IoT has the ability to elevate healthcare even more, and specifically, connected health practices. Patient wristbands, medical equipment and beds encoded with sensors can track status in real-time and make hospital workflow processes more efficient. Health monitors, sensors and RFID technology at one’s home can transfer data to the hospital every minute. Hospitals and healthcare organizations will be able to consistently monitor and provide care, even if clinicians are not working with a patient in-person.

We have the opportunity to change the healthcare industry and evolve with the aging population. With the right solutions and infrastructure, technology can deliver on one of the healthcare industry’s biggest goals: providing the best care possible and creating a safe environment for patients.

Alicia Torres is the healthcare global practice leader for Zebra Technologies Corporation, a recognized global leader in technologies that extend real-time visibility into business operations. At Zebra, Alicia is responsible for expanding the global healthcare market with new and existing solutions for customers. 

Alicia has over 25 years of experience in the healthcare industry, with positions including a hospital financial executive, an internal strategy consultant for a large, public healthcare company and a successful entrepreneur. In 1997, she founded Rosebud Solutions, a healthcare software firm that offered five software programs to address various areas of operations within hospitals. Prior to founding Rosebud Solutions, Alicia was the director of the health economics group at Kinetic Concepts Inc., whose products provide wound healing therapies and technologies. Alicia earned a bachelor’s degree in business administration from the University of Texas at Pan. For more information please visit www.zebra.com.

photo credit: The Community Foundation of Herkimer & Oneida Cos. via photopin cc

This is the latest in a series of VentureBeat stories about startup culture. This week, our reporter spent time with ZocDoc in New York, a stark contrast to several San Francisco startups we’ve covered.

New York City health startup ZocDoc is best known for helping Americans easily book doctor appointments online. That simple premise helps attract more than 2.5 million unique visitors to ZocDoc’s web and mobile apps each month.

ZocDoc’s appointment booking service (and extras like online check-in) is in more than 35 major metropolitan areas, and it covers 40 percent of the U.S. population. It doesn’t reveal its number of bookings or the number of doctors using the service, but a cursory look at listings in cities like Chicago or Boston shows hundreds of medical professionals, who each pay $300 a month to use ZocDoc.

But there’s a lot more happening inside ZocDoc that’s helping the company push forward. ZocDoc promotes a specific culture to attract the best employees and enable those workers to do their jobs effectively.

In the picture below, you can see the seven values ZocDoc focuses on promoting: “patients first, great people, speak up, own it, us before me, work hard, make work fun.”

“Health care is the biggest problem facing our generation,” CEO and founder Cyrus Massoumi told me. “To change that is very ambitious. … To accomplish it, we try to have ‘humble ambition’ or ‘hum-bition.’ And that permeates everything we do.”

After touring the office and talking with several ZocDoc employees, including Massoumi, I noticed a few ways that ZocDoc is creatively approaching problems like growing pains and subordinate employees. Here’s what I took away from the visit.

Source: Sean Ludwig/VentureBeat

The values ZocDoc emphasizes.

Great people

Recruiting has become one of ZocDoc’s the most pressing issues. ZocDoc has more than 400 employees in offices in New York, Phoenix, and India, and it plans to keep hiring like crazy to keep on growing. On top of revenue ZocDoc generates from its customers (doctors), it’s also tapping the $95 million in funding it has raised from DST Global, Goldman Sachs, Khosla Ventures, and others to keep the engines pumping. Its newest office is in the Phoenix area and the company claims it will hire more than 60 more people for that office alone before the end of 2013.

ZocDoc’s space in New York has gotten crowded enough that employees are now flooding over into the fourth floor of its SoHo-based building. (It also shares that building with other major NYC startups Foursquare and Thrillist.)

“We’ve been in the same space for three years, and we started out with a quarter of this floor,” Karsten Vagner, ZocDoc’s director of people and its third employee, told me.

A hallway in the New York ZocDoc office contains a row of seven rooms, all dedicated for interviewing new employees in person, by phone, or via Skype. When I viewed the office, the rooms were nearly empty, but multiple employees said that was unusual and on the majority of weekdays applicants fill most or all of the rooms.

Massoumi says he chiefly looks for people that will care about fostering the community of his workers, and he’s willing to look anywhere for these employees.

He uses a story to show how serious is about this. Early in ZocDoc’s history — about three years ago — he was visiting Chicago for business. At a pizza restaurant, Massoumi liked the waitress that was helping his group so much that he asked her to interview with ZocDoc. Massoumi said that she put customers first and dealt with their problems more effectively than most waitresses he’d ever seen, so he had to see if she’d come work for the company as its office manager.

“We hire for intrinsics over experience,” Massoumi said. “We need them to share our values more than anything else. … Every employee we have is better than the average employee.”

She is still ZocDoc’s office manager in New York.

Source: Sean Ludwig/VentureBeat

Mike from Monsters Inc. with a ZocDoc hat.

Speak up

Clearly, ZocDoc is trying hard to recruit and fill a lot of key roles. But to get those employees on board, Massoumi believes you have to give those recruits an unusual incentive: the freedom to tell bosses — sometimes loudly — that they are wrong.

“If you want the best people, you have empower them to speak their minds,” Massoumi said. “You can speak your mind here without your job being in jeopardy.”

The call to “speak up” is so prominent that people are criticized if they ever admit later to thinking another approach would have been better but did not say anything.

“Part of your job is to say what’s wrong,” Vagner said. “I don’t want people on my team who just nod along.”

Additionally, employees are able to book time with Massoumi to discuss issues or ideas. That’s made his schedule a bit hellish (it took more than two weeks for me to get him on the phone), but he cares about his employees’ thoughts enough that he’d rather be busy than not have the time to talk to them. “Office hours” sessions vary between 15 minutes up to two hours.

Massoumi also has an initiative to do lunch once a week with the newest New York employees. “I need to know every member of my team,” Massoumi said.

Staying lean

While employees speak their minds about things, something that they don’t question is the operation’s leanness. Even with the $95 million in funding, the company still acts like an early-stage startup.

ZocDoc makes employees share hotel rooms, pushes the boundaries of its office spaces, and only buys used furniture.

Massoumi illustrates this by telling me about the chair he has for guests in his office. The chair’s nickname is “Bouncy” and has a broken piece that makes it sink when people sit down in it.

“It’s been broken for four years,” Massoumi said. “It used to surprise people, but I think they’ve come to appreciate it.”

Source: Sean Ludwig/VentureBeat

Diet Coke cans stacked in a hallway.

Soda love

Outside of pushing values, another thing that seems to be helping fuel ZocDoc’s growth is the staff’s love of soda. Like many startups, caffeine helps drive employees who work long hours, but there seems to be a special affinity for the stuff; it’s a guilty pleasure among employees driven to make other people’s lives more healthy.

While water and coffee are the most popular employee drinks, the office is also well stocked on soda. When I toured the office, empty Diet Coke cans were stacked at the end of one hallway. I found it humorous that one of the most prominent health-tech startups consumes so much soda, and I pointed that out to Massoumi. (Admittedly, I’m a soda addict myself, so I wasn’t trying to judge.)

“We’re a health startup, I know, and we do our best to reflect a healthy lifestyle,” Massoumi said. “We do have one member of our exec team who drinks a lot of Diet Coke, but I haven’t had a drink of soda in 10 years.”

The company also offers beer and wine to employees on Fridays.

‘Unlimited vacation’

Finally, the last thing I took away from speaking with ZocDoc employees was the sense that they could actually take time off without getting a hard time from management. Startups have such a fierce mentality that taking time off can be a negative — and taking too much time off could get you fired.

“I think unlimited vacation is unusual, but it’s also valuable,” Massoumi said. “It taps into ownership. It’s our job at ZocDoc to improve health care in America, and our people understand that.”

ZocDoc head of communications Allison Braley took two-and-a-half week break in Sri Lanka when she started, senior PR manager Jessica Aptman just took a 10-day vacation to Taiwan, and Vagner said he recently took a two-week vacation to Fiji.

“I worked a lot to make sure everything was covered,” Vagner said. “There’s a clear expectation that you do your job and do it well. We believe taking time off doesn’t have to interfere with that.”

Check out more photos of ZocDoc’s office below.

All photos by Sean Ludwig/VentureBeat

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Health care software and cloud solutions company Recondo Technology has received a $20 million investment from Bregal Sagemount to accelerate its growth in the booming medical sector.

Greenwood Village, Co.-based Recondo Technology provides all kinds of software and services, including payments, insurance verification, and revenue recovery, to more than 450 U.S. hospitals. During its fiscal year 2012, the company claimed to increase revenue by 94 percent.

“This investment will be used to significantly expand our sales and marketing efforts, take client service to a new level, and broaden our product offerings through internal development and strategic merger and acquisition (M&A) opportunities,” Recondo CEO Rick Adam said in a statement.

Phil Yates, a founding partner of Bregal Sagemount, and Pavan Tripathi, a senior associate, will join the Recondo’s board of directors.

Hospital reception via Monkey Business Images/Shutterstock

“They must believe in us if they’re willing to spend money on frequent cross-country flights for meetings,” laughs Albert Santalo, CEO and founder of CareCloud in an interview with VentureBeat.

CareCloud creates apps that help medical professionals run their businesses. Those apps include a community collaboration and communication platform to securely share patient information, a medical practice management system for billing and scheduling as well as a revenue cycle management app. Soon CareCloud will provide electronic medical records.

With the new funding, CareCloud will focus on producing more technology to serve the needs of healthcare providers.

“This industry is one that tends to lag behind the general tech industry,” says Santalo. “We believe a big part of what we have to do is continue innovating. To do this we will increase our geographic footprint and expand our sales and marketing teams.”

There are currently 85 employees at CareCloud, but Santalo says he plans on having more than 100 by the end of 2011.

CareCloud, which launched in 2010, is exceeding $500 million in accounts receivables under management for physicians and healthcare providers.

“The cloud is the place where all of the people in healthcare are playing a roll,” says Santalo. “We use it to connect all of the different players. Healthcare at is core is a social industry, but there’s wasn’t a good infrastructure to connect everyone.”

Santalo believes one of the reasons Google Health was shut down this year is that it didn’t strive to be social.

“It’s difficult to build a consumer-side platform and swim upstream,” he says. “The platform has to be built by the people providing the care. Also, it’s hard for a company like Google or Microsoft to be so many things. Healthcare requires a company that doesn’t care about anything else that’s going on.”

CareCloud has received multiple awards in the last year, including being named a winner at IBM’s SmartCamp Silicon Valley and a runner-up at the IBM SmartCamp World Finals in 2010. It was at the SmartCamp competitions that CareCloud connected with Norwest Venture Partners and Intel Capital.

“The funding environment is interesting now,” says Santalo. “You read that investment dollars are flowing, but only the best companies and entrepreneurs are the ones getting funding these days.”

“After I sold in 1999, a lot of the health VCs closed their health IT practices,” says Kean. He says that until recently the climate for health technology had been cold. Kean says he’s figured out how to monitize health tech and cut through red tape, quickly.

Kean describes WellnessFX as the Mint.com of health. WellnessFX aims to organize and educate people’s health the way Mint.com organizes their finances. Kean is taking advantage of how affordable sophisticated diagnostic tests have become. He believes the new chapter in healthcare is based on preventative medicine.

Kean says he hopes to “wake up a really sleepy market with actionable things,” like lifestyle changes, better nutrition or in some cases a drug. He wants to remove barriers to preventative health tests and screening. To do this, WellnessFX is supported by a virtual practitioner team using social media tools and a consumer web user experience. The approach is based on results of clinical studies showing that individuals provided with frequent, understandable and measurable results that inform their daily actions can significantly improve their health outcomes.

“There’s an ecosystem of companies that exist because of some ancient law,” he says of the healthcare industry. “Knowing how to negotiate that ecosystem is essential.”

WellnessFX currently has 13 employees and has raised $1.85 million from Voyager Capital (Curtis Feeny), Floodgate (Mike Maples) and a handful of angels. The company is working on a new round of fundraising after a summer of tech upgrades and feedback from testers. It had to be in stealth while it became compliant with the Health Insurance Portability and Accountability Act (HIPAA), a 1996 Federal law that restricts access to individuals’ private medical information. This may sound like a hassle, but Kean says it’s nothing compared to the challenges facing another health tech startup he founded that failed. That company provided bedside interactive video for patients.

“You don’t want to go after something that has a 24-month billing cycle,” he says with a bit of a chuckle. “We were targeting inner-cities and that was a mistake. One, they didn’t have money. Two, we thought it would take six months for billing, but it turns out there are 12 different decision makers and we had to make 12 unique sales. Once the CTO got those decisions it was an average of a 16 month close. That has stuck with me ever since.”

Kean believes that in the next few years everyone will quantify and manage their health online.

“Facebook and Twitter are dangerous for doctors, but everyone wants to take part in social networking,” says HealthTap CEO and founder Ron Gutman, referring to the perils of patient confidentiality and lawsuits for giving wrong advice. Social and medicine haven’t boded well under the shared banner of technology, but Gutman is creating a social environment that works for doctors and patients.

Today HealthTap is launching a mobile app (free) called HealthTap Express that lets users ask any health question and get immediate answers from more than 5,000 doctors for free. This isn’t Yahoo Answers or Quora. Questions asked on HealthTap are always answered by a professional held accountable for their answers, which can be reviewed by peers. These are real, North American-based doctors with licenses and contact information.

Getting these doctors to become part of a social network was no small task. HealthTap began 20 weeks ago (Gutman refers to the time in “weeks,” similar to the way a new parent refers to the age of their child)  as a network for OB/GYNs and pregnant women. This was a smart vertical to tackle first; as many doctors in this field are some of the industry’s most vocal about preventative medicine, patient rights and universal healthcare. Word spread of the network, like it does for all successful social networks, and today HealthTap’s app has grown to incorporate 82 healthcare fields. The app is available for iOS and Android, smartphones and tablets.

To help encourage doctors and patients to participate in the network, the app uses gamification elements. Doctors are able to showcase their specialties in a way that cannot be expressed on review sites like Yelp. They are able to show how much they know and lend a bit of their own voice and style to their profiles and answers. They get points and higher visibility the more helpful they are. There’s the potential for doctors to connect with new patients locally and grow their practice.

Meanwhile, HealthTap patients get free answers to medical questions and can then make the most of doctor-visits. There’s no time wasted, neither the patient’s nor the doctor’s, on general questions. Patients can spend their face-to-face time getting to the root of their medical issues. They can also learn when they can skip a visit or absolutely need to see a doctor. That goes for some of the most embarrassing health questions, too.

“My teenage daughter suggested I start reaching out to teenagers on MySpace,” says Dr. Jeff Livingston who runs MacArthur OB/GYN in Irving, Texas. He was one of the first physicians in the HealthTap network, but has experimented with social media as a way to help people for more than a decade.

“We created a page and suddenly kids started asking questions they were embarrassed about asking in person,” says Livingston. “I think we are in the beginning of the social media revolution. It’s not the technology that’s important. It’s patient engagement. You don’t just go online to read something. You go on to interact; to have a dialogue. Doctors are trying to figure out their social media presence, but we haven’t yet connected the dots.”

Connecting the dots between health and tech hasn’t been easy. This year search and social network giant Google shut down its health records project called Google Health. Social networks for health have struggled to gain acceptance or have failed all together. For example, Trusera shut down in 2009, a year after it go started. Its problem was lack of funding and the shaky foundation of peer-to-peer medical advice (not expert).

Healthcare accounts for almost 1/5 of the United States’ GDP and has been troubled and regulated to the extent that only the most experienced entrepreneurs can cut through the thicket. The cost to entering the industry has been to high, but the potential rewards are higher.

Angel investors are getting more interested in health tech. Esther Dyson, a renowned angel investor, is backing HealthTap. She has also invested in 23andMe and Medstory (sold to Microsoft). Venture capitalists are also starting to invest in health tech, i.e. not just health companies or tech companies.

“We’ve invested in both healthcare and technology and done very well,” says Patrick Chung, a partner at venture capital firm NEA. “But there wasn’t a melding. There was a healthcare investment team and an IT investment team. In the last two to three years we’ve been seeing exciting hybrids of the two.”

Chung says entrepreneurs are now “casting their eyes to the giant, ailing patient of healthcare” and points to companies like 23andMe that have successfully navigated healthcare regulation and carved a path for information that can be acted upon. Lots of smart people are jumping on this bandwagon.

“All good venture capitalists should follow the talent,” says Chung. “The most promising entrepreneurs had not yet gotten into this space. There weren’t a lot of health IT startups period. But now some of the most promising, high-energy entrepreneurs are getting into it.”

Founded this year, OMyMeds has raised $100,000 and is composed of three founders: Dr. Eugene Spiritus, who has served for the last 12 years as Chief Medical Officer for UCI Medical Center; Dr. Dan Ross who also manages a consulting firm for hospital and health system safety and operations; and Onne Ganel who leads the medical device practice at Locust Walk Partners, a life sciences focused sales-side investment banking firm.

“We are the only company that does not require people to manually enter their medications and then manually update them on a constant basis,” says Ganel in a VentureBeat interview. The platform reads the medication data directly from a patient’s insurance company record or pharmacy record.

Based in Orange County, Calif., OMyMeds started out when Spiritus became frustrated with the medication management of his ailing mother. She had heart failure, diabetes and emphysema and took 12 different medications daily, with three to four additional drugs on an as-needed basis. He displayed a medicine cabinet on stage, full of her medications with little sticky notes reminder her when to take them.

“She tried to manage this complicated regimen with sticky notes, hand written lists and pillboxes,” says Spiritus. “She had a vague idea about each medication, but invariably she’d forget to take her meds or, worse, she would take the same medicine twice. She had many physicians, including a cardiologist, pulmonologist, endocrinologist and internist. At various times, my sisters, wife and several home health aides were also involved with her care. Sadly, no one was ever 100% sure exactly what she was taking.”

Spiritus came up with the idea of designing a calendar and info medication card that would help others manage medication with minimal manual updating.

Competitors include Vaica USA, Medminder, MedActionPlan and Healthonemed (Pillphone, Pillboxer and Pilltaker). OMyMeds differentiates itself by marketing the platform directly to insurance companies and pharmacies, not consumers. The platform will convert the medication lists in the individual databases of enrollees into a set of user friendly tools such as a daily schedule for medications with images and a “cheat sheet” with pertinent information.

“We have enthusiastic focus group participants and interested potential investors,” says Ganel.

OMyMeds is one of 80 companies chosen by VentureBeat to launch at the DEMO Fall 2011 event taking place this week in Silicon Valley. After our selection, the companies pay a fee to present. Our coverage of them remains objective.

Photo:  OMyMeds founder Dr. Eugene Spiritus onstage at Demo Fall 2011. Photo courtesy Demo Conference/Flickr.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

A technology originally invented for scanning the inside of your mouth might lead to better-fitting earbuds and hearing aids, thanks to Lantos, which just announced a new chief executive, Jeffrey C. Leathe, along with a $4.1 million second round of funding.

Traditionally, if you need an image of your ear canal a doctor pours silicon gel into your ear, which expands and hardens to create a model of your inner ear. The process is uncomfortable, cannot safely reach the entire length of the canal, and can sometimes be inaccurate. (Not to mention that it might make you think disturbing thoughts of the Star Trek Wrath of Kahn ear-eel scene.) Lantos’ product, however, minimizes the invasive nature of ear-mapping.

Lantos’ 3D scanner is like putting a thin pencil in your ear, according to new chief executive and chairman of the board, Jeffrey Leathe. The probe has a “sophisticated balloon,” or membrane, at the end that can be inflated and then safely travels all the way down the ear canal. A liquid travels along the membrane and allows a camera, aided by a light at the end of the probe, to record thousands of data points along the canal. This forms the 3D image, without much disturbance to the patient.

The idea was born in the MIT lab of Doug Hart, who created 3D oral scanning technology later bought by 3M. This technology also replaced a molded impression technique, but for teeth. Now Leathe has been brought on board to lead the ear-focused technology down the path of testing for not one, but three markets: audiology (hearing aids), military and consumer use.

“We are just entering clinical trials, our major clinical trial will be held with the U.S. Army,” Leathe told VentureBeat in an interview.

The military has shown significant interest in this technology, according to Leathe, particularly for hearing protection and two way communications devices. Leathe was limited in what he could discuss surrounding the products themselves. He did mention, however, current impression-taking technology doesn’t make for a comfortable fitting device. Thus, some soldiers opt to not wear protective ear pieces, so as not to hinder their performance. If that practice is widespread, it’s no wonder the military is reaching out for a better way to protect its soldiers.

Other studies will be done in audiologists’ private practices and institutions for hearing aid development, along with a branch in the consumer direction.

“We’ve been taking to a lot of folks in the consumer industry, but it’s early,” said Leathe.

Currently, a few companies, such as Etymotics , will make a personal set of earbuds for your headphones, but it’s pricey. This is where Lantos would step in with a more accurate picture of your ear and subsequent ear bud.

“[Look at] Dr. Dre. That’s $300 for a pair of Dr. Dre headphones,” said Leathe. “People are willing to pay a large amount of money for better audio quality.”

Lantos will be using its funding to move the device out of prototype stage and into production next year. The device will officially be launched at the AAA conference, an audiology event based in Boston, in mid-2012.

The company is headquartered near Boston in Cambridge, Mass. and was founded in 2010. Lantos has 9 employees strong and has raised $5.7 million total in venture funding to date. Investors include Excel Venture Management, Catalyst Health Ventures, and Mass Medical Angels.

[Image via hkannn/Shutterstock]