When people run into major problems with the health industry — trying to get money from insurance companies or to get access to an experimental drug, for example — they’re no longer just turning to lawyers. Increasingly, they’re turning to online petitions.

One petition website, Change.org, has already seen over 7,000 health-related petitions come through — with some big successes.

Chief executive Ben Rattray, who is speaking at VentureBeat’s HealthBeat conference next week in San Francisco, explained that that he has seen people successfully take on big-name organizations like the USDA and insurance providers — and those successes inspire him. Indeed, healthcare companies are often quite inaccessible despite the fact that they’re involved in such a sensitive and critical aspect of life.

Change.org isn’t focused exlusively on healthcare or health tech. The company helps people petition specific leaders on any issue. But health-related issues have quickly become one of the most popular topics on the site.

We chatted with Rattray to see just where his company fits into the healthcare conversation:

VentureBeat: What role does Change.org feel it plays in grassroots health activism?

Ben Rattray: Our role is to empower people everywhere to create the change they want to see. We’re an open platform and therefore don’t advocate for campaigns ourselves, but we are a place where parents and siblings and friends who haven’t been able to make their voices heard are starting petitions on behalf of their suffering loved ones. We think people deserve to be part of the decisions being made that affect their lives, so we’ve created a tool that gives them a voice in that conversation.

VentureBeat: How many campaigns has Change.org hosted and what kinds have you seen?

Rattray: More than 7,000 people have started health-related petitions on Change.org, covering every health topic imaginable. One of the most popular topics is around medical coverage from major insurers. For example, last year a young man from DC named Jason Warren successfully petitioned Blue Cross Blue Shield to cover his father’s recovery from a heart attack after gathering 190,000 signatures — a shift we have seen many insurers make in response to petitions. Another popular topic is healthy food; in one campaign last year, Bettina Siegel, a mom in Texas, successfully petitioned the USDA to stop packing “pink slime” in school lunches in just one week with more than 250,000 signatures –  after health advocates had been working on the issue for 10 years.

VentureBeat: Why is this, in today’s digital age, more powerful than picking up the phone and talking to your representative?

Rattray: There’s still value in many types of civic action, including picking up the phone. But on a phone call, you’re just one person with an opinion. On a petition, you’re a member of a collective movement, and your voice is shared publicly for everyone to see. Even if they want to, there’s no way a government official or company can ignore your comment – it’s like a highly visible time capsule of public sentiment.

Take Jenn McNary, the mother of two boys with a rare, lethal disease, Duchenne Muscular Dystrophy. One of her boys had access to a medical trial for a new drug, and his condition improved dramatically. Her other boy doesn’t have the trial drug, and his muscles are deteriorating rapidly. Soon, he’ll lose all upper body strength, and he won’t be able to eat or drink on his own.

Jenn’s petition asks the FDA to approve the medication through the Accelerated Approval Program, which expedites approval of drugs that treat serious diseases. Jenn could have picked up the phone – and trust me, she has, many, many times. But it was her petition, with its 179,000 signatures, many from parents of other DMD-afflicted kids, that got her a meeting with senior FDA officials. Jenn just sent us an email a few weeks ago saying they were “extremely supportive, engaging, and receptive” to her ideas – so things are looking up. That’s the power of the Change.org platform.

VentureBeat: Do you believe Change.org is really making a difference? Can you point to any successful campaigns?

Rattray: We’ve seen hundreds of health-related victories. The 28-year-old UC Davis student whose radiation treatment was finally covered by Anthem after four long weeks of appeals. The 21-year-old severely disabled student who got Medicare to continue her nursing care through the end of college, when she could move back home for support from her family. The Ohio woman who got Governor Kasich to add autism benefits to the state’s essential health benefits package. The list goes on and on. The question of whether petitions can have an impact is by now clearly answered – they can and do every day.

VentureBeat: Do you see spikes in health petitions around current events?

Rattray: We may see a small spike around, say, the Affordable Care Act — people who want it passed, people who don’t want it passed — but in general, it’s pretty consistent. That’s because our platform is really built for micro-movements: small, personal petitions replicated hundreds or thousands of times over across cities, states, even countries. At Change.org, we deeply believe in the power of starting local and building movements from the ground up instead of jumping on huge national problems and trying to tackle them from the top down.

VentureBeat: What role can social media sites play in health activism? Are they too unorganized to make a real difference?

Rattray: Social media sites can play a crucial role in raising awareness about health issues. Where they sometimes fall short, though, is translating that awareness into effective, coordinated action. That’s where Change.org comes in; because our platform is built explicitly to make changing the world intuitive and easy, it’s generally more effective than social media sites not structured for that purpose.

VentureBeat: Why should people use Change.org for health-related issues over creating a White House petition online?

Rattray: We’re big fans of the folks working on We the People, the White House’s petition platform. Over the past few months, we’ve actually worked with them on building out their API.

The Change.org platform is unique not only because it lets anyone start a petition about anything they care about, but also because people can target whichever decision maker has the power to do something. If the issue is political, sometimes that’s the Obama administration, but more often than not, it’s the director of a smaller government agency or the head of a specific task force. For non-political issues — say, an insurance provider who won’t cover a loved one’s medical treatment — you can use Change.org to petition the right people there, too. And it works — thousands of people have won their petitions using our site.

VentureBeat: If you could ask tech companies for any one thing to help Change.org health petitions get more attention, what would it be?

Rattray: Send us your engineers — we’re hiring.

Ben Rattray photo via Chrissy Farr/VentureBeat

If you’ve been waiting for the day when robot doctors will cut you open, monitor you recovery, and keep you company in your hospital room, you won’t have to wait much longer.

“We’re in the first inning of a nine-inning exercise. The average patient walks in a hospital and is not touched by robotics. That’s going to change in 10 years,” said John Simon, a partner at Boston-based investment firm Sigma Prime Ventures.

That adoption rate, Simon argues, is based on cost: As the price of robotics adoption decreases, hospitals may be more likely to invest in new technology. At their core, robots aren’t all that different from any other hospital gear.

The problem for hospitals, however, is that there’s a danger in pursuing robotics too far. “With medical robots,  if you automate something too much, people won’t accept it,” Simon said.

This results in a fine line that hospitals and doctors must manage. While some automation and robotics is good, the last thing a hospital wants to do is embrace robots to such an extent that they alienate patients.

Little of that, however, is on the minds of hospitals today. Right now, most of them are just trying to figure out how to get robots in the front door. Here are a few ways robots are changing hospitals today.

Zapping germs and cutting infection rates

In hospitals, fewer things are more lethal than the average bacterium. Approximately 1.7 million people get sick each year as a result of so-called “health care-associated infections,” and 99,000 of them die. So you might say that tackling this issue is a major problem for hospitals.

One potential fix is Xenex, a 5-foot, 2-inch robot that fights bacteria by flashing hospital rooms with ultraviolet light. This light, which comes from a Xenon bulb, damages the cell walls of bacteria, frying their DNA and preventing them from reproducing. (The light is so powerful that even humans have to leave the room while the Xenex is working its magic.)

While Xenex has only been around since 2009, evidence suggests that it’s working pretty well so far. Cone Health System, a health care provider in North Carolina, says that Healthcare-Associated Infections dropped over 40 percent after it started using Xenex. Another hospital, Massachusetts’s Cooley Dickinson Hospital, says that Xenex’s helped cut rates of infection of Clostridium difficile by 82 percent, according to a Xenex case study.

Keeping doctors present … even when they aren’t

Fewer companies are as well known in the robotics world as iRobot, the creator of the Roomba vacuum cleaner. But while iRobot is dominating the consumer space, it’s also doing some interesting things areas like defense, naval exploration  and, in particular, health care.

Among its health care products is Remote Presence Virtual + Independent Telemedicine Assistant (RP-VITA), a tablet-controlled telepresence bot it developed alongside InTouch Health. Unveiled last July, the RP-VITA lets doctors care for patients remotely, allowing them consult with patients even when they’re miles away.

Reception to the idea has been pretty strong so far. Not only has the device been commercially deployed in seven American hospitals but the RP-VITA is also the first telemedicine robot approved by the U.S. Food and Drug Administration. Telemedicine is officially a thing.

Letting amputees walk again

While some robots are mostly about improving patients’  in-hospital experiences, device’s like the BiOM prosthetic ankle system are improving their whole lives. Developed by Boston-based robotics firm iWalk, the BiOM solves one of the less-advertised problems with conventional prosthetics: They’re exhausting to use.

“When people wear prosthetics, they are providing all the power themselves and sort of dragging this leg around,” notes Sigma Prime’s John Simon, whose firm invests in iWalk.

The problem is one of angles. When we walk up ramps or take stairs, our ankles rarely stay at one angle — but that’s exactly how most prosthetics force wearers to walk around. This is why the BiOM is so effective: Instead of forcing the wearer to power it with their own bodies, it powers itself. And that makes a huge difference.

The only problem with the BiOM is cost: The device runs for $50,000. And while that’s not cheap, it’s a small price to pay for amputees looking to walk around freely again.

Helping doctors cut you open

If you’re a surgeon operating today, it’s hard not to be at least a bit enticed by robotic surgery. Surgical robots promise the capability to operate on patients quickly, accurately, and with fewer of the side-effects associated with traditional surgery. By creating smaller incisions, robotic surgery (which is mostly just robot-assisted surgery at this point) cuts blood loss and reduces recovery time (which means patients leave hospitals earlier). Adding to the intrigue is the possibility of remote surgery, which enables doctors to operate on patient from halfway across the world.

The interest is real: Market leader Intuitive Surgical, which creates the da Vinci surgical robot, says its product was used in 450,000 procedures last year.

The problem is that robotic surgery systems are really expensive.  Systems like the da Vinci cost at least $1.5 million, and for a lot of hospitals, it’s tough to justify that sort of investment. More, robotic surgery systems carry with them significant liabilities, as Intuitive Robotics found out earlier this year. In February, the FDA launched a probe into claims that the Da Vinci was causing post-operation complications for patients. Intuitive surgical maintains that adverse event rates are low, but the debate over the company’s products is ongoing.

Still, in spite of this recent skepticism, robotic surgery remains a popular option for procedures like prostate cancer extraction, which, due to the, er, difficulty of access, is often better left to robot hands than those of humans.

Keeping patients and the elderly company

If all of this talk about amputees, bacteria, and botched operations has got you down, I offer the Paro, a well-known therapeutics robot developed by Japanese research company AIST. Paro has a very simple but very important job: It’s supposed to feel like a pet. Similar to the that ancient tabby that your grandmother’s nursing home keeps around, Paro relaxes patients in ways that other humans can’t. Aist, which was developed over 10 years ago, still remains one of the most well-known robots of its kind.

Healthfundr is an equity-based crowdfunding platform for health startups. The site provides accredited investors with opportunities to invest in a selection of curated companies working on digital health, health IT, and diagnostic and medical devices.

The JOBS Act and the Affordable Care Act are dramatically changing regulations surrounding crowdfunding and healthcare. Crowdfunding has changed the venture capital landscape and startups in all sectors are using this method to raise  funding. The landscape for health investment is also changing. Funding soared for health IT and digital health companies in 2012, while money continued to lag for life sciences and medical device companies.

CEO Jared Iverson is a former securities attorney with experience working for a pharmaceutical company. He founded Healthfundr in response to shifts he observed in both industries.

“The company is rooted in a desire to see more innovation and capital around health and medical innovation,” he said in an interview with VentureBeat. “A lot of capital goes to areas that are easier to understand or have less regulation, and I’d love to see this sector become more mainstream. This is an area that has a huge impact on quality of life.”

Healthfundr is only open to accredited investors. As of today’s launch, it features three vetted companies that are looking to raise capital. Unlike other equity-based crowdfunding sites like TheFundersClub or CircleUp, Healthfundr works with later stage companies that already have traction and are looking to raise larger amounts. Iverson said there is no shortage of seed funding or later stage capital for health companies, but many struggle to receive first rounds of institutional funding. Healthfundr is meant to be a place where companies that have traction in the market can raise growth capital of a few million dollars.

“Health startups often have to overcome regulatory hurdles and require a higher degree of sophistication and more capital from investors,” said Iverson. “One of the unique difficulties is getting investors to follow-on. We want to fill this hole by being selective about the companies we choose so investors feel more confident in their ability to carry out due diligence.”

Healthfundr is a registered broker-dealer and will take a small portion of the capital raise, either in the form of equity or cash compensation. Iverson’s ultimate goal is to become the main hub for health and medical technology deals and drive funding and interest into this space.

This is a guest post by Chris Crowell, president and CEO of Enterasys.

The rate at which doctors are choosing to bring mobile devices to work continues to rise at an alarming rate. In fact, a recent study from Jackson & Coker found that four out of five physicians regularly use their mobile devices for medical purposes.

At the same time, patients and guests are also increasing their use of personal wireless devices in hospitals and healthcare facilities. While there are proven benefits in these situations, such as quicker access to patient records, the influx of devices also has some serious drawbacks.

Most often, those looking at the negatives are quick to point out patient privacy issues and the fact that patient information could be jeopardized. But a host of other concerns are also associated with this movement, such as the enormous burden it puts on the network and IT resources.

To help alleviate the side effects from the transition to mobile, hospital IT organizations across the globe are beginning to deploy bring-your-own-device (BYOD) strategies. In order to provide the flexible resources required to manage a comprehensive BYOD strategy that maintains costs, control, and security, IT must be prepared to face the following five issues head on.

Network support

A recent report from Spyglass Consulting Group found that 69 percent of surveyed hospital nurses use smartphones for personal and clinical communications while on the job. That, added to the statistic above about physicians, equals a huge strain on the hospital’s network.

With the influx of end-user devices accessing the hospital network comes the demand for consistent, reliable, and continuously available connectivity, especially on the hospital wireless LAN. Federal standards call for institutions to deploy a single network to handle the needs of the medical devices as well as provide a standard of interoperability for securing all data on the clinical wireless LAN. Moving forward, hospital IT professionals must explore next-generation networking solutions that are highly available, scalable, and ubiquitous.

Lost devices

If you work for a company where you’re given a mobile device, the assumption is that IT bears the responsibility for the tracking and replacement of those that go missing. Healthcare organizations must rethink this traditional model as more devices brought into the workplace are personally, not company, owned.

Mobile device management (MDM) of personal devices is something that has historically kept health IT professionals up, yet most are only doing the bare minimum at best to control it. There must be a balance in strategy that takes into account the need to be noninvasive, yet law abiding. When dealing with patient information, anything that contains data covered by HIPAA needs to be secured, and those devices need to be able to be wiped clean.

Mixing personal and professional use of mobile devices

In the near future, mobile computing devices in clinical environments will be just as common as they are in real life. Those devices will serve a dual purpose, as doctors and other professionals use the same mobile phone to call/text home as they do to access patient information.

We’re already hearing concerns from clinicians about BYOD around the loss of privacy for personal communications, the idea that personal devices may compromise professional behavior, and the concern that procedures may not be clear around professional vs. personal use on personal devices. BYOD in this environment requires a shift in culture that revolves around transparency. Without it, policy-makers and users will butt heads and neither side will achieve what they’re after.

Application deployment

Currently, there are more than 20,000 mHealth applications in the marketplace, and that number is growing across all mobile platforms. Most hospitals are using application layer firewall and unified threat management in order to deploy and monitor applications safely and securely, and remain in compliance with HIPAA.

These strategies have proved to be beneficial when it comes to personally owned devices. However, they also raise concerns about performance degradation and scalability. Deploying and supporting diverse applications can be troublesome, especially with the magnitude of devices involved. IT and the mobile workforce must have the same goal in mind — patient safety and protection. From there, they can put clear policies in place.

Ruggedized devices

Hospitals are not the safest place for a mobile device. There are fluids and other harsh operating conditions that can be challenging. The conditions are drastically different from those of a standard office. At the same time, it’s unlikely that clinicians have the safeguards in place to protect their devices from cross-contamination from hospital to hospital.

The question is, should the responsibility of the sanitation and hardening of the personal device fall on IT, or should the clinician assume responsibility when deciding to use their own device in the treatment of patients? This factor cannot be ignored when deploying a BYOD strategy.

Final thoughts

BYOD isn’t a passing fad. It’s here to stay, and organizations need to establish strategies and best practices to handle this ever-changing landscape. The organizations that successfully deploy BYOD initiatives have the ability to transform clinical workflows, streamline processes, improve physician access to information, and improve overall patient care.

Chris Crowell is President and CEO of Enterasys. He works with several healthcare organizations looking to expand WiFi for BYOD. Some notable customers include Henry Ford Health System and Western Maryland Health System.

Doctor using tablet via rangizzz/Shutterstock

This is a guest post by health executive Alicia Torres

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

Sources are telling us that WellDoc, a startup that provides chronic disease management solutions, has found a buyer.

Elite health incubator Rock Health substantiated the rumor that WellDoc has been shopping for an acquirer in a blog post.

Last we heard from WellDoc in August 2012, the company announced its intent to raise $10 million in funding. An SEC filing revealed that the company secured $500,000, so funding may be drying up (unless there is something we’ve missed.)

Among the potential buyers, one source suggested that healthcare management giant Alere is interested, given that they inked a deal to market WellDoc’s diabetes tracker.

A spokesperson from WellDoc declined to comment on the acquisition.

Digital health incubator Rock Health released data today that shows an increase in funding for med-tech startups in the first quarter of 2013.

Thirty-seven health deals were valued at a total of $365 million, which is 35 percent higher than the first quarter of 2012, “suggesting that 2013 will be another record year for the digital health industry,” the blog post reads.

Rock Health cofounder Halle Tecco said the uptick in venture investment was matched by several acquisitions, including UnitedHealth Group’s buy-up of Humedica (a deal that was reportedly valued in the hundreds of millions). “The players seem to be especially heating up their M&A engines,” she said.

According to Rock Health, the largest and most notable deals of the quarter include:

• Healthcare data warehousing provider HealthCatalyst raised $41 million from Kaiser Permanente Ventures, Norwest Venture Partners, and Sequoia Capital
• Audax Health, led by a 23-year-old college dropout, raised $21 million from former Apple CEO John Sculley
• Kareo raised a $20.5 million sixth round to build out its medical office software
• Mobile health company PatientSafe Solutions raised a $20 million third round from Merck Global Health Innovation

What’s coming up in 2013? Tecco predicts a booming demand for wearable devices from companies like Jawbone, Misfit Wearables, MC10, and Basis. She said Fitbit has been shopping for a $30 million round, which was leaked to the press, but to her knowledge, the deal has not yet closed.

Remote patient monitoring is another rapidly-growing digital health market, which increased to $10.6 billion last year, according to a report by Kalorama Information. Rock Health points to a handful of startups that received funding this quarter, including Bam Labs, a sleep monitoring device placed under a mattress to detect movement and heart rate, and Independa, an independent living solution for the elderly.

Other areas to watch include personalized health and cloud-based electronic health records. On the other hand, bio-tech and medical device entrepreneurs are struggling to gain investment due to complex regulatory issues. Read more on Rock Health’s research here.

Futurist and entrepreneur Michael Vassar has an issue with the U.S. medical system. He hopes to “humiliate” it into providing better quality care by creating a “product that works better than the system.”

With $500,000 in startup investment from PayPal cofounder Peter Thiel, he has handpicked a crack team of physicians and software engineers (including Skype founder Jaan Tallinn) for a new health care company called MetaMed. The goal is to leverage data and statistics to take the guesswork out of medicine.

“It seems very possible to add 10 or 20 years of healthy life expectancy to a person who gathers all the relevant data today,” said Vassar in an interview with VentureBeat.

It’s possible, but only for Metamed’s affluent private clients.

MetaMed provides high net-worth individuals with access to its team of doctors who dig deep into patient history, metabolism, genomic variation, results from companies like 23andme, and other research to deliver a full medical report.

MetaMed cofounder and chief scientist Michael Vassar

He cites some terrifying statistics from recent reports to highlight the extent of the problem they are trying to solve: Over 30 percent of fatal illnesses are missed during diagnosis, doctors only spent an average of 11 minutes with patients during primary care visits — and this figure hasn’t changed since the 1930s — and cancer death rates have decreased by less than 5 percent over the past 40 years.

It’s still early days, so MetaMed’s New York-based team is primarily occupied with providing doctors with high-quality research for a tricky case or medical conference. ”Doctors don’t usually have a public health or statistical background,” he explained. “So they aren’t in a position to distinguish between popular hypotheses in the medical field.”

MetaMed also works directly with patients who are suffering from a chronic condition like migraines, Lyme Disease, or even cancer. They receive varying treatment options from doctors, so turn to MetaMed for a concrete answer. ”We try to figure out what the global opinion is and not just take the dominant literature position,” said Vassar.

For about $400 per hour for a doctor and $200 per hour for a senior researcher, patients will receive an in-depth report and a medical consultation to discuss the results. It’s not dissimilar from ultra high-end company Private Health Management, dubbed by the Wall Street Journal as the “doctor to the 1 percent.”

When asked about whether MetaMed will share any of its medical findings, Vassar said he is open to a conversation. But Vassar said the company is not in the business of “awareness raising” and won’t be “spending millions trying to convince the public of every finding.”

MetaMed is aware of the security and compliance issues in the health care industry, so they are clear that patients need to volunteer their personal health information. This data is stored on a secure server, and is never shared without patient’s permission.

The company is on the lookout for physicians to hire to add to its medical advisory team as it expands its service internationally. According to Vassar, one of the major challenges to growth involves recruiting doctors at the top of their field, especially those in specialties. “There are just not that many good doctors out there; not every city has even one, unfortunately,” he said.

When asked about what makes a good doctor, he said it’s those who feel that their residency forced them to “violate” the principles they learned in medical school. Vassar doesn’t go as far as outspoken entrepreneur Vinod Khosla in suggesting that technology will replace doctors, but he does believe that machines can perform a “much better job of medical diagnosis.”

The idea for MetaMed was formed when Vassar was the president of the Singularity Institute, a research organization focused on the field of Artificial Intelligence.

At that time, Steve Jobs was suffering from pancreatic cancer, prompting Vassar to consider a scenario in which the late Apple CEO brought together Nobel Prize-winning scientists and physicians from around the world to consider his case. “That is the solution we are trying to create with MetaMed,” he said.

Medical research image via Shawn Hempel, Shutterstock

SAN FRANCISCO –  The health care industry is undergoing major surgery. At the center of these operations is Rock Health, a startup accelerator dedicated to the intersection of healthcare and technology. Today, at a demo event at the University of California San Francisco, 14 startups presented their ideas on how to transform and improve healthcare in the U.S..

Dr. Aenor Sawyer, an associate clinical professor at UCSF, said during her opening remarks that these companies are changing “how we take care of patients and how patients take care of themselves.” Whether it is managing secondary care, untangling the confusing labyrinth of insurance, or encouraging healthy lifestyle habits, these startups are holding the scalpels.

If the intersection of health and technology interests you, check out VentureBeat’s HealthBeat 2013 conference, which will focus on “Smart Hospitals” and “Smart Practices,” and how new technology can disrupt health care.

Rock Health was founded in 2010 as the first accelerator program for health startups. It currently has 49 portfolio companies, which have collectively raised over $43 million in funding from a prestigious list of investors. According to AngelList, Rock Health companies have the third highest valuations of all incubators and accelerators, following Y Combinator and StartX.

Each of the founders at today’s event had a unique story and expertise that brought them to the stage. Some come from the startup world, but many experienced these problems in the field and came to entrepreneurship as a method of solving them. Rock Health provides them with mentorship, funding, and other resources to get them off and running.

Digital health is one of the hottest trends in the tech right now. Venture capital funding in this space grew dramatically in 2012, as investors, entrepreneurs, and health care organizations from across the spectrum jumped on emerging opportunities. However, the health care industry is so massive and built on such old practices and systems that some are skeptical of a startup’s capability to effect meaningful change from the outside. A few of the startups that presented today are consumer focused, but most are targeting the enterprise and the operations of large healthcare organizations. These young, lean and energetic startups are tackling the big guys, and telling the healthcare industry itself, it needs to adopt a more active lifestyle.

Read on for notes on each company’s presentation.

The first four companies to present are still in “stealth mode” and gave brief updates on their activity and progress.

Benefitter helps employers confidently navigate health care reform, save money, and improve their employees’ well being. CEO Brian Poger said that many employees would actually be better off if they did not receive employer-sponsored health insurance. Benefitter helps them understand the legislation, set strategy, and execute it “to make the Affordable Care Act more affordable.”

SuperBetter helps people solve their health challenges by turning goal achievement into a game. The company is currently awaiting the results of a research trial with the University of Pennsylvania about how the system can help people battling mild to medium levels of depression, and other potential applications include anxiety and stress disorders, smoking cessation, and weight control.

Moxe Health improves access to care for newly insured and underserved patients by helping them find the best providers for their needs. This not only benefits patients but also health care organizations and insurance providers who want to optimize their available resources.

Mango Health makes mobile applications that inspire consumers to follow their treatment regimens. CEO Jason Oberfest said that 1 in 5 Americans take prescription drugs or supplements, but up to 75 percent don’t do it properly. “Nonadherence” is a $350 billion a year problem, and something as simple as a mobile app that makes sure people take their medication correctly can significantly reduce the amount of return hospital trips and remission.

The CEOs of the remaining 10 companies then gave longer, five minute presentations.

The first company is tackling an issue many male entrepreneurs won’t touch, but which on some level effects everyone in America.

Wildflower Health makes pregnancy healthier, safer, and more cost-effective through a mobile platform and predictive analytics. CEO Leah Sparks said that pregnancy-related costs are the number one driver of hospital costs at $86 billion a year, and two-thirds of these costs are associated with pregnancy complications. This is an issue for patients and their families, hospitals, and insurance providers. As it stands, wildly ineffective phone-based programs are the main method of risk assessment and tracking. Wildflower’s first app, Due Date, helps pregnant women track milestones customized to their due date, be aware of risk factors, and take personalized actions. The sales pipeline for its enterprise platform covers 30 million people, and they charge a fee for each person enrolled.

Sparks closed by saying that 40 babies were born during her presentation.

Wellframe combines mobile technology and artificial intelligence to extend the provision of care from the hospital to the home. The first product targets cardiac patients, who can use the system instead of regularly going on inconvenient and/or expensive follow-up visits. A patient can use the app as a “digital concierge” to personalize a daily task list that simplifies what they need to do to overcome heart disease and minimize risk.

OpenPlacement offers tools to match seniors with appropriate housing and care providers after they have been discharged from a hospital. According to CEO Dominic Scotto, over six million seniors are transferred a year to the next level of their care, but the process is inefficient and frustrating across the board. Patients receive list of possible facilities that is often out of date and missing information. On OpenPlacement, clinicians can search for placements based on available beds, geography, budget, required services, and the level of care. So far, 500 paying care providers use the service.

Wello makes fitness more personal, accessible, and affordable by using live, two-way video to connect fitness trainers and clients. The platform makes it easy to work out anytime, anywhere, targeting the 89 percent of Americans who wish they were more fit. Wello also just launched a Group Workouts feature that lets users exercise with other people, whether it is a group of pregnant women, middle-aged men trying to lose weight, or someone in California that wants to exercise with her best friend in New York.

LabDoor tells you “what’s real” in consumer products, beginning with safety and efficacy ratings for the $36 billion supplements market. CEO Neil Thanedar said that this industry is mostly unregulated, and yet consumers have a right to know what is in the supplements they take and give to their children. LabDoor tests the products in chemistry labs to find quality and purity data and offers this to consumers. “The results are amazing and scary,” he said. “Over 70 percent of products being tested had inaccurate label data, and over 90 percent contain contaminants. We want to change the base of the industry from marketing hype to real facts and build consumer trust.” Their next milestone is to have full ratings and reviews for 1,000 products and to someday expand into other industries like cosmetics and organics.

Eligible streamlines insurance eligibility checks for doctors and patients. Founder Katelyn Gleason said that the systems used to transport health information between patients, hospitals, insurance companies, labs, and pharmacies costs $150 billion a year, and the transactions are done using “archaic processing” technology that take full IT teams to run. She wondered why, in the middle of Silicon Valley, no one was building a better, simpler, more efficient system. Using Eligible’s API, software engineers can integrate health exchange protocols using three lines of code and connect instantly with over 700 health insurance companies. Eligible runs in the cloud, in the background in real time, and takes $.05 from every transaction.

Beam Technologies makes the Beam Brush, a connected toothbrush to improve oral health. According to CEO Alex Frommeyer, tooth decay is the most common infectious disease for children in the U.S. Through a sensor, the Beam Brush collects dental data and displays it in an application, so kids and parents can stay on top of their oral hygiene and even be rewarded for achieving their “brushing goals.” The company has also partnered with major dental insurance provider Delta Dental to use this data to reduce the risks and costs of oral disease. Since Christmas, over 2,000 brushes have been sold, and Beam has dreams for connected plates, bathmats, and more.

CliniCast unlocks the potential of health data to maximize outcomes and minimize costs. Founder Jack Challis seeks to provide a FICO score to health care data to make sure that physicians are delivering the best care and outcomes at a reasonable price. The system has tools to assess risk, streamline workflow, measure performance, and exchange information, to measure the effectiveness of each interaction.  The goal is to improve the transparency of information in the marketplace and make health care as efficient as possible.

Zipongo provides healthy food incentives and personalized meal plans that engage employees, making it easier to eat well. “Food is medicine,” said  CEO Dr. Jason Langheier. “We have built a ‘grocery Rx’ to deliver descriptions for health living.” Employers and health plans pay a small member fee a month, and Zipongo provides deals on food items, insights into dietary patterns, and suggestions for how to buy and eat healthier, and even recipes. The company has relationships with major grocery chains across the US and can be active in every zip code. started

Kit Check‘s product reduces the time it takes hospitals to process medication kits from 20 minutes to 20 seconds. Founder Kevin MacDonald is an RFID expert. He said that every year, billions of medications flow through hospitals and pharmacies, but there is a tremendous amount of waste and medical errors associated with the mismanagement of these supplies. Kit Check has built a box that can “kit” and quickly figure out what is missing and what is expired as well as generating all the required regulatory paperwork. The business charges per tag and has multiple six-figure revenue clients.

Photo credit: Rock Health

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

But Ayasdi, a startup that closed $10 million in venture funding today, doesn’t just talk the talk. Stanford researchers have been baking the complex algorithms behind Ayasdi (its quirky name means “to seek,” in Cherokee) for over a decade, with the goal of unlocking the hidden value in human genetic data.

In 2008, the founders, Gurjeet Singh, Dr. Gunnar Carlsson, and Harlan Sexton, decided to commercialize the technology. With the government stepping up its funding for science, they were able to pull in $3.5 million in grants from DARPA, the department of defense agency responsible for building new technology for the military, and the National Science Foundation. The result? A synthesis of machine learning technology and topological data analysis (TDA) that has impressed a score of Silicon Valley investors. Rather than typing in search-style queries, the tools allow for automated discovery of information.

As Dr. Carlsson explained in an interview, “The idea is to answer questions that you didn’t know to ask.”

Ayasdi CEO, Gurjeet Singh.

This year, the 30-person team of engineers will expand its marketing and sales efforts with funding from Khosla Ventures, Floodgate, Data Collective’s Matt Ocko, serial entrepreneur, Steve Blank, and more. Storied investor Vinod Khosla, who rocked the medical world with the statement that 80 percent of doctors would be replaced by machines, said Ayasdi’s “machine powered intelligence” has the potential to unearth “previously unattainable insights that will help solve some of our most pressing global, social, and economic issues.”

Eric Schadt, Director of the Institute for Genomics and Multiscale Biology, has a team of researchers using the technology to identify the genetic predispositions of many diseases, including cancer, which they hope will help them “glean new insights that will lead to breakthrough drug therapies.”

Related: In the burgeoning field of genomics, entrepreneurs aim to deliver more personalized treatments for life-threatening diseases.

Ayasdi is working with the nation’s top hospitals and medical researchers to uncover more targeted treatments for disease. Singh, the company’s CEO, told me that hospitals and big pharmas are routinely pulling data from public sources — medical researchers are required to publish their data  – and combine it with private data to yield new insights.

A data visualization depicting 14 variants of breast cancer

The data isn’t anything new — it’s the technology that has evolved. “We have automated the discovery of knowledge from data,” said Singh in a phone interview. “We were able to discover a new type of breast cancer without asking questions.”

Singh was referring to a recent breakthrough where Ayasdi mapped 14 variants of breast cancer. Using data collected during a 15 year period, and studied by thousands of scientists, the algorithms discovered a sub-group of patients that have a higher chance of survival based on their genetic profile. If a patient falls into this sub-group, it is unlikely that they will require chemotherapy.

Ocko witnessed this medical breakthrough first-hand in the minutes before he opened his check book. “The massive deficit that corporations and governments face as the amount of data gets exponentially larger is not more intelligence, it’s insights and intuition,” he explained by phone. The data-focused investor said the company’s ability to provide human analysts with “intuition from vast amounts of data in very short periods of time” is virtually unprecedented.

In another recent partnership, with Mount Sinai Medical Center, Ayasdi was used to point to targeted treatment options for E. coli sufferers. E. coli affects more than 265,000 people in the U.S. every year, and millions around the world. It is known in the medical community for developing resistance to many drugs, and doctors are never 100 percent sure if a treatment will work or not. Mount Sinai is using Ayasdi to analyze the entire E. coli genome sequence, which includes more than 1 million DNA variants. This will further our understanding of why some types of E. coli develop resistance to antibiotics and how we can combat the spread of the bacteria.

Singh, a former researcher at Stanford, told me that the company has secured 20 customers in the oil and gas, government, pharmaceutical, and healthcare sectors. Big name customers include Merck, the Food and Drug Administration, and the U.S. Department of Agriculture.

HealthCatalyst is the latest health technology startup to benefit from the Affordable Care Act, aka Obamacare.

The startup, once known as Healthcare Quality Catalyst, provides health care data warehousing for 81 hospitals and health systems, serving 20 million patients. The company claims to be the only data warehouse that is specifically built for the healthcare industry.

This makes it ideally positioned to take advantage of Obamacare, which mandates that health providers and hospitals shift to to electronic records.

“Almost every hospital and hospital system will need a data warehouse to organize, visualize and utilize its data to address the $750 billion of waste in the U.S. healthcare system,” said Norwest Venture Partners’ Pramod Haque in a statement. He said that Health Catalyst can meet this need and boasts a “pipeline of health systems that are demanding the company’s solutions.” Its current customers include Stanford Hospital and Clinics and Texas Children’s Hospital.

The Salt Lake City-based company raised a mammoth $33 million in funding from a roster of venture capital firms. The second round was led by Norwest Venture Partners, with participation from existing investors Sequoia Capital and Sorenson Capital. Haque will join the board of directors, and Frank Bullock, Sorenson Capital’s managing director, will assume a role as a board adviser.

Med-tech is off to a bold start this year with a hot acquisition, which will serve to consolidate the market.

Epocrates Inc., a medical applications company based in Silicon Valley, is being scooped up by AthenaHealth for $293 million. According to a company press release, AthenaHealth will pay $11.75 per share, a 22 percent premium to Epocrates’ Friday closing price.

Massachusetts-based AthenaHealth provides cloud-based services and tools to doctors and hospitals. The company faces fierce competition from Siemens Medical Solutions USA, Inc., Quality Systems, as well as Allscripts Healthcare Solutions, which is retooling after a protracted drama with its board. 

Epocrates is an attractive prospect for AthenaHealth, as it has built up brand-name recognition with doctors. AthenaHealth estimates that it is has been used by 338,000 U.S. physicians to pull up short summaries on drugs, including information about side effects and interactions.

“Capturing mindshare has been an uphill battle for Athena for years, and the addition of Epocrates to the platform is a step in the right direction,” said Greg Bolan, an analyst with Sterne Agee & Leach Inc, in an e-mail interview with Bloomberg.

The acquisition will help the company gain an iPhone app and expand into the lucrative electronic medical records (EMR) market.

“I have been an admirer of Epocrates since it first emerged and have watched the company grow consistently, one app download at a time, as it has cemented itself into the consciousness of America’s physicians,” said Jonathan Bush, the president and CEO of AthenaHealth in a statement. “Together, we’re excited by the opportunity to redefine the mobile toolset for care givers,” he added.

With all this talk of disruption in the enterprise, young founders should not underestimate legacy vendors. Business software behemoths like SAP and Oracle have their eye on the big trends, whether it’s cloud, “big data” or mobile computing, and are finding ways to filter out the most innovative technologies from the noise.

At CloudBeat, VentureBeat’s recent customer-focused cloud conference, I caught up with Sanjay Poonen, president and corporate officer at SAP, who specializes in technology and product innovation. That afternoon, Poonen was joined on stage by one of the company’s biggest healthcare customers McKesson to discuss ongoing concerns about the cloud and their reasons for selecting SAP.

In this ensuing discussion, Poonen revealed that SAP has hedged its bets on its own big data solution, known as HANA. He told me that IT will be “transformed” by big data. In 2013, he said, “a lot of the hype goes out [the door] and the substance starts to show up.”

Watch the video for more of SAP’s predictions on the big tech trends for the coming year.

SAP (Source) from VentureBeat on Vimeo.

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All eyes are on healthcare technology startups, but the space is still treated with caution by angel investors and the venture capital community alike.

Most investors don’t have the specialized knowledge to understand the pain-points that doctors and healthcare providers face, and many will not see return on investment in three to five years, the period they are typically willing to wait. It takes a special kind of investor to fund a health tech company.

New York-based online trading platform SecondMarket may have a solution to the problem, as part of its broader plan to stimulate investors’ interest in verticals like healthcare and education. SecondMarket’s members are used to buying up shares in consumer-focused companies like Twitter and Foursquare.

“Our members might be interested [in a space] from a macro-perspective, but they don’t feel comfortable enough to deploy capital,” said Jeremy Smith, SecondMarket’s CSO in a phone interview.

The company has teamed up with digital health accelerator Startup Health for the month of December to offer its members’ access to white papers and webinars produced by independent parties, and curated by Startup Health.

Since its inception in 2011, Startup Health has enrolled 23 startups in its intensive three-year program. The program favors companies that have already raised a small seed round, and offers them mentorship and a professional network to maximize their chances of success.

“You can’t expect our members to put in capital and hope for the best,” said Smith.”We’ve created a program to help them get educated.”

SecondMarket’s investors are encouraged to pour thousands of dollars into promising health tech startups, as well as Startup Health’s new fund. According to a document available to SecondMarket’s network of accredited investors, Startup Health is building up a $7.5 million Innovation Fund to support up to 100 digital health and wellness startups. The new fund will take a 2 to 10 percent equity stake in each startup.

The hope is that this will provide health tech entrepreneurs with sufficient capital to test the market opportunity, and in a position to raise venture funding later down the line.

Healthcare image // lenetstan, Shutterstock 

Today, Scanadu unveiled three health products that help people get in touch with their physical health. Billed as “the biggest innovation in home medicine since the invention of the thermometer,” these home diagnostic tools use mobile, sensor, and social technology to create a real-time, comprehensive picture of your health data.

Scanadu SCOUT is a sensor that people hold up to their temple, and in less than ten seconds, it will collect data on pulse, heart rate, electrical heart activity, temperature, heart rate variability, and blood oxygenation. The device be available at the end of 2013 for $150.

The second tool, Project ScanaFlo, analyzes urine for conditions like pregnancy complications, preeclampisa, gestational diabetes, kidney failure and urinary tract infections. This disposable cartridge will be sold over-the-counter.

Finally, Scandau will sell Project ScanaFlu. This disk tests saliva through a disposable cartridge to detect Strep A, Influenza A, Influenza B, Adenovirus, and RSV. Catching respiratory disease and the flu early generally leads to a speedier recovery.

All the data collected through these devices will be tracked through the mobile app, which offers a personal health feed to monitor vitals signs and identify patterns over time. By “sending your smartphone to med school,” mobile devices become a powerful tool to keep people in tune with their bodies.

“People can get access information about health and connect to each other about health, but the piece that is missing is that people can’t get information about their own body,” said founder Walter De Brouwer in an interview with VentureBeat. “By getting precision diagnostics into the hands of people, this can enable them to get early detection and to inform their conversations with their doctor in the ways that haven’t been possible.”

De Brouwer is a “futurist, academic, scientist and entrepreneur” who helped found TEDGlobal and worked with the One Laptop Per Child initiative. In 2005, his son suffered brain trauma and spent a year in the hospital. This experience inspired De Brouwer to leave academia and set out to change the healthcare industry.

The American health industry is in a state of flux, with significant reforms and technological developments affecting the way people think about healthcare and its providers. De Brouwer said that that the center of gravity is moving out of hospitals and into outpatient care, and tools like this can lead to better, smarter care for more people, at a fraction of the time and cost.

Scanadu is based at the NASA-Ames Research Center and is part of the Qualcomm Tricorder X Prize competition. These three products are just the beginning. The crack team of biohackers, doctors, scientists, engineers, PhDs, and MDs are full of ideas for the future, including testing for AIDS and “embarrassing diseases” where patients feel shy about seeking medical help.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

This is a guest post by investor Robert Abbott

In a field where handwriting notes on paper charts and managing large rooms filled with filing cabinets have been the accepted practices for decades, healthcare providers are being deluged by a perfect storm.

Not only do they have to grapple with implementing new technology and converting paper files to digital format, they are simultaneously dealing with how to secure this growing cache of electronic data while complying with complex corporate governance policies and federal mandates.

Despite these challenges, healthcare providers are finding a silver lining in secure cloud services that help them address the key technology, regulatory and privacy issues they face.

The market and legislated demands created by 900,000 healthcare providers migrating to electronic records has resulted in a $25 billion healthcare IT market, which is expected to grow more than 24 during 2012-2014, according to global market research company RNCOS.

But because healthcare is about a decade behind other industries in the adoption of IT technologies, this perfect storm is giving healthcare companies a chance to leapfrog into cloud-based solutions designed to solve their unique needs.

Cloud adoption is still in its infancy in healthcare with early adopters representing only about four percent of the market. However, there is great potential for cloud technology. According to a report from research firm Markets and Markets, the cloud computing market in healthcare is estimated to grow at 20.5 percent from 2012 to 2017. [At VentureBeat's CloudBeat conference, which begins tomorrow, healthcare is going to be a major theme; providers will discuss how they're adopting the cloud, and healthcare companies will explain how it's also helping them use novel "big data" strategies.]

Given these growth prospects, there is a sweet spot in this market for cloud service providers that can effectively combine IT expertise and experience dealing with the unique privacy, security and compliance demands of the healthcare market.

Of particular interest are cloud providers that offer automated solutions to replace traditional paper-based processes, enable better connectivity and communications between patients and their providers, and that support the entire healthcare supply chain.

Some of the leading cloud providers in healthcare today include CareCloud, ClearDATA Networks Inc., athenahealth, ADP AdvancedMD, PracticeFusion, RemitDATA, and TeraMedica Inc. For example, Baptist Health South Florida, the largest not-for-profit healthcare organization in the region, recently announced it is subsidizing CareCloud’s integrated electronic health record and practice management solution to more than 2,500 community-based physicians to improve patient care. While ClearDATA, for example, is providing its HealthDATA Cloud Platform to Dignity Health, the fifth largest hospital provider in the nation and the largest hospital system in California.

“By moving various healthcare infrastructure and applications to ClearDATA’s cloud platform, Dignity Health has been able to reduce its IT costs while increasing security and efficiency and greatly decreasing the time it takes to deploy a solution,” said Darin Brannan, ClearDATA’s president and CEO. “We also improve reliability – in terms of uptime and redundancy – and our state-of-the-art cloud systems provide greater performance over legacy hardware and networking architectures, which is typically not well-suited for the hospital’s growing data requirements.”

During CloudBeat 2012, on Nov. 28 at 10:15 a.m., Brannan and Scott Whyte, Dignity Health’s vice president of IT Connectivity, will join VentureBeat Executive Editor Dylan Tweney to talk in more depth about the challenges that healthcare companies face in their transition to electronic medical records and new IT solutions, and what they need to consider when adopting a cloud solution. During the session, they’ll also share more details about how Dignity Health has employed ClearDATA’s innovative solutions to strategically upgrade select components of its IT infrastructure, prepare for personalized care models, comply with mandates and ensure the security and privacy of patients’ electronic records. 

Robert Abbott is a general partner at Norwest Venture Partners (NVP), where he focuses on a wide variety of investment categories including mobile, cloud and IT infrastructure. NVP is an investor in ClearDATA and CareCloud. 

Navigating the storm image // Shutterstock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

In the past three years, 21 million people had their sensitive health records hacked in breaches that were significant enough to be reported to the federal government.

The actual number is likely far higher; millions of smaller hacks likely went un-reported. The Office for Civil Rights reported that (the “OCR”), from 2009, 477 breaches affecting 500 people or more were reported. In total, the health records of 20,970,222 people were breached, according to the OCR’s website.

At CloudBeat, we’ll be debating this in several ways. First, a panel of healthcare-technology experts will gather discuss ways to improve security for cloud-based systems. In this sector, there are still significant questions and concerns: Cloud security, cloud encryption and HIPAA requirements regularly top the list.

In the past, the most sensitive records were stored on film, tape and paper charts. As data gets digitized, hospitals, physician practice groups, software and hardware companies, consulting firms and affiliated health care organizations are grappling with how to keep it secure.

Second, we’ll be inviting the major healthcare record and billing company, McKesson, to discuss how that $22 billion company is applying new big data initiatives to its data, using things like SAP’s Hana in-memory database platform in the cloud.

(CloudBeat is unique with its emphasis on customer case-studies. It’s not abstract theories and ideas — executives will reveal their hard-frought solutions to very real technology problems.)

Get it right, and the opportunity is enormous: market and legislated demand has created $35 billion health IT market which is growing at a rate of 20% year-on-year. In the U.S. alone, approximately 900,000 healthcare providers are migrating electronic health records.

So join us for the panel to learn how Scott Whyte, Vice President of IT Connectivity at Dignity Health, the fifth largest hospital provider in the nation and the largest hospital system in California, is addressing the “perfect storm” of challenges facing today’s healthcare providers and how they are using cloud computing to help solve these technical issues.

The audience will learn about Dignity Health’s journey toward HIPPA-compliant cloud infrastructure technologies in order to meet the growing needs of hospitals and healthcare delivery partners across the country — as well as the cost savings associated with this technology leap to the cloud.

Whyte will be joined by Darin Brannan, president and CEO of ClearDATA, who will address the key technology, regulatory and privacy issues facing the various constituents in the healthcare supply chain. The panel will be moderated by VentureBeat’s own executive editor, Dylan Tweney.

In the McKesson case, we’ll discuss how its big data initiatives are letting it process its ERP and financials faster than ever before, allowing it to analyze this data realtime to track which of their customers are profitable and which ones aren’t, and to make recommendations on how to make them more profitable. The session will be moderated by VentureBeat editor-in-chief, Matt Marshall

Healthcare is a hot topic: as the market matures, more mainstream cloud providers will introduce solutions specifically designed for this vertical.

Top image via Shutterstock

Is there more to your bacteria then meets the eye?

The still-in-stealth-mode Ubiome is developing a technology to sequence human bacterial DNA. The hope is that this will yield new discoveries in the prevention and treatment of disease.

In a unique twist, funding for this research has not come from a grant or academic institution — the team has decided to ask stranger’s to contribute to the project on IndieGoGo. The goal is to raise $1 million.

This is the first crowd-funded citizen science project to map the human microbiome.

Backers will have the opportunity to be tested before UBiome hits the mainstream market. If the idea of having your bacteria analyzed doesn’t make you squeamish, here’s how it will work. Users receive a swab-kit for five sites: nose, ear, mouth, gastrointestinal tract, and genitalia. Each site has a unique microbiome that is home to a specific balance of bacterial flora.

The team will use cutting-edge DNA sequencing to analyze your samples and send custom bioinformatics back to you. Over time, they will store and process the data to make predictions about your health.

“It’s 23andme for the human microbiome,” Richman said. 23andme is a site that has popularized the field of genomics, and it analyzes relevant genetic data to determine your risk-profile for certain diseases.

“We believe the biological information era is going to follow the same trend that the internet did,” said Richman. “When citizens became empowered to explore the internet via search engines like Google, usage skyrocketed. With uBiome, people can explore their personal metagenome from home.”

Related: Read our in-depth review of the genomic startups that can help you live longer

Ubiome’s founding team

The core behind the project includes Richman, a serial entrepreneur who started her first company after high school; Dr. Zachary Apte, a biophycisist with expertise in cell biology; and Dr. William Ludington, a Bowes Fellow in the molecular cell biology department at the University of California, Berkeley. Advisers to the project include Dr. Pablo Valenzuela, a pioneer in the field of industrial biotechnology who has filed a total of 44 research patents.

The crowd-funded research is just the beginning– the team of scientists see vast potential for medical discoveries. To date, the sequencing of the human genome has offered few medical solutions short of gene therapy. However, our microbiome can become healthy through the right mix of probiotic cultures.

Furthermore, these microbial genes outnumber human genes 360 to 1, and scores of research has linked them to diseases like diabetes, obesity, heart disease, anxiety, and other conditions. Richman draws a comparison to the tropical rainforest in Brazil, which depends upon biodiversity — likewise, she explained, “our own health benefits from microbial ecosystems that perform vital functions for our health.”

Image via Shutterstock

Today, scientists made a major step in cancer research; they identified the underlying genetic cause behind a rare form of carcinoma cancer, chordoma.

This discovery puts the emerging field of genomics on the map, may speed up the drug approval process, and reduces the risks associated with groundbreaking research for venture-funded biotech companies. For genetics researchers, it adds credence to the theory that studying rare cancers may reveal more fundamental aspects of cancer biology that are relevant across all types.

“There is a school of thought that rare cancers tend to be more genetically similar and easier puzzles to solve than more common cancers,” said Josh Sommer, executive director of the Chordoma Foundation.

The Chordoma Foundation, a Durham, North California-based nonprofit, identified a specific genetic risk factor that increases the chances that an individual will develop chordoma. Researchers at University College London, Royal National Orthopedic Hospital, and the Sanger Institute, found that over 95 percent of Caucasian chordoma patients have a variation in the DNA sequence at a site on the T gene.

“Our finding that this variation is associated with a five-fold increase in the risk of developing chordoma is remarkable in cancer genetics,” said Dr. Adrienne Flanagan of UCL, who led the study. “It is a major step forward in our understanding of how chordoma develops and can open the door to the development of an effective, targeted treatment.”

This discovery has only been made possible by recent technological developments in Silicon Valley. As we reported, the cost of sequencing the human genome continues to fall, in part due to a microchip and machine designed by genetics company Life Technologies Corp.

“It’s a repeatable and scaleable model that can rapidly push forward early-stage cancer research for pennies on the dollar,” said Greg Piesco-Putnam, cofounder of Aktana, an analytics technology used by large pharmaceutical companies.

“25 percent of everyone who dies from cancer dies from a rare form of it. Traditionally, these forms of cancer have not been economically feasible to find treatments for. This is a huge step forward in that battle,” Piesco-Putnam explained.

Already, the foundation that uncovered the genetic risk factor has partnered with 23andme. With a spit sample, they provide you with a genetic profile and can determine your risk for developing a common genetic disease. 23andme will provide 50 free kits to chordoma patients as part of an ongoing research study into rare cancers.

Read more about the discovery here.

[Top image credit:  Sofiaworld/Shutterstock]

If you’re feeling achy and unwell, the last thing you need is the headache of tracking down a nearby doctor that can see you in short order.

A startup called BetterDoctor has already won over tens of thousands of people with the simple elevator pitch: “We’ll help you find the right doctor.”

The company is the brainchild of Ari Tulli, formerly the head of Nokia’s App Studios, who teamed up with Nokia’s Chief Architect Tapio Tolvanen to fix some of the gaping holes in our healthcare system. ”On average it takes a patient 20 days to get to see a doctor,” Tulla told me.

On BetterDoctor, perform a simple web search, and you’ll be able to access profiles of doctors with offices in your neighborhood. They are listed by speciality, such as primary care or obstetrics. If you’re regular physician can’t see you immediately, the site will point you to alternatives and provide their contact info.

What’s interesting about this startup is that it’s a tool not only to find an available doctor, but to find the best doctor.

The company has spent 18 months building a verification service and has deliberately excluded doctors with negative ratings and those who are fighting malpractice lawsuits. Physicians listed on the site have been included based on their experience, education, and more.

In the future, Tulla told me, they’ll incorporate machine learning (think ‘Pandora for healthcare’), so they’ll be able to recommend a doctor based on your gender, location, insurance type, prior physician, and pre-existing conditions. Also in the product roadmap is a scheduling service for users to book an appointment online. This will put the company in a stronger position to compete with up-and-coming healthcare startup, ZocDoc.

The product has been beta-tested in San Francisco for several months, and after several revisions, it is launching nationwide today. It has already signed up hundreds of doctors in the Bay Area, and is adding more each day.

On the site, you’ll find 600,000 doctors’ profiles. The majority of these doctors will not have registered with the service or even heard of BetterDoctor. The startup’s team of programmers have scraped Yelp, hospital listings, private practice sites, and the like to create custom profiles for doctors with reviews, location information, and more.

Tulla told me it’s a great marketing tool for doctors, who don’t have to lift a finger to get free publicity. In the Bay Area, many will have noticed a recent, mysterious spike in patient bookings before doing their homework and finding BetterDoctor. “There are some doctors who have 10,000 views on their BetterDoctor profile,” Tulla told me.

For now, doctors can join the site on an invitation-only basis, but they can request to “claim their profile,” meaning that they can fill it out with custom, additional information. The founders plan to make money by asking these doctors for a cut when a BetterDoctor user — a new patient — walks into their practice.

BetterDoctor’s web app is already live, and the iPhone app is currently under production and will be released in the coming months. The company launched its private beta at Founders Den, a shared office and private club for San Francisco-based entrepreneurs.

Top image via Shutterstock

Many of us loves boobs. There is certainly no shortage of boobs online, but they are often used for a good cause. Fortunately, the Avon Foundation is using the Internet to save them.

The Avon Foundation for Women is a major supporter of breast cancer and has distributed more than $860 million to programs around the world that support both research and access to care. A major component of its fundraising efforts are the Avon Walks, two-day, 39-mile walkathons that take place around the country.

These events bring together thousands of women and their supporters and raise millions of dollars. This past weekend at the walk in Santa Barbara, 1,700 participants collectively brought in $4.7 million. The only pre-requisite for signing up, aside from a dedication to the cause, is walkers must raise a minimum of $1,800.

For many, the financial challenge is more daunting than the walk itself.

“One of the barriers for people to participate is the worry that they can’t raise the money, especially for people who have never fundraised before,” said program director Eloise Caggiano. “By making it super-easy for them to do the fundraising using our website, apps, and social media, we can alleviate some of their fears. We do anything we can do break down these obstacles.”

The foundation has come a long way in the past couple years with regard to social media. Based on demand from consumers and participants, the organization began using technology to engage more with their community. Walkers can easily register online or from their smart phone. The Avon Walk application for the iPhone enables fundraising on the go. People can also use these tools track their fundraising progress, reach out to donors, and send “thank you” messages.

Avon has also partnered with Runtastic to create a pedometer app that monitors steps, distance, and speed during preparatory walks. People in training can post progress updates on their social networks, conveniently next to a “Donate Now” button. 

A huge number of participants use their Facebook pages and Twitter accounts as part of their individual fundraising efforts. The Avon Walk Facebook page itself has 50,000 fans and is full of shared stories, photos, and videos to digitally communicate the experience of the walk. Caggiano said the capability to see in advance what the walk is like is comforting to women who are nervous and is also encouraging for those on the fence about signing up.

“The more we can get the word out there, the better,” she said. “Keeping up with the times is an important element in that. If we keep printing out brochures and putting them in snail mail when everyone else is online, then we aren’t being very smart. We want as many people to know about the good work as possible, and for people to feel comfortable with who we are and what we do.”

The Avon Foundation also uses their enhanced online and mobile presence to keep supporters in the loop about there their money is actually going. Avon provides donations to a variety of causes, and a feature on the site shares the real-world impact of the dollars.

Michael Spatz turned his social media power into $11,000. Spatz lost his mother to breast cancer and knew multiple friends who also struggled with the disease. He felt helpless and wanted to take action, so he signed up for the Avon Walk.

“As a guy, I don’t know what is going on inside a woman’s body,” he said. “As you get older, things start to happen to the people you love and care about. It is a harsh reality. This is what I was able to do, and I did it all to social media, emailing and Twitter.”

Spatz began his fundraising efforts online. He created T-shirts with cute slogans on them like “Viva La Boobies” and posted to his Facebook that anyone who contributed $20 would get a free shirt. His efforts spiraled. Soon, he had hundreds of requests for T-shirts coming in and people sending thousands of dollars in checks. He completed his fundraising within a month.

The walks are examples of events where the journey is just as significant as the destination. People spend months fundraising, training, and raising awareness their efforts and this pervasive disease. While technology is useful for fundraising, one of its most powerful effects has been the capability to connect women all over the country, before, during, and after the events.

Participants are able to reach out to a wider audience, including people from around the world or those they have lost touch with. On platforms like MyBreastCancerTeam, women facing the disease can find a protected, nurturing, safe support network. The internet offers opportunities, not only to raise money but to also meaningfully rally around a cause in an online environment.

In this case, the cause is to Save the Ta-Tas!

The health-care industry needs treatment. Massive organizations dominate the industry, bogged down in bureaucracy, slow to iterate, and attached to costly, outdated systems.

Startups have tried and struggled to cut into incumbent health-care providers, insurance companies, and pharmaceutical corporations. Tigerlabs gives them the scalpel.

Tigerlabs is a three-month accelerator program located in Princetown, N.J., in the middle of the “Pharmaceutical Corridor.” The founders are now accepting applications for the Winter 2013 session, which starts in February. Participating entrepreneurs receive $20,000 in seed funding as well as work space, mentorship, product discounts, and access to professional seminars.

“This is a green field ripe for disruption,” said founder Bert Navarrete. “The incumbents are all integrated with these old legacy systems that make it hard to innovate. We are going to leverage our connections and relationships with leading hospitals, the pharmaceutical industry, and medical executives to create a program with a lot of cross-education. Startups will be educating big companies, and big companies will be telling startups about their pain points.”

Developments in technology also affect change. The proliferation of cloud-based services and smartphones makes it easier for deliver new applications to patients, and this opens up opportunities for interaction between consumers, startups, and the incumbents.

Although the big guys have expressed openness to evolving, Navarrete believes it’s ultimately it is up to the consumer.

“The catalyst will come from the ultimate end user,” he said. “Like many other things where you see massive disruption from legacy incumbents, it is the consumer that drives most of the behavior. When doctors demand easier ways to communicate to their patients, and people take greater control over their health-care, then there will be change.”

Navarrete is a Princeton local who spent his career working in venture finance for firms like Merrill Lynch and the Internet Capital Group. He started down this path by creating a work space for entrepreneurs in Princeton who were forced to work in “Panera, the grad school library, or a corner sublet in an architecture studio.”

His initial efforts to galvanize the local startup community combined with repeated conversations with the medical community about their pain points inspired him to start Tigerlabs. The program is open to a wide range of ventures within the health-care IT space, including mobile health, software as a service, disease management, “big data,” diagnosis engines, communication and payment tools, and virtual care.

Tigerlabs will consider applications ranging from solo founders with an idea to established companies seeking a go-to-market boost. Navarrete even anticipates getting some medical executives who are tired of operating in a broken system and looking for a change.

Launching a new startup … the latest way to have a mid-life crisis.

A trio of Harvard Business School professors made a stop in Silicon Valley to warn that the economic competitiveness of the United States is lagging behind other countries. Their message was laced with hopes that entrepreneurship will save the country, but the facts they carried with them would depress members of any political party.

It’s no secret that the professors are raising the issue of competitiveness just before a presidential election. But their message, based on reports created over the past 18 months by 15 Harvard Business School professors, wasn’t partisan. In an October 2011 survey of 10,000 HBS alumni across the economy, about 71 percent of respondents expect U.S. competitiveness to decline over the next three years, with workers’ living standards under greater pressure. About 1,700 of the respondents had to personally make decisions about whether to leave the U.S. for jobs overseas.

In Silicon Valley, optimism rules, particularly compared to places such as Detroit. But Jan Rivkin, a professor of business administration at Harvard, made the case that America has a structural problem. From 1975 to 2001, the U.S. created jobs at an annual rate of 2.7 percent of the job base per year. But in the past decade, job creation has been flat. Real household income has taken a dip.

“What we’re seeing in the U.S. is not just a cyclical downturn followed by a slow recovery,” Rivkin said. “It is not just the hangover of the financial crisis. It is addressable, but if not addressed, it will hold back the American economy for a generation.”

John Riccitiello (pictured right), the chief executive of Electronic Arts, welcomed the Harvard Business School panel on U.S. economic competitiveness to his campus in Redwood City, Calif., with a little cynicism toward politicians.

“Every CEO in Silicon Valley cares about U.S. competitiveness,” he said. “Frankly, I see U.S. competitiveness slipping. It frustrates me as a U.S. CEO to see politicians decry the movement of jobs offshore and unemployment on a 90-day basis every four years, when the rest the time our policies seem to push jobs offshore for the rest of the time we work. Whether it is tax policy or immigration policy, we’d like to hire people here but the policies push them back overseas.”

Riccitiello said that the education gap has become “amazing” and that the U.S. graduates a small fraction of the number of engineers that graduate in China. He said EA will likely hire 5,000 engineers by the end of the decade, but it cannot accomplish that by hiring solely in the U.S. because there isn’t enough talent here.

“It’s frustrating for me as a CEO and frightening for me as a father,” he said.

The professors concurred with Riccitiello that the state of K-12 education was in a sorry state. Much of the blame falls not only on education but the U.S. tax code, political system, structural deficits, the costs healthcare, manufacturing policies, and immigration issues.

Willy Shih, a Harvard professor of management practice, said that manufacturing is a key sector, even though it accounts for only 9 percent of jobs, compared to 27 percent in 1950. He said that it pays to have manufacturing in the country, close to the researchers and engineers who create products, because there is a lot of innovation that takes place in creating the process for manufacturing goods. On top of that, manufacturers who make goods here are dependent upon a network of suppliers who also create nearby jobs. Intel is one of the companies that has local U.S. manufacturing, tied closely to research on manufacturing processes. It’s no secret, Shih said, that Intel is the world’s largest chip maker and it has a year or two edge on its rivals in manufacturing processes.

“Innovation requires access to manufacturing technology,” Shih said. “This is not about being patriotic. It’s a strategic question.”

The consequences of losing manufacturing can be dire. In the 1970s, few people were alarmed when U.S. tech manufacturers moved the assembly of consumer electronics goods such as TVs to other countries with low labor costs. But when those jobs left, so did jobs in related areas, such as the creation of batteries. Now, battery technology is extremely important in the design of electric cars, but you can’t source batteries for those cars in the U.S. Shih noted that the Chevy Volt electric cars he saw in EA’s parking lot use batteries that are made overseas.

The measure of competitiveness, Rivkin said, depends not only on the growth rate of the American economy but also on the standard of living for the nation’s workers. The U.S. needs to keep spending on basic research, and it needs to match that spending to the size of the problems it is tackling. Diabetes accounts for about $225 billion in healthcare costs, but the National Institutes of Health spends about $30 billion on medical research, said William Sahlman (pictured at top), professor of entrepreneurship at Harvard.

The U.S. has many things going for it, like a tolerance for risk and a culture that views failure as experimentation, rather than a crime, Sahlman said. Shantanu Sinha (pictured above, far right), the president and chief operating officer of nonprofit education firm Khan Academy, said he was optimistic about the ability to use technology (such as videos hosted on the Internet) to provide free education to everyone and to disrupt the traditional educational environment. The academy has more than 6 million visitors a month from every country in the world.

“We want everybody to have access to the same educational materials,” he said.

Mary Meeker, a general partner at Kleiner Perkins Caufield & Byers, said, “The U.S. government has only made money for five of the last 45 years. If this were a company, would you invest in it?” She added that 60 percent of the budget goes toward entitlement programs. She is excited though, that 30 percent of U.S. households have an e-book reader or a tablet.

“I believe the day is darkest before the dawn,” she said. “With the rising availability of those devices, people can learn whatever they want wherever they want.”

Kevin Sharer, the former CEO of Amgen, said he believes the U.S. is still the leader in biotechnology, with more than 90 percent of the world’s biotech industry market share. He believes that the regulation of the industry is reasonable for the most part. But he worries that the huge deficits and unfunded liabilities in Medicare, Medicaid, and Social Security will siphon off resources that the biotech industry and other industries need to continue to be competitive.

Sahlman said healthcare is 17.6 percent of the economy. We spend $8,000 per person on healthcare, $4,000 more than many other developed countries, and we don’t have outcomes that are better than other countries.

“We’re going the wrong way,” Sharer said. “If we sustain the Medicare system as is, it’s going to eat us.” Meeker concurred, saying, “Yikes. It’s going to eat us.”

“Very uplifting,” Sahlman said in response.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Doximity is on a roll! Shortly after announcing that LinkedIn’s cofounder had joined its board, the free networking tool for physicians pulled in its second round of venture capital funding.

The $17 million series B round was led by Morgenthaler Ventures, with participation from Emergence Capital Partners and InterWest Partners.

“We’ve been following Jeff Tangney and the Doximity team for more than three years,” said Rebecca Lynn, partner at Morgenthaler Ventures. “We’ve had an extensive thesis in the Health IT space for some time, and Doximity stood out as a company that is solving a significant problem in a sizable market.”

The company started as a LinkedIn for doctors, and this year it added a newsfeed feature that allows doctors to post messages to colleagues they are connected with on the platform. A smart move – Doximity has grown rapidly since securing its first round of funding 17 months ago because doctors have few other options. They cannot use traditional social networks, email, or SMS texting to discuss patients, which is considered a violation of privacy.

“Simple communications between doctors is one of the most challenging problems in the healthcare industry today,” Jeff Tangney, founder and CEO of Doximity told me.

Doximity hopes to connect doctors so that they can collaborate on cases, identify the right candidate for a referral, send private messages to each other, converse about the latest research, and gain exposure for their practice. It has experienced rapid expansion and recently announced that one in seven physicians in the United States have signed up.

The company deals with sensitive health information, so it has needed to ensure that it meets privacy standards. As founder and chief executive Jeff Tangney explained in a recent interview with VentureBeat, “Unlike traditional social media, Doximity enables doctors to securely discuss patient care in a private, closed, HIPAA-secure environment.”

Read more here about how the company is tackling the fifth-largest cause of death in the United States by reducing medical mistakes and errors resulting from miscommunication.

In May, Konstantin Guericke, LinkedIn’s cofounder, joined the board of the San Mateo-based startup. This is the kind of heavy-weight support that the company needs to compete with startups in the space: Sermo, QuantiaMD, and DocBookMD.

Doximity received its first round of funding, $10.8 million in total, from Emergence Capital Partners and InterWest Partners in March, 2011. Its chief executive, Jeff Tangney, previously founded Epocrates, a mobile medical data company.

Image credit: ShutterStock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Accomplished Silicon Valley investor Vinod Khosla likens modern healthcare to witchcraft, and says technology will replace 80 percent of doctors.

His views, offered up in a talk last week in San Francisco, sparked outrage from doctors.

Khosla is a co-founder of Sun Microsystems, and made his mark as one of the most successful investors during the Internet boom of the late 1990s with his backing of networking equipment companies.

He made the healthcare comments during the Health Innovation Summit, hosted by Rock Health, a seed accelerator company focused on health care. Khosla’s keynote talk is nicely summarized by Davis Liu, a doctor who attended the event.

Source: mddionline

Vinod Khosla talks with Wired’s Thomas Goetz

In his comments, Khosla said that medical tradition has mired doctors in voodoo-like practices.

Khosla said that machines, driven by large data sets and computations power, not only would be cheaper, more accurate and objective, but better than the average doctor. To get there, the level of machine expertise would need to be in the 80th percentile of doctors’ expertise, he said.

And then Khosla slipped in some hyperbole: “Eventually, we won’t need the doctor,” he said, according to another report of the talk.

The audience reportedly went silent when Khosla challenged anyone to disagree with him. However, after the talk, critics reading about his talk took to comments at the bottom of Liu’s piece, and elsewhere, including Twitter. Columbia University-trained doctor Bijan Salehizadeh said he was “nauseated” by Khosla’s remarks.

Khosla also upset some doctors by saying that disruption in healthcare is likely to be driven by entrepreneurs outside of the industry, rather than by specialists within.

The AliveCor monitor (for iPhone) is an example of a big-data collector

To be sure, Khosla’s provocative remarks are compatible with the lightning rod-prone Khosla we’re familiar with. When he left his former venture capital firm Kleiner Perkins several years ago, to invest in clean technology, Khosla grabbed attention and ire when he said people who advocate hybrid vehicles do so mainly to salve their conscience. Hybrids draw their energy from dirty sources (batteries, and power supply from the regular electric grid), he said, and so their contributions to a greener environment are minimal, if anything.

Khosla’s remarks about doctors aren’t entirely new, either. Earlier this year, he penned a piece titled “Do We Need Doctors Or Algorithms?” Read the piece, and you’ll see Khosla moves beyond the provocative headline, and provides a more nuanced argument about growing importance of artificial intelligence in medicine’s future. He refers to “bionic assistance” that gets better and better, and eventually replaces most doctors. But for a long time, we’ll still need to leverage the top 10 or 20 percent of doctors, he conceded in that piece.

Indeed, the criticism of Khosla’s most recent comments last week is largely knee-jerk in character.

For the most part, the reactions failed to refute Khosla’s main point about the promise of big-data for healthcare. For example, David Shaywitz, a Harvard and MIT-trained doctor wrote a piece “Why I disagree with Vinod Khosla,” but doesn’t tackle Khosla’s big-data argument. Rather, he merely disputes Khosla’s argument that change in the industry will driven by outsiders. Shaywtiz argues that healthcare domain expertise is essential to reform. But the way I read it, Khosla wasn’t  arguing that expertise wouldn’t play any role. Khosla is simply using hyperbole to get his point across. With the angry reaction, he got the stirring debate he was probably hoping for.

Other criticisms were misguided. Salehizadeh, the doctor-turned-investor, later tweeted data that showed investors in healthcare who specialize in healthcare get better returns than investors who don’t specialize. Salehizadeh presumably meant to criticize Khosla’s point that outsiders are more likely to drive disruption. However, in fairness to Khosla, he didn’t really focus on the investor side of the equation — at least as far as I can tell. For investors to put money to work, they need entrepreneurs to back. And Khosla’s point is all about those entrepreneurs, the real agents of change. In an analogy used to explain how outsiders are often more disruptive, Kholsa cited Jack Dorsey, founder of Square, who came from outside of the financial industry to help disrupt mobile payments.

(By the way, even if you do look at investments in health care, the record doesn’t look good. Shaywitz, one of Khosla’s critics, admits that the number of specialized healthcare investors has declined, in large part because of poor returns in the industry, leaving the space relatively starved of capital, and thus readily exploitable by non-specialists like Khosla.)

So if there’s any real standoff, it’s hard not to side with Khosla on this one. You’ve got to be an idiot not to see that the system needs serious change. Doctor Leslie Saxon recently penned a piece for VentureBeat, similarly complaining that the medical profession perceives too much risk in changing the medical structure. That’s why Saxon is trying to connect the more than 5 billion mobile phones in the world, in order to collect health data — which Saxon says she will use to study life patterns, identify disease, and solve endemic health problems.

Meanwhile, Liu, the doctor who chronicled his thoughts about Khosla’s remarks, also managed to look past Khosla’s hyperbole about “not needing doctors.” While doctors do need to remain part of the system, Liu insisted, “Kholsa’s criticism of the health care system is completely valid. Can we do better in being more reliable, consistent, and creating a system process and design that is comparable to highly reliable organizations and industries? Of course. …Care must be incredibly simple to access, extremely convenient and intensely personal.”

And yes, Khosla is investing in health care. During his talk, he reportedly held up a low-budget iPhone attachment that acts as a heart monitor, called the AliveCor (see image above left). Khosla’s firm Khosla Ventures led the company’s $10.5 million second round of financing in June. AliveCor company had previously raised $3 million.

Khosla Ventures also invested $1 million into Cellscope, an iPhone device that turns the phone into a microscope to diagnose ear infections.

This debate comes at a time when other IT-heavy investors are looking at health care. Khosla’s former firm, Kleiner Perkins, recently agreed to join a syndicate of investors to award $100,000 in funding to all of the startups emerging from the Rock Health accelerator. In doing so, Kleiner joined Rock Health’s existing partners Mohr Davidow Ventures, Aberdare Ventures, and the Mayo Clinic.

[Image credits: Top, Flickr: JD Hancock; MDDI]

L.A.’s thriving tech community is not letting up on its ongoing effort to make the rest of the country more fit and healthy.

Launching today, FitKit prompts you to take a free lifestyle assessment quiz and then doles out personalized guidance from nutritionists. The quiz was designed by nutrition experts Dr. Robin Bernhoft and Dr. Nick Bitz. It asks questions about how much alcohol you consume per week, stress levels, eating habits, and more.

“America is a land of malnutrition,” said Dr. Bernhoft, who recently joined the founding team. “Practically everyone has vitamin and mineral deficiencies which make them feel less energetic, get sick easier, have less endurance.”

On the backend, cofounder Josh Haynam explained that an algorithm works to “analyze and connect user’s lifestyle patterns with nutritional deficiencies” and pairs them with appropriate nutritional supplements. It’s ideal for people who can’t afford a one-on-one session with a nutritionist but are overwhelmed by the range of products on the market that claim to improve joint pain or boost immunity.

The cofounders, Haynam, Matthew Clark, Rohit Seth, and Ethan Paulson (pictured with Dr. Bernoft), hope to use technology to make nutrition more accessible. ”Health and fitness has been jaded by outrageous claims and false advertisements,” Haynam told me.

Haynam is a 20-year-old economics student at UCLA. He founded the company in three months after a football accident in which he broke two bones in his foot. During his recovery, he was prescribed a variety of supplements by several nutritionists, setting him back thousands of dollars in medical bills. But he couldn’t find transparent advice online. It was then that he hit on the idea for FitKit.

FitKit is easy to get confused with FitBit, one of many new companies vying for dominance in the personalized health space. FitBit makes money by using data about your health to tailor a fitness plan, which will likely be the monetization strategy for this company if it succeeds in growing its user-base. The companies recently partnered so you can integrate your FitKit data into FitBit’s quiz to improve its accuracy.

You’re emailed recommendations, but as of today, you can also purchase nutritional supplements directly from the site.

It’s early, but it is already evidence of traction — FitKit offered its beta to friends and family, but told me they have been garnering hundreds of signups per day and are spreading by word of mouth. It’s a recent graduate of StartEngine, a local tech accelerator. Through that program, it raised its first $20,000 in seed funding, and has grown to a team of seven people.

Haynam considers sites that specialize in selling nutritional supplements like VitaCost as the major competitors. However, in the long-term, FitKit may rival later-stage startups like WellnessFX that offer online health consultations and have pioneered a data-driven approach to health.

When I started in the healthcare field more than 25 years ago, the only thing that a healthcare IT startup needed was a good idea — a new technology, maybe, or a new scientific pathway. “If you build it, [they] will come.”

But 25 years later, a lot has changed, and startups need more than just a good idea if they want to secure growth capital to expand their business.

So, when I talk to prospective Safeguard partner companies, one of the first questions I typically ask tells me everything I need to know: “Who’s your customer?”

In a competitive funding environment, early- and growth-stage companies need to know who will buy their product; whether or not that customer is going to pay for their product; and why that customer would be willing to pay for it.

The paradigm shift

“Build it and [they] will come” is no longer an effective business strategy, especially in healthcare IT, where the complicated web of payment and reimbursement has blurred this formerly simple equation. Innovation and the “next big idea” have shifted from a push model to a pull model, andstartups need to adapt to that.

Some companies — like Apple — aren’t affected by this paradigm shift, as they effectively control their market. An example that’s closer to home is Avid Radiopharmaceuticals. Avid creates diagnostic molecular imaging tests for neurodegenerative diseases like Alzheimer’s disease. Avid developed its imaging tests with no specific customer in mind, believing that the ability to rule out an Alzheimer’s diagnosis was valuable. Eli Lilly confirmed that value when it acquired Avid in late 2010 for $300 million upfront, plus an additional $500 million in contingent consideration (payable upon the achievement of future regulatory and commercial milestones).

But the push model in healthcare IT is risky and expensive. Entrepreneurs improve their chances of success if they work to understand unmet market needs, not just what they think the market wants. Unless there is a “pull” from customers, patients, providers, or payers, an entrepreneur inhealthcare IT won’t be able to capitalize on just a good idea.

Identify your customer and what you can do for them

Who are these so-called customers? Big picture, they might include patients (consumers), providers (doctors, hospitals, etc.), and payers (employers, insurance companies, and government entities, including Medicaid and Medicare). The customer mix will vary for each company depending upon the specifics of the business.

A lot of IT ideas make sense, they aim to make healthcare faster, better, or cheaper. But startups need to determine who benefits economically and when. When startups seek venture capital financing, they should gear their pitch toward ROI as it relates to their customer.

Think about the following questions:

• What is it worth for employers to have a healthier workforce in terms of productivity, for example?
• What is the value of decreasing compliance with therapy or keeping patients out of the hospital?
• Is that ROI calculation backed by data or does it have to be proven to a benefits administrator or payer?
• What problem are you solving for the customer?

For example, Medivo implemented a pull model around patient health management. It enables patients to order lab tests online and better understand the test results so they can be diagnosed early, appropriately treated, and monitored. Physicians and patients both benefit from this service, but neither is an ideal customer.

Instead, Medivo targets payers and biopharmaceutical and medical technology companies, all of which benefit from successful interactions between patient and physician. Those interactions help doctors correctly diagnose ailments and encourage patients show up for appointments and adhere to appropriate therapy. As a result, Medivo has had customers virtually from the start, one of the reasons why Safeguard was attracted to the company.

Understand your customer and the industry

Even after identifying the customer, healthcare IT startups face another challenge: no one really truly wants to pay. Consumers certainly don’t want to pay out of pocket. Providers are dealing with shrinking reimbursements, which limit the dollars they want to part with. Private payers strive to remain financially competitive. Medicare is dealing with growing entitlements. Sales cycles are long. Customers can be monolithic, and it’s important to identify an advocate within some of these large organizations.

Another issue is that technology, reimbursement, and policy change over the protracted timelines for biopharmaceutical development. And most of the solutions being proposed are incremental at best. Traditional biopharmaceutical development typically follows a push strategy. But no matter how much startups understand the problem and how good the solution, the time to market is relatively long, and the market will most likely change by the time these companies get there.

In this space, the pull model generates technologies that enable more accurate use of biopharmaceuticals or medical technology. These are potentially shorter term solutions that improve outcomes, decrease suffering, and save money. A lot of diagnostic testing as well as faster and cheaper DNA sequencing fall into this category.

Looking forward

In spite of the obvious economic and societal benefits, general adoption of health and wellness is slow. But in the not-too-distant future, much of this will truly matter. Healthcare reform and increasing costs will demand solutions. ROI will become more apparent. We will be not only personally rewarded for staying healthy, but economically rewarded as well. Physicians and other providers will also benefit by keeping us well or managing our illnesses in a more cost-effective manner. It’s just a matter of time until the ability of the tools at our disposal intersects with serious demand for better outcomes.

So bottom line for all you entrepreneurs out there in healthcare IT: Create a target product profile, and then figure out who your customer is. Identify the customer very early on in the process. If you want to improve your business’s chances of success and funding from angel investors and venture capitalists, keep asking yourself, “Who’s our customer?”

Dr. Gary Kurtzman is the managing director of Life Sciences at Safeguard. He has more than 25 years of experience in operations and investments, leveraging his medical expertise to enable businesses to enhance their products and grow their services, as well as to discover new partnering potential in developing entrepreneurial companies. Check out more posts like this at the Safeguard blog.

Health tech image via Shutterstock

MyHealthTeams, a San-Francisco social networking website that aims to connect people suffering with a variety of health conditions, has pulled in $1.75 million in funding from private equity investors Adams Street Partners and 500 Startups.

Research has shown that 1 in 2 Americans are living with a chronic condition. MyHealthTeams was founded in 2011 as a community-focused site for parents of children with autism.

MyHealthTeams focused its efforts on autism first, as one in 88 children in America is diagnosed with symptoms of autism. After launching in June 2011, the autism social network already has 26,000 registered parents from all across the country. The company is following the same strategy for other chronic conditions and diseases.

“There’s not going to be a Facebook for health,” said Eric Peacock, the company’s founder. “There’s going to be something better, but there will be one for autism, and one for breast cancer, and one for diabetes, and so on.”

Today, MyHealthTeams has launched the MyAutismTeam mobile app, where members can recommend local businesses to suit the needs of those with autism. The iPhone app is available for free. In my opinion, the app is an important step as it is a highly tedious and painful process for people with disabilities to find local businesses that cater to their needs, whether it’s taxi companies that accept guide dogs, or drive-throughs that cater to the deaf and hard of hearing.

There are already myriad national associations to support people with specific disabilities, but Peacock claims that none of them focus on these social and local aspects, “the part where a person actually takes action to tackle their condition.”

Peacock told me the company will make money by leveraging the large numbers of parents signed on to the platform, by offering them discounts on the sales and products they need. Peacock hopes that provides of these services will be willing to split the revenue share.

MyHealthTeams plans to grow and reach new patients by partnering with the medical community. “Within the next five years doctors may be prescribing this type of resource directly to their patients at the time of diagnosis,” said Mike Lynn, a practicing physician and a partner at Adams Street Partners, in a statement.

Image via Shutterstock

The app, Care4Today, keeps track of patients’ prescribed treatment regimens and pushes out timely reminders about taking medication, refilling prescriptions, and making appointments. Care4Today is a secure platform and is compatible on most smartphone devices.

Janssen Healthcare Innovation is a team within the Janssen Pharmaceutical Companies of Johnson & Johnson. Clearly, there’s money to be made in encouraging people to take their prescribed drugs.

A study conducted by the New England Healthcare Institute states that over one-third of patients in the US do not take their medications properly. In addition to compromising the effectiveness of care, this phenomenon is also expensive. Poor adherence to treatment means a higher likelihood of re-hospitalization, recurring illness, and even death. The study found that among diabetes patients, those who were erratic with their treatment racked up twice as much in healthcare costs as people who followed directions.

Giving people accessible tools to manage their medical needs is an important step in healthcare reform. While this initiative may be beneficial for business, the app is not limited to Johnson & Johnson products. It allows for any kind of prescription or over-the-counter medication and even supplements. Other medication reminder apps include The Pill Phone, Medlog, Medsy, and Dosecast.

If you have to spend money on pharmaceuticals, you might as well take them properly. I wonder if this includes Flintstone vitamins.