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Wednesday, April 28, 2010
Connected health offerings aim to shake up health-care industry
By Galen Moore
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Insurers and doctors have had their say on Capitol Hill. But Dr. Joe Kvedar wants to put another interest group in the driver’s seat of health-care reform: IT executives and entrepreneurs.
Since its founding in 1996, Kvedar’s Center for Connected Health has grown to a staff of 40 inside the Partners Healthcare system. An eclectic mix of physicians, software developers, product managers, video technicians, Web consultants and business executives, the center’s aim is to change health-care delivery.
The company’s first spinoff, a managed health-care company it’s calling Hopskipconnect, is near closing a $5 million Series A round of venture capital, Kvedar said. The product, incubated with pilot customers EMC Corp. (NYSE: EMC), is designed to let large employers manage employee wellness, starting with remote blood pressure monitoring.
Hopskipconnect has hired a CEO, Rick Lee, formerly of Magellan Health Services Inc., and completed the licensing of its core technology, which was developed inside the Center for Connected Health, Kvedar said.
“For greater than 99 percent of health-care services to get done you have to travel somewhere and visit someone in a room,” Kvedar said. “We have asked for 14 or 15 years, ‘Why is that so? Is it really true that everything we do in health care needs to be done through an office visit or in an emergency room?’”
Funding for the startup may be just the beginning, as health-care reform legislation signed into law in March identifies a handful of programs related to connected health that the federal government will look to support — including accountable care, demonstration projects for bundled payments and patient-centered medical homes.
Liam Donohue, managing director at Boston VC firm .406 Ventures, said connected health can be a challenging space. Last year, Donohue led his firm’s participation in a $7.5 million round of financing for WellAWARE Inc., a Charlottesville, Va., developer of home health monitoring systems. Donohue had a successful exit in a similar space with his previous firm, Arcadia Partners — a $775 million acquisition of Boston’s Health Dialog Services Corp. by London-based BUPA.
Home health care promises to reduce the cost of care, Donohue said – but the challenge is to reduce the reporting action required by the individual patient. As the level of required participation increases, the potential for return on investment falls, he said.
“If you have a technology to monitor somebody that requires them to do anything — if they have to check in or input data or stand on a scale — you tend to have adverse selection in your population,” Donohue said. “What happens is you get the people who are the most compliant…It turns out that the people who are most compliant are also the least sick. They’re the least likely to fall off track.”
Kvedar is concerned not only with reducing health costs but actually improving the quality of care through automation and remote connectivity. He said the people at the Center for Connected Health would like to expunge the word “schedule” from the medical vocabulary.
“We like the idea of continuous care, and we’ve shown that it can be really effective,” he said. “Viewing data sets at a population level and then drilling into someone or even a cohort of individuals who’s not doing well, we’re just starting to realize how powerful that can be.”
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