How Technology Is Designing the Future of Health Care
How technology is designing the future of health care
UNDERWRITTEN BY TABLE OF CONTENTS
01 Former Google CEO Schmidt says 17 The Future of Life Sciences and AI ‘will have its biggest impact’ in Healthcare — Transform Patient health care Experience with Adapting Digital Technology like Hybrid Cloud and AI
04 ‘More Amazon and less pharmacy’: one exec on the company’s strategy for prescription drugs 21 How digital pharmacies can expand access to specialized care
07 Measuring blood sugar in real time is a game changer for patients — 23 There’s a gold rush in health tech. and a health tech success story Here’s how the smart money stays ahead
10 How Cityblock Health is tapping into technology to better care for 25 Illumina CEO insists GRAIL merger Medicaid patients will be good for competition, and ultimately, patients
14 From big tech to small tech: A health care visionary pushes for 28 Amazon, Salesforce execs weigh in a patient-centric approach to on how tech can help with Covid — technology and how it can’t
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HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE INTRODUCTION How technology is designing the future of health care
The Covid-19 pandemic has ushered in a new era of medicine. More care than ever before is being delivered virtually. Consumers can add medical tests and prescriptions to an online cart and have them speedily delivered directly to their homes. New technologies can monitor cases of infection in a city and warn of a coming surge.
All the while, tools that were being deployed before the pandemic have continued to advance at a rapid clip. Researchers are turning to artificial intelligence to do everything from catch breast cancer to predict which hospitalized patients will deteriorate. The cloud is continuing to transform how health care data is stored, shared, and mined for insights. Technologies like continuous glucose monitoring are changing the way that a growing number of people manage their diseases. All face hurdles and pressing questions as they are adopted more broadly.
Those advances were front and center at the STAT Health Tech Summit, where experts working at the intersection of tech and health care came together onstage to discuss how they’re designing the future of health. These stories illustrate the breadth of those conversations, and the depth of work happening as Silicon Valley giants and upstarts alike try to make their mark in health tech.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE LETTER FROM OUR EDITOR Former Google CEO Schmidt says AI ‘will have its biggest HEALTH TECH HEALTH impact’ in health care
By Andrew Joseph | MAY 11, 2021
For the myriad applications of artificial intelligence, Eric Schmidt, the onetime Google CEO, sees one area where it’s poised to unleash the most sweeping changes.
“When I try to market the importance of AI, I say that AI will have its biggest impact in biology and health, because biology is so complicated,” Schmidt said Tuesday at STAT’s Health Tech Summit.
But to fully unlock AI’s full potential, there need to be policy changes, Schmidt said in a conversation with Linda Henry, the CEO of Boston Globe Media Partners, STAT’s parent company. For example, people generally have to agree to let their anonymized health data be used for research purposes, but that limits how much information is available for algorithms to glean insights from — and in turn how much can be learned about human health, Schmidt argued.
“I’d like the privacy rules to be changed so it’s opt-out for research,” said Schmidt, the co-founder of Schmidt Futures who in June will take over as board chair of the genetics powerhouse the Broad Institute.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 1 | 01 Schmidt continued: “All the big health care systems have a great deal of information about their patients, and those, properly, are controlled by HIPAA and lawyers and so forth and so on, so if you want to do research, you can do research with 50 people or 100 people, but it’s very hard to get a large, population-wide study that’s big enough for these algorithms to really play off.”
He made it clear he does not feel the data privacy rules should be changed for commercial or other uses.
Only with AI and machine learning can scientists tackle the massive data quandaries that biology poses, Schmidt argued. He highlighted, for example, a project Broad scientists are involved with that aims to understand how cells communicate with each other, “so we can discover the language of life.”
“The only way to do that is to take a large amount of experiments and then use AI to look for patterns that are not apparent to you and me,” Schmidt said. “Because people have already looked at them — they haven’t seen them — but the computer can see them.”
Schmidt also paid tribute to Eli Broad, the philanthropist and founder of the Broad Institute, who died April 30. He said Broad deserved “a fair amount of credit” for helping build the scientific and biotech hub of Kendall Square by establishing and endowing a research center that brought together the area’s top scientists.
“Eli Broad took a pile of money and put it on top of a building,” was how Schmidt said he simplistically described Broad’s contribution. But in doing so, he created an opportunity for faculty from Harvard and Massachusetts Institute of Technology and affiliated hospitals “to compete for labs and money and so forth because they could build an interdisciplinary solution inside the Broad.”
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 1 | 02 During the conversation, Henry also raised Schmidt’s unforeseen role in the formation of STAT. In 2014, Henry’s husband, John Henry, attended a dinner hosted by Schmidt where attendees discussed why Boston was losing out to Silicon Valley as the country’s preeminent tech center. Henry then realized that Boston’s dominant role in the life sciences was a story that was not, as he later wrote, “being covered by a serious, standalone news organization committed to the kind of in-depth journalism that has been a hallmark of The Boston Globe,” which Henry had purchased about a year before Schmidt’s dinner.
That dinner, Linda Henry told Schmidt on Tuesday, served as the inspiration for STAT’s founding.
“You guys did the work,” Schmidt replied. “Thank you for the credit.”
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 1 | 03 ‘More Amazon and less pharmacy’: one exec on the company’s strategy HEALTH TECH HEALTH for prescription drugs
By Kate Sheridan | MAY 12, 2021
Amazon’s objectives for its nascent pharmacy business are straightforward: “better selection, better convenience, and better prices,” according to TJ Parker, the vice president of pharmacy at the company.
“It really is the Amazon playbook,” he said during a Wednesday panel at STAT’s Health Tech Summit.
Parker joined Amazon from PillPack after the logistics and online shopping giant bought the company in 2018; Parker was PillPack’s co-founder and CEO.
Then a small, New Hampshire-based outfit, PillPack was known for pre- packaging pills into pouches, hoping to make it easier for people to keep track of their medications. At the time, experts saw the $743 million acquisition as a potentially disruptive move from Amazon into the highly regulated world of prescription drugs.
But in the years since, PillPack’s team — now Amazon’s pharmacy division — went silent and largely flew under the radar. Over the last few months, that has changed.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 2 | 04 In November, Amazon formally unveiled its new division. And on Wednesday, Parker detailed the division’s strategy in his first public speaking engagement in more than 2 1/2 years.
“Customers really want more Amazon and less pharmacy and so our work from here is to make pharmacy truly as seamless to us as amazon.com [is] for other categories,” Parker said.
Among Amazon’s latest offerings:a new price-comparison tool for medications, which launched Tuesday.
Now, when someone searches for a prescription drug on Amazon, Amazon Pharmacy’s price for a drug is listed alongside the cost for Prime members at other pharmacies like CVS, Walgreens, Walmart, and Costco. (When STAT searched for several different popular medications with the tool’s default settings, Amazon Pharmacy was always the top choice — even when it wasn’t the lowest price — although sorting results by price is also offered.)
Allowing people to compare the prices of drugs before they commit to a pharmacy is a novel idea, Parker said. “Usually, the customer shows up at the counter, they have no idea what it’s going to cost until they get there.”
Prime members will also be able to compare the price of a drug based on their insurance coverage to the price with a prescription savings card from Amazon. Inside Rx, an offshoot of pharmacy benefit manager Express Scripts, administers that card.
Before becoming a part of Amazon, PillPack had a tense relationship with Ex- press Scripts and other pharmacy benefit managers. In 2019, Surescripts threat- ened to eliminate PillPack’s access to critical patient data; in 2016, PillPack and Express Scripts reportedly had a separate dispute that was ultimately resolved.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 2 | 05 Things are different now, Parker said. While the relationships between com- panies in this space may once have been “antagonistic and zero-sum,” he said, “if other partners — whether it’s a large PBM, or a payer, or pharmaceutical company — want to offer something that’s better for customers, we are willing to and are partnering with a number of different folks to make that possible.”
It doesn’t hurt that PillPack now has the weight of Amazon behind it, either.
“I certainly sleep a lot better than I used to sleep,” Parker quipped.
The PillPack acquisition was hardly Amazon’s only foray into health care in the past three years — though some efforts have proven more successful than others. With JP Morgan and Berkshire Hathaway, Amazon was one of the founding companies of Haven, a health care startup that folded in January.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 2 | 06 Measuring blood sugar in real time is a game changer for HEALTH TECH HEALTH patients — and a health tech success story
By Elizabeth Cooney | MAY 12, 2021
Kylene Redmond and Deb Foerster both are converts to their continuous glucose monitors, quarter-size devices that measure their blood sugar in real time so they can adjust their diet, their activity, and the medications they take to manage their diabetes.
The automated sensors give both women feedback they can use to better control their disease and manage their daily lives, they said Wednesday at the STAT Health Tech Summit, making the devices a bellwether for other wearables beyond diabetes that are gaining traction in both consumer and clinical markets.
“It was such a game changer,” Foerster said. “I do very closely monitor what I eat and what it does to my body as I eat, so I’m better able to make more informed choices.”
Foerster has type 2 diabetes, the much more common form of the disease in which people can’t make enough insulin to convert glucose into the fuel their cells need, or they grow insensitive to the insulin they do make.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 3 | 07 Redmond, who has type 1 diabetes, relies on an insulin pump to supply what her pancreatic islet cells no longer produce, restoring her ability to process glucose and keep the sugar from accumulating to harmful levels in the blood.
Both Foerster and Redmond said they heard about the glucose monitors long after they were diagnosed. For Redmond, “being able to literally see my numbers in real time was something that I wish that they definitely put me on earlier on in my diagnosis. Once I became more active in the [patient] community is when I found out about this technology.”
Redmond can stay in tighter glucose control with her Dexcom G6 and Forester has been able to cut down on her diabetes medications after becoming more active and losing 53 pounds with her Abbott FreeStyle Libre monitor.
Kevin Sayer, CEO of Dexcom, said at the Summit that the company plans to build on its early wins, in part by listening to what patients like Redmond and Foerster want. One of health tech’s success stories, the company will bring in $2 billion in revenue this year, he said, citing Wall Street estimates.
The tape used to stick the device to patients’ skin, is an example. “If I put a room of Dexcom users together, you’d get four or five different answers: too sticky, it’s not sticky enough, it’s just right, it makes my skin itch, it’s horrible,” he said. “And so we experimented with tapes. I think our next product the G7 will solve quite a bit of the things they talked about.”
“The G7 is much smaller, it’s very connected, the footprint on your body is smaller,” he added. … “The accuracy will be there and it will be better than our previous products.”
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 3 | 08 Looking further ahead, he said the company hopes to use patient data to start offering predictive capabilities. “I believe there’s a lot more data to mine than we have mined, and there’s a lot of smart people that can do things with this,” he said.
Collaborating with other health tech companies to offer more information to patients and work more closely with caregivers in the clinical setting is also a goal, working within tight FDA regulations.
“We don’t have worldwide integration with any of the big [electronic health record] systems, but boy, it’s something we’re working on and we’d love to get there,” he said.
Sayer’s not afraid to try other company’s wearables.
“My wife always makes fun of me — I wear sensors all the time,” he said. “I woke up one morning and I had four sensors on my body. She said, ‘This is enough! Stop!’
“I think we will see the day when we incorporate data from the Oura ring or your wristband or whatever into our app.”
One challenge may be beyond Dexcom’s grasp. Redmond said far too many patients can’t get the cost of the glucose monitors covered by their insurance — if they even hear about the devices.
“Anyone who is diabetic who goes to the health care system that I go to, that’s a part of our program, but clearly that’s not standard care across everyone’s health care system and insurance,” Redmond said. “And then some people just don’t get the information. They don’t know about the technology.”
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 3 | 09 How Cityblock Health is tapping into technology to better care for HEALTH TECH HEALTH Medicaid patients
By Shraddha Chakradhar | MAY 12, 2021
Health tech startup Cityblock Health, with its mission of delivering stepped- up primary care to Medicaid patients, is finding its footing in the very cracks that the Covid-19 pandemic has exposed. It’s leveraging its signature technology to help this highly marginalized population.
“It’s very telling here that up until before the pandemic, there was a real unspoken belief that you couldn’t [digitally] engage low-income folks, folks who don’t have smartphones readily available, folks who don’t have money for big unlimited data packages,” Cityblock’s co-founder and chief health officer Toyin Ajayi said during a Wednesday panel at STAT’s Health Tech Summit. “Very, very few folks are really engaging in the hard work of designing tools that bridge the digital divide … and from the outset, we saw a lot of potential here.”
The basic idea behind Brooklyn, N.Y.-based Cityblock, which was launched more than three years ago and carries a billion-dollar valuation, is not new: To keep patients healthy and out of the hospital — and cut costs — care is delivered by a coordinated team of providers that includes not only health professionals such as physicians and nurses, but also social workers who can help identify other factors that play a role in a person’s health, such as housing, education, and income.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 4 | 10 Updating this idea is Cityblock’s new technology platform, which it calls Commons. It brings together these different professionals so that they can make notes, troubleshoot problems, and share takeaways in real time to help patients.
“It allows us to facilitate interdisciplinary team care in a way that [electronic health records] just haven’t done,” Ajayi said.
Beyond that, Cityblock thinks of technology as “an enabler of a model of care as opposed to the solution in and of itself,” Ajayi said. It’s also using technology to meet people where they are.
“If folks are texting and using SMS, that’s when we’ll meet you,” Ajayi said. “If folks are much more interested in using telephone care and video care but with coaching and support, then we’ll meet you there, too.”
Iyah Romm, Cityblock’s CEO and other co-founder, said that this “meeting” often means thinking differently about the questions and processes that drive the design of their technology platform.
“Health care for our population is not about just your diabetes medications or whether your doctor shows up on time,” he said, adding that it’s about feeling safe at home or having transportation to and from the pharmacy, child care, and jobs. “Part of our design thinking is building a health system that meets all of those health needs, which is a fundamentally different way of approaching software development.”
Ajayi recalled the story of one Cityblock user, a 60-year-old grandmother who has been struggling to manage her diabetes. “She said to me at some point, ‘Look, doctor, if you, if you just Snapchatted me when I need to take my insulin I’d remember it,’” Ajayi said. The takeaway: This grandmother was using Snap- chat with her grandkids and meeting them where they were, so for Cityblock, it underscored the message, “If that’s the tool you need, so be it,” Ajayi said.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 4 | 11 In another example, one man who became more tech-savvy through receiving care from Cityblock was also able to use those skills to cope with the isolation of the pandemic.
A couple of years ago, this patient couldn’t text. “Now, you can’t stop him,” Ajayi said. “He’s texting, he’s sending videos and photographs, and he’s connecting with his family and his community. It kept him sane and healthy during the pandemic, and so it becomes a tool that you can use to deploy so much more than just reminders and in your traditional health care.”
For Cityblock, the pandemic’s outsized impact on vulnerable communities has helped to crystallize the company’s mission.
“If there’s one lesson, it’s that care [that is] constrained by place, your ability to come to a clinic of all random and arbitrary things, by time of day, your ability to pay, [and] by your insurer is not going to meet the needs of the population as a whole,” Ajayi said. “Models that allow us to innovate, to flex to meet people where they are, to show up for them 24/7, to intervene and to invest in a holistic experience of care — that is the way that our health care system ought to be designed for the future.”
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 4 | 12
From big tech to small tech: A health care visionary pushes for HEALTH TECH HEALTH a patient-centric approach to technology
By Casey Ross | MAY 11, 2021
Each step in the career of Ashwini Zenooz is less comfortable than the last. She started as a radiologist, moved to toil over government medical records, and then took a leading health care role at the cloud technology company Salesforce. Now she is joining a California startup called Commure, hoping to agitate for the change that has eluded her.
“We have been working fast and furious for the past few years to try to solve some of the pain points” in health care, Zenooz said at the STAT Health Tech Summit, where she announced her new role. “We’re seeing such great innova- tion, but no one is connecting all the dots and thinking about the experience of the end user.”
That is the raison d’être of Commure, the company she’ll help lead as president and chief medical officer to build a new, standardized framework for compiling and sharing health data to better serve patients.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 5 | 14 The San Francisco company was conceived and launched in early 2020 by the venture capital firm General Catalyst, which needed a data platform to serve a growing portfolio of digital health companies such as the health insurer Oscar and Livongo, a digital provider of chronic disease care acquired by Teladoc.
Forced to build their own technology ecosystems, these companies threatened to add to the disjointed jumble of electronic health record (EHR) products used by hospitals and other bricks-and-mortar providers.
“The bottom line is you need a fundamentally new infrastructure that sits next to the EHR, which was built for different purposes — running billing and compliance,” said Hemant Taneja, a managing partner at General Catalyst who founded Commure. “We started by working with health systems that were sort of living this pain.”
He met Zenooz for a casual cup of coffee last year and came away convinced that she was the right medical leader for the company. “She’s one of the rare people who’s been in the belly of the beast on both sides” of health care, Taneja said, referring to her work to modernize health records within the U.S. Department of Veterans Affairs and build novel products at Salesforce. “What was clear to me was that we were very like-minded.”
Zenooz said her desire to change health care technology was driven by personal experience. A decade ago she left her job as a radiologist to care for her mother, who had ovarian cancer.
Even as a health care professional, she found herself unable to navigate the system. At 2 a.m. one morning, her mother’s tongue turned black from a medication she was taking. Zenooz wanted to send a picture to her provider or do a quick video call to make sure it didn’t require urgent attention.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 5 | 15 “They said, ‘No, you have to bring her in,’” Zenooz recalled. “I just remember carrying this 79-pound woman into the emergency room and thinking: This should not happen.”
The health care system, she said, was perfectly capable of serving patients with technology, but was simply not motivated to do so. It was content to rely on fax machines and CDs to transfer patient records, and to force patients to search for the best care in the dark.
“The limitation is not the technology,” she said. “It’s the incentives, the reimbursements, the regulations. We need to focus on people.”
How Commure will bring about that change is a work in progress. Starting several years before its official launch, a team of engineers, now numbering around 150, began building a software platform based on the standard known as FHIR to help providers build applications to serve their patients.
The goal is to help customers create products in a common technology language, so that information and insights can be harnessed across different tools to establish seamless service for patients. Zenooz said the company has been working with clinical leaders from its beginning and intends to serve both digital health clients and traditional health care entities.
“We’re working on an open platform,” she said. “We want to work toward connecting all the dots and I see the opportunity here to make this happen.”
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 5 | 16 The Future of Life Sciences and
SPONSOR Healthcare — Transform Patient Experience with Adapting Digital Technology like Hybrid Cloud and AI
The Covid-19 pandemic has put a strain on healthcare systems worldwide. At this year’s Health Tech Summit, IBM was given the chance to conduct primary research regarding the technological landscape of our current healthcare environment. The only way to improve the healthcare system is to first identify what is wrong.
Patient engagement is a substantial barrier in the adoption of healthcare tech- nology. Are organizations slow to adopt solutions that get patients involved in their own health? Or are current health platforms limiting interaction between industry, providers, and patients? Different roles in the healthcare and technology ecosystem provide different perspectives on these key issues.
The industry can agree on one thing: changing healthcare is hard. It will take orchestrating payers, providers, pharmaceutical companies, and technology companies to improve health outcomes and patient engagement. IBM is ready to help with solutions built on Salesforce and powered by IBM cognitive tech- nology (AI, ML, Blockchain, IoT).
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 6 | 17 What has the pandemic taught us about the obstacles to patient engagement?
5% 12% Experiences in health care are not personalized
Patients don’t receive enough support
16% Health platforms don’t drive interaction between industry, providers, and patients 39%
Organizations are still slow to adopt solutions that get patients involved
Organizations fear higher operational 27% cost and complexity
Smart devices could help monitor patients’ health. What are the major challenges to using these tools?
16% Patient adoption 31% Concerns on privacy and security
Regulatory barriers
Lack of interoperability
11% 44%
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 6 | 18 AI has largely underperformed in the health- care industry so far. Why do you think that is?
29%
Lack of understanding organizations
37% There’s not enough data
Unclear regulatory environment
No business case
13% AI is not mature enough to improve health care 10% 13%
Telemedicine has gained momentum during the pandemic. How do you think its adoption can be increased further?
24% 28% Create access to therapies
Develop better technologies
Providers need to drive
9% Better guarantee privacy and security
8% Reduce regulatory barriers
31%
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 6 | 19 Which trend will have the biggest impact on how medical device organizations sell products?
5% 15%
Virtual selling becomes the new normal for sales reps
Consumers will use wearables and consumer direct devices 38% Data driven, actionable insights allow targeted selling
Smart tools to enable better inventory management 43%
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 6 | 20 How digital pharmacies can expand access to specialized care HEALTH TECH HEALTH By Mario Aguilar | MAY 11, 2021
Even the most aggressive proponents of telehealth must concede that while technology can open the door to health care for some, it can also become an obstacle for others.
“It’s true, the technology is not accessible to everyone,” A.G. Breitenstein, the CEO and co-founder of FOLX Health, said Tuesday at the STAT Health Tech Summit. “But it’s a lot more accessible than the system that we have today.”
In particular, technology can make it easier for people to access care that often comes with barriers. Breitenstein — whose company specializes in care for the queer and trans communities — posed the example of a trans person seeking care in a rural setting.
“They’ve got to find somebody who’s willing to treat them, who will treat them with respect, who understands their bodies,” Breitenstein said. “They’re probably going to have to drive three to four hours to get to them.”
Even if that patient is able to find a provider, the existing health care system is likely to create a lot of unnecessary impediment and expense. An alternative like FOLX, which is entirely virtual, might prove logistically preferable and more affordable.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 7 | 21 Another panelist, Thirty Madison co-founder and chief executive Steven Gutentag, pointed to Cove, his company’s offering for people who have migraines.
“There are 40 million people in the United States who suffer from migraine,” he said. “There are fewer than 500 physicians who specialize in it.” The result, Gutentag said, is that many patients are treated either by their primary care physicians, or end up seeking care for especially bad migraines in the emergency room.
“From a cost perspective, obviously the impact individually, but also on the health care system, is quite incredible,” said Gutentag. “And when patients come to Cove, for many of them, it’s the first time they’re getting a specialist migraine-focused care experience.”
During the pandemic, much has been made of telehealth’s ability to replace common health care interactions. But as digital pharmacies and other forms of virtual care evolve, getting people access to the precise care they need and expanding the reach of specialists may be an equally important payoff.
“That’s actually one of the benefits of having technology as part of this. … It creates the opportunity to create more focused communities, more focused offerings, and more tailored offerings to really both make people feel heard, address their concerns, make people feel comfortable sharing their concerns,” Gutentag said. “And I think that’s why you’re seeing different approaches come to market right now.”
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 7 | 22 There’s a gold rush in health tech. Here’s how the smart HEALTH TECH HEALTH money stays ahead
By Damian Garde | MAY 12, 2021
Investors are pouring into the health tech sector, with venture funding roughly doubling in 2020. That’s good for individual companies, but when valuations begin to depart from reality, it takes discerning investors to pick winners in the space.
“It wasn’t always such a clear return profile, and there was a lot of skepticism,” Deena Shakir, a partner at Lux Capital, said Wednesday at the STAT Health Tech Summit. “But now everyone’s jumping on the train.”
That means the world’s private equity magnates and hedge fund managers, once focused only on late-stage investments, are getting involved earlier and earlier in the funding cycle. And they’re suddenly competing with the likes of Oak HC/FT, which can lead to some “eye-popping” valuations, said Annie Lamont, co-founder and managing partner of the venture firm Oak HC/FT.
There’s plenty of opportunity to go around, Shakir said, but what differentiates good investments from vaporware is a clear case for how a given app, device, or service can make a difference for patients, physicians, and providers.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 8 | 23 “For someone who’s just dipping their toes in health care, it’s a lesson they have to maybe learn the hard way,” Shakir said. “It’s not always just about the idea or some patented IP or a molecule. The business model matters. The engagement with these different stakeholders matter. Understanding, ultimately, who’s paying and how they’re going to pay matters.”
Despite the rush of venture funding into the sector — $14 billion last year, according to Deloitte — there’s still value to be created in the startup scene, the investors said. Lamont said there’s huge potential for technologies that can address cost and risk. The majority of health costs stem from primary care, Lamont said, creating a massive need for tools that can help those physicians make decisions that both limit patients’ risk and avoid the extraneous costs of unnecessary procedures.
“That sort of knowledge, and incenting primary care docs to have the infor- mation to do the right thing, that dramatically changes the cost of care, and improves care,” she said.
Shakir has been looking closely at the women’s health space, particularly efforts focused on contraception, fertility, and menopause. The field has been historically under-funded because of “a myopic view of what the market looks like,” Shakir said, which creates opportunities for investors who understand the needs of patients and providers.
“Women control 80% of the dollars in health care, and it’s 50% of the popula- tion, and yet somehow it’s still seen by some as a niche market, which just blows my mind,” she said.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 8 | 24 Illumina CEO insists GRAIL merger will be good for competi- HEALTH TECH HEALTH tion, and ultimately, patients
By Megan Molteni | MAY 11, 2021
Before the pandemic, most people had never heard of Illumina, the California- based sequencing behemoth whose machines generate upwards of 90% of the world’s DNA data. And while Illumina might still not be a household name, over the last 15 months the technology it sells has become standard dinner table fare. Genetic vaccines, coronavirus variants, wastewater surveillance — never before has the world of sequencing spilled over so forcefully into mainstream public consciousness.
“People are talking about mutations and variants, it’s now become part of the public lexicon,” said CEO Francis deSouza said Tuesday at the STAT Health Tech Summit. “I think it’s accelerated the field by maybe five years, because genomics has been instrumental in this pandemic from the very beginning.”
In December 2019, Illumina teams were called into Wuhan to help local authorities identify the source of the outbreak of a mysterious pneumonia, said deSouza. From there, samples were sent to Shanghai, where Illumina’s scientists worked with researchers there to sequence and publish the first viral genome in early January. The next day, Moderna and BioNTech began using that genetic blueprint to start developing Covid-19 vaccines.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 9 | 25 The pandemic has also accelerated other innovations in healthcare — from telemedicine to remote patient monitoring to the rise of at-home-testing. That’s another place where Illumina sees its business growing, specifically with its planned acquisition of leading liquid biopsy company GRAIL, which has been challenged by U.S. and European regulators.
Ilumina formed GRAIL in 2016 with $100 million in financing, including from Bill Gates and Jeff Bezos, before spinning it off a year later while retaining a 14.5% stake. But a full takeover would deepen its reach into the clinical testing market, which Illumina estimates could reach $75 billion by 2035.
GRAIL has spent the past five years developing Galleri, a blood-based test that screens for 50 different kinds of cancer. In March 2020, the company demonstrated that Galleri can also pinpoint where the tissues where the tumor is lurking 93% of the time.
Last fall, shortly after GRAIL went public, Illumina announced plans to re- acquire its former spinout for $8 billion. But the Federal Trade Commission quickly stepped in to block the deal, arguing that the move would allow Illumina to stifle competition in the nascent but crowded liquid biopsy industry. Less than a month later, the European Commission’s directorate general for competition launched its own investigation. Illumina is currently fighting back against both.
“We believe that by acquiring GRAIL, in the end, it will be procompetitive for that category as it emerges,” said deSouza. That’s because he sees Illumina as a trailblazer — when it comes to both regulatory approvals and reimbursement for liquid biopsy tests — that can establish a path for the rest of the industry to follow behind.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 9 | 26 deSouza pointed to what happened in 2013, when Illumina acquired non- invasive prenatal testing company Verinata Health. Industry analysts fretted over a potential Illumina takeover of NIPT testing. Instead, “the number of players in that space went up, the number of tests ordered by expectant numbers went up, and reimbursements went up,” said deSouza.
“We’ve seen that play out before and that’s what we want to see for cancer screening. We think there’s room for many different types of tests in this space,” he said.
GRAIL, for its part, is set to launch a laboratory version of its cancer test in the coming weeks. Illumina’s footprint in more than 140 countries could facilitate a faster and farther-reaching rollout of the test, he said. But to get broad distribu- tion of the cancer screening tool both in the US and abroad, developing testing kits that can be deployed in community hospitals or rural clinics will be key. And that requires regulatory approval, a process that Illumina could help guide.
“We can make a cleared version of the GRAIL test more quickly than they would be able to on their own,” said deSouza. “We believe that acquiring GRAIL will save lives because it accelerates getting that test into the hands of people around the world.”
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 9 | 27 Amazon, Salesforce execs weigh in on how tech can help with HEALTH TECH HEALTH Covid — and how it can’t
By Olivia Goldhill | MAY 11, 2021
For all the progress on Covid-19, we are still far from a post-pandemic world.
“If you’re living on Planet Earth, I assure you the pandemic is not over,” Geeta Nayyar, executive medical director of Salesforce, said at the 2021 STAT Health Tech summit on Tuesday. “India and Brazil are great examples of the forest still being on fire. When we don’t go to help our fellow global neighbors, we can rest assured that the fire is spreading.”
Everyone has an obligation to help, but tech companies in particular can have a huge, international impact on the response to Covid-19, she said. Together with Vin Gupta, chief medical officer for Amazon’s Covid-19 response, Nayyar outlined how health tech is well-suited to pitch in on the pandemic response, and also pointed to areas where the industry has to step back.
How tech can help
DELIVERING OXYGEN WHERE IT’S NEEDED MOS
Last month, it took Amazon just 48 hours to partner with Air India and oxygen vendor Temasek to send 10,000 oxygen canisters to Maharashtra State and New Delhi, India.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 10 | 28 The speed of this response — especially compared to Gupta’s own public sector background working in the military — was striking. “It’s amazing to see how nimbleness and the ability to respond quickly can mitigate the loss of life im- mediately, when initially our government was still trying to wrap around what kind of message they wanted to get out,” said Gupta.
KEEPING CARE AT HOME
The more people can be treated at home, the more hospitals can preserve re- sources that are already stretched thin. “If you can stay healthy in your home, that’s always the goal,” said Nayyar. “We’re seeing the power of telemedicine, the power of being able to get a physician, a nurse, some clinical expert to connect with family members in the home.” The crisis accelerated telehealth innovation, which has helped increase capacity throughout the healthcare system, she said.
Gupta agreed the shifts seen in virtual care are unlikely to subside once the pandemic ends. “What happens after this crisis? Behaviors are changing. People are going to want to consume more of their health care, as much as they can, not in brick-and-mortar settings. They don’t need that face-to-face interaction and can get high quality tests at home.”
“There’s a huge shift happening in how we consume health care,” said Gupta. “I don’t think anybody could have predicted that.”
COORDINATING OPERATIONS AND LOGISTICS
Gupta said that Amazon is well-positioned to deliver medical supplies such as thermometers throughout India. “If you’re talking about middle and last mile delivery of critical supplies, we’re able to move that because… Amazon is ultimately founded on operations and logistics.”
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 10 | 29 The company has a large workforce in India, which helps it respond at scale. “We have links throughout civil society, throughout government,” said Gupta. “That presence means something and we’re part of the fabric of society in India. We have a sense of what they need.”
Where tech still falls short
BUILDING TRUST FOR VACCINE PASSPORTS
There could be a way to create vaccine bubbles and safety certifications for small and medium businesses or even large stadiums, said Gupta.
But while technological capabilities are there, public confidence isn’t: “We can’t even have the conversation of a tech forward approach to a vaccine bubble, because immediately people think it’s going to be misused—we can’t trust that,” he said. “That trust piece really needs to be tackled.”
ENSURING ACCESS TO VIRTUAL CARE
Early in the pandemic, Gupta said Amazon worked with the Gates foundation to deliver Covid-19 tests in pandemic. But patients needed a smartphone and to speak with a provider face-to-face virtually to request a test.
“That means the majority of people who’ve been impacted by this pandemic, who are below the poverty line and couldn’t afford a smartphone, couldn’t access telehealth services,” said Gupta. “The regulatory environment wasn’t keeping pace with the change in technological innovation.” That changed a few months later, but regulation still lags. “Innovation will always go faster than the regulation,” said Nayyar.
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 10 | 30 Though tech is better placed to help in some areas that others, Nayyar empha- sized that the need for a corporate response won’t abate until the pandemic is over globally. “If a forest is on fire, it doesn’t matter where in the forest, we are all in that forest, and the only way we’re going to get out of it is to soak the fire everywhere we can,” she said. “There’s always going to be bureaucracy and barriers.. If it’s not over for everyone on the planet, it will not be over for us here in the western hemisphere.”
HOW TECHNOLOGY IS DESIGNING THE FUTURE OF HEALTH CARE ARTICLE 10 | 31