Monthly Archives: March 2014

Healthcare’s Innovation Imperative: Ten Truths Small Business Needs To Know

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Key Points:

Inflection points insist on healthcare innovation. Here’s what’s on the horizon:

  • Clinical Models are changing                                      
  • Insured population is growing
  • Marketing target shifting                                               
  • Deductibles and out-of-pocket expenses on the rise
  • New Data Thresholds for studies are emerging         
  • Cost Transparency is coming
  • Decision Making support tools are in demand
  • The smart phone will see you now
  • Data Transparency will be the new normal:
  • Cost, convenience, quality, and consumer preference will have a significant influence on how and where care is delivered.
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Kerry A. Dolan in Forbe
3/20/2014

The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.” Peter Drucker

In a period of massive change, franchises die and are born, previously unimagined models emerge, and incumbents that are too focused on “protecting share” find themselves closing their doors. The healthcare industry represents nearly a fifth of U.S. GDP and it is going through such a period of dramatic change as we speak.  The product companies that dominate the marketplace today find themselves cash rich but growth poor.  At the same time an army of inventors and visionaries in biotechnology, medical devices, diagnostics, health care services, healthcare IT, and consumer health fields are eager to provide a new model for the future.

Healthcare venture funding is extremely tight, entrepreneurship remains a technically sophisticated pursuit, and “evolutions masquerading as innovations” abound. But smart entrepreneurs who harness the dazzling new tools we now have at our disposal have everything to gain if they focus on creating offerings aligned with the emerging value system. Their products and companies will be highly sought after by today’s market leaders… some will overtake existing market leaders entirely.  And patients will benefit tremendously.

Our mandate as health care investors and entrepreneurs must be to channel our time, capital, and expertise exclusively into companies that will thrive in the face of extreme scrutiny, forcing inadequate, expensive legacy systems and interventions into rapid obsolescence.

Inflection points insist on innovation. Here’s what’s on the horizon:

Clinical Models are changing: Fee-for-service, volume-based care models of the past will be replaced by results-driven models. For institutions and individuals providing care to patients this will mean a sharper focus on prevention, minimizing readmissions, better care coordination etc. For companies that market pharmaceuticals and medical devices this will mean being part of a “total care” integrated solution that goes beyond an individual pill or device.

Insured population is growing: The “disappearance” of an uninsured population will increase the number of people who access care. As utilization increases, expenditures will rise, even if prevention becomes more commonplace. As a result, overall costs will receive more scrutiny and payors will exercise more negotiating leverage. In some cases this will result in new price pressure on a specific product. In other cases it will mean less price sensitivity if a new product can show it lowers the total costs of treating a condition.

Marketing target shifting: In the past, physicians were the dominant focus of pharmaceutical and device company marketing efforts. Now, physician sales forces are shrinking, marketing methods are changing, and the targeted audience is shifting. On the one hand, technology has enabled more efficient, lower cost “virtual detailing”; on the other hand it requires a sophisticated understanding of real time, crowd-driven and social tools. With patients-as-consumers and institutional payors demanding more evidence of the value of a service or product, the importance of messaging tailored for these audiences is difficult to overstate.

Deductibles and out-of-pocket expenses on the rise: Insurance reform will result in larger deductibles for more individuals. As consumers pay more out-of-pocket and become more aware of direct costs, they will become more sensitive the ways they access health care. The ability to make a direct value proposition to consumers will be a competitive advantage, if not a competitive necessity for product and service providers.

New Data Thresholds for studies are emerging: Placebo/sham-controlled trial data has been the standard for demonstrating safety and efficacy of new therapeutic interventions. With a new focus on value, there is demand for data that compares new interventions against existing standards of care. Additionally, there is more interest in data that measurably demonstrates enhancements to quality of life, convenience, compliance and adherence improvements, and holistic reductions in disease burden. In the service of this demand, new data sets will complement standard sets including patient reported outcomes data, unstructured data, quantified-self data, and “the Internet of Things” data generated by medical devices, supplies, and even drugs. As these data sets grow, Big Data techniques will transform the raw data into useful information with applications we haven’t even begun to imagine.

Cost Transparency is coming: Health care cost transparency is nonexistent today, both at the level of patients and surprisingly at the level of providers.  Tools are now being built and incentives are being put in place to allow cost transparency along with value tracking and optimization.  In the not-too-distant future, purchasers will view the absence of such data as inconceivable and intolerable.

Decision Making support tools are in demand: Decision-making around a patient’s diagnosis and the optimal course of therapy has been driven by a combination of clinician observations and instinct. Physicians reach conclusions by integrating inputs from the physical examination, family history, and lab/imaging data, all in the physician-specific context of past experience, medical training, and emerging science s/he may have had the chance to review. Increasingly, doctors and patients expect systematic, up-to-date integration of an increasingly exhaustive set of inputs to support decision making. Furthermore integrating case-specific information real time in validated ways into reference data sets will bridge the time and expense gap between the metaphorical “R&D bench and bedside”.

The smart phone will see you now: Health applications and accessories enabled by smart phones, wireless connectivity, and telepresence technologies will expand access, improve efficiency, and increase convenience for patients and providers. They will also allow better data generation, data tracking, data portability, and data organization.

Data Transparency will be the new normal: Institution-specific paper files are becoming a thing of the past as electronic, ubiquitous, patient-accessible records become the new standard. In parallel, patients and clinicians are seeking more clinically-focused annotations in the records in the place of claims-focused coding.

Cost, convenience, quality, and consumer preference will have a significant influence on how and where care is delivered. Within large clinics and hospitals we are already seeing consumer-focused practices like same-day appointments, private waiting rooms, and concierge-like care navigation services. We will also see more care move out of centralized institutions into alternate settings: walk-in clinics in drugstores and airports, self-administered at home lab tests, virtual house calls.While such services and technologies are desirable for their ability to improve patient satisfaction, their ability to drive efficiency, broaden access, reduce costs, and improve outcomes is even more compelling.

A mathematician turned life sciences entrepreneur and venture capitalist, Ashley Ledbetter Dombkowski, Ph.D., has invested in the private and public market healthcare sectors for more than 15 years. She is a Managing Director at venture capital firm Bay City Capital, was on the board and executive team at 23andMe, ahd has co-founded numerous companies including Epizyme and iPierian.

Augmented Reality Finally Starts to Gain Traction

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Wall Street Journal- Technology

March 3, 2014

Tech start-ups like Blippar, Layar and Daqri are testing new marketing features enabled by consumer mobile devices. They’re using augmented reality technology that enables a smartphone or tablet to recognize real live objects and then activate video or graphics that relate to the object. Katherine Rosman reports.

Augmented reality—a technology that enables mobile devices to recognize live objects and then activate video or graphics—has been stuck for years in new-tech purgatory, where ideas loll in the hope of finding mainstream applications.

That may be changing, at least in the eyes of marketers, print publishers and retailers, who are testing new ways to promote their brands on ever-present mobile devices.

Startups like Blippar, Layar and Daqri are beginning to make inroads, offering technology that lets people point their smartphones or tablets at objects—whether a can of soda, a magazine cover or an in-store display—and then watch video or high-tech graphics unfurl on top of the objects on screen.

AR remains clunky at times, and there is little research showing that layered content translates to sales and customer loyalty. Many advertisers are reluctant to talk, out of concern for revealing their strategy. But the mass adoption of smartphones and tablets and the promise of wearable devices is helping spur interest in the technology.

Augmented-reality apps, such as this one from Daqri, use a mobile device’s camera to scan objects and activate interactive graphics. Parker Eshelman/The Wall Street Journal

Sometimes referred to as “interactive print,” AR is finding its greatest consumer-market ally in the print magazine industry. Some AR programs activate content on tablets that can be viewed only as long as the device hovers over certain print, making the print an essential element of the experience.

In publications like Elle, readers can focus a tablet on a film review and watch as the movie’s promotional trailer begins to play on the device’s screen. When an AR-enabled app from Maxim magazine zeroes in on the magazine’s cover model, a video from the photo shoot begins to play. An interactive ad from CoverGirl in the March issue of Cosmopolitan magazine allows readers to “try on” a makeup product via an AR app to find the right shade. The makeup can then be purchased directly through the app.

“Consumers are increasingly using their phones to navigate the physical world, and magazines are a part of that,” says David Carey, the president of Hearst Magazines which publishes Cosmo, Elle and Esquire, each page of which is interactive.

Some advertisers also see promise in AR, saying the technology has the ability to captivate people with products and compel them to watch branded content intently. Consumer brands like Heinz and Pepsi PEP +1.67% have worked with Blippar to test the apps on their products.

Using the Blippar app, a consumer can point a mobile device at one of 20 million cans of Pepsi, PepsiCo Inc.’s flagship product, and unlock interactive content from the National Football League, including recipes and a ticket sweepstakes for next year’s Super Bowl.

But industry analysts caution that AR’s success depends on people finding it easy to use and recognizing value in interacting with videos and graphics. “If the content isn’t brining additional value, then mainstream consumers [aren’t] going to use it twice,” says Tuong Nguyen, a principal with research firm Gartner.

Mr. Nyuygen says he expects great growth in the industrial realm, where AR can sometimes help mechanics fix equipment and warehouse operators find and keep track of inventory. “If something makes someone’s job easier,” he says, “the adoption will be quick.”

AR companies are trying to make it easier for creative executives to make the sort of content that will grab consumers. In the past few weeks, both Daqri and Blippar have released products that can be licensed directly by brands and advertising agencies to build and activate their own AR experiences. Layar has had such a product on the market for nearly two years.

For more innovative campaigns, brands are working directly with the technology companies. For the North American International Auto Show in Detroit earlier this year, Ford Motor Co. F +1.12% debuted its first AR experience to promote its vehicles.

Attendees were prompted to download a special “Ford 4D” app and to look through the app at a graphic affixed to the cars. The app recognized the graphic and launched imagery on the smartphone that made the car appear as though it was coming off the screen in real-life dimension. For the Escape sport-utility vehicle, users could swipe the screen to open the back of the vehicle and activate a virtual version of it filling up with simulated animated soccer balls.

Ford has used the 4D display at subsequent auto shows in Toronto and Washington, and plans to do so again at the auto show in New York in April, says David Tillapaugh, its auto-show operations manager. Mr. Tillapaugh said it is too early to tell if more consumers chose Ford for having interacted with the cars in 4D, and he declined to cite the cost of the promotion. But he says consumers at the auto shows have been very engaged with the 4D display. “It has a lot of stickiness,” he says.

Ford’s 4D experience was created by Daqri, a Los Angeles company founded in 2010 by Brian Mullins, a graduate of the U.S. Merchant Marine Academy who later worked for the U.S. Transportation Department to help develop technology to help aircraft carriers float into docks seamlessly.

Last month, 325 representatives of more than 200 companies attended a two-day convention at Daqri’s headquarters to learn more about technology Daqri is building for universities, manufacturers and entertainment companies.

The marketing of a marketing product is a focus of all AR companies because the success of the technology’s adoption hinges on brands helping to promote the campaign. Last December, Kohl’s Corp. promoted holiday items on an AR-enabled seven-page ad that unfolded from the cover of Food Network Magazine. But nowhere on the ad were consumers told to download an app and hover it over the print ad to experience multimedia features.

Lisa Hu, a spokesperson for Blippar, says “user education” is paramount in building campaigns, as some companies may already have created the ads before making them interactive or limit the space needed for instructions.

Consumer brands experimenting with AR are reluctant to discuss if the technology is helping to increase sales. Matthew Szymczyk, chief executive of Zugara, a virtual dressing-room technology that is AR-powered and aims to help digital fashion shoppers, says the technology is too young to judge its efficacy.

“Some people say AR is a gimmick, but social media was initially considered a gimmick too,” he says.

Internet of Things can battle climate change

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Interconnected things can reduce waste, save energy, among their other benefits.

Machine to machine communication, or the internet of things, is on the precipice of taking the world by storm. At its very core, machine to machine communication is the ability to connect everything, I mean everything, through a vast network of sensors and devices which can communicate with each other. The possibilities of this technological evolution span an immensely wide spectrum; ranging from monitoring your health through your smartphone, to your house knowing where you are to adjust lighting and heating.

The way that the internet of things could revolutionize our lives can be hard to conceptualize all at once. So today let’s focus on one place where machine to machine communication could have an immense impact: Energy consumption. Not only could this technology make turning the lights on easier, but it could be the key to us effectively managing anthropogenic carbon emissions.

Regardless of your thoughts and opinions on climate change and the scope of how much carbon emissions affects the global atmosphere, we all can agree on one thing: Emitting less carbon is a good thing, especially if it can be done without impeding economic growth. For years, the battleground for the climate change debate has been on the energy generation side, pitting alternative energy options like wind and solar against fossil fuels. The problem with fixating on this side of the argument, though, is that even under the most ambitious outlooks for alternative energy growth, we will never be able to get carbon emissions below the threshold many think is required to prevent significant temperature changes over the next century.

Does that mean there’s no shot at significantly reducing carbon emissions? No — we’re just focusing on the wrong side of the energy equation, and that is where machine to machine communications comes into play. Let’s look at how the internet of things can mean for carbon emissions, and how investors could make some hefty profits from it.

Energy consumption’s overdue evolution

We humans are a fascinating study in inefficiency. We will sit in traffic on the freeway rather than take the alternative route on “slower” roads. We oversupply the electricity grid because we don’t know precisely how much demand is needed at any given moment. It’s not that we deliberately try to do things less efficiently; we just don’t always have the adequate information to make the most efficient decision.

When you add all of these little inefficiencies up, it amounts to massive amounts of wasted energy and, in turn, unnecessary carbon emissions. In the U.S. alone, 1.9 billion gallons of fuel is consumed every year from drivers sitting in traffic. That’s 186 million tons of unnecessary CO2 emissions each year just in the U.S.

Now, imagine a world where every automobile was able to communicate with the others, giving instant feedback on traffic conditions and providing alternative routes to avoid traffic jams. This is the fundamental concept of machine-to-machine communications, and it goes way beyond the scope of just automobiles and household conveniences.

One of the added benefits of this technology is the impact it could have on our everyday energy consumption and the ultimate reduction in total carbon emissions. A recent report by the Carbon War Room estimates that the incorporation of machine-to-machine communication in the energy, transportation, built environment (its fancy term for buildings), and agriculture sectors could reduce global greenhouse gas emissions by 9.1 gigatons of CO2 equivalent annually. That’s 18.2 trillion pounds, or equivalent to eliminating all of the United States’ and India’s total greenhouse gas emissions combined, and more than triple the reductions we can expect with an extremely ambitious alternative energy conversion program.

How is this possible? Increased communication between everything — engines, appliances, generators, automobiles — allows for instant feedback for more efficient travel routes, optimized fertilizer and water consumption to reduce deforestation, real-time monitoring of electricity consumption and instant feedback to generators, and fully integrated heating, cooling, and lighting systems that can adjust for human occupancy.

There are lots of projections and estimates related to carbon emissions and climate change, but the one that has emerged as the standard bearer is the amount of carbon emissions it would take to increase global temperatures by 2 degrees Centigrade. According to the UN’s Environment Programme, annual anthropological greenhouse gas emissions would need to decrease by 15% from recent levels to keep us under the carbon atmospheric levels. Based on current emissions and the 9.1 gigaton estimate from Carbon War Room’s report, it would be enough to reduce global emissions by 18.6%, well within the range of the UN’s projections.

The internet of things is still very much in its infancy, but it’s taking off fast. The pending boom in machine-to machine communication helps explain why Google (GOOG) shelled out more than $3.2 billion for smart-thermostat company Nest Labs. Its ability allows customers to better manage heating and cooling in households and instantly provide feedback to utilities in order to better manage energy demand during peak load hours. Sure, estimates put the total number of machine-to-machine capable devices in the billions, but for the Internet of things to be truly effective, everything needs to be connected. Estimates for total connected devices around the globe could reach into the trillions. This could lead to an industry with annual revenues of a whopping $948 billion.

The big players in the technology world, like Google and Intel (INTC), will undoubtedly be major players in this fast-growing market. Aside from its investment with Nest for smarter home energy use, Google is also getting into the transportation game with its Open Auto Alliance, a group of automakers and technology companies that will establish common practices such that vehicles from different manufacturers can communicate with each other — the building block for self driving vehicles. With that much money on the line, can you really blame these companies for diving into this market?

The internet of things trend is approaching … fast. For investors, it could be an amazing opportunity to get in on the ground floor of a new market with trillion dollar potential, but it is so much more than that. Increased productivity and elimination of wasteful energy consumption through smart devices could be the one and only key to cutting greenhouse gas emission enough to reduce the chances of significant climate change. So go ahead and continue arguing about the use of fossil fuels or alternative energy — the investors who will really be betting on reducing carbon emissions will be putting their money here.

HOW THE LED ALTERS THE FUTURE

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From March 14 issue of Fast Company by Jon Gertner

 

 

SAFETY
 
Thanks to the customizable nature of LEDs, they can provide better light where it’s needed–­helping pedestrians and drivers navigate sidewalks or twisting roads. 
 
DURABILITY AND EFFICIENCY
 
Unlike incandescent bulbs, LEDs will last decades–many are rated for lives of 20 or 22 years. The bulbs use a fraction of the energy of older technologies, which means they’ll have a profound impact on carbon dioxide emissions. 

CALM AND CONCENTRATION
 
Based on Philips’s research in Europe, LEDs can be set to wavelengths that appear to measurably improve education environments. The lights can boost concentration or alertness, or aid in relaxation.

HEALTH AND WELLNESS
 
Specific light recipes have been shown to speed patient-recovery times in hospitals. Meanwhile, new home medical devices are reaching the market in Europe that utilize intense blue LED lights to ease back pain. 

COMMAND AND CONTROL
 
Due to their digital and connectable nature, LED bulbs–such as Philips’s Hue–can be accessed and controlled from anywhere there’s an Internet connection, via a smartphone app. 

URBAN FARMING
 
In horticulture, plants respond differently to various light wavelengths. Tailoring the output of LEDs for greenhouse growing has already been shown to increase crop yields. 
 
SENSORY INTELLIGENCE
 
LED lights fitted with sensors can automatically know how much illumination is needed, and where it should be directed. The lights will adjust to a crowded party or to a dark ­parking garage. 

TURNABILITY
 
Allowing employees to create personal lighting environments that vary in color and intensity could boost job satisfaction and (quite possibly) productivity.