Edition 11 — August 25, 2021
One of the pleasures of writing this newsletter is seeing themes, startups, and people from past editions pop up again in the news.
On that note, congratulations to Daniel and his team at Flow Neuroscience on being funded by none other than Khosla Ventures, one of the world’s leading VC firms. This is a good opportunity to read our interview with Daniel from the fifth edition, in case you missed it.
And of course, we also have some new stories from the exciting intersection of tech and medicine. In this newsletter, you’ll find out:
We look forward to your feedback, and to seeing how these topics evolve in the future.
- How doctors struggle to cope with the flood of health data from their patients’ wearables.
- Why venture capitalists are shifting their healthcare investments from B2B to B2C business models.
- What fusion energy and coronavirus vaccines have in common.
And now, on to our biweekly MedTech roundup.
Physicians struggle to make sense of the flood of your health data
Illustration by Mary Delaney
In recent weeks, we've covered that Apple will allow its users to share health data with relatives and doctors, and in the U.S., health data sharing will be spurred by new API standards.
→ First, there have been few incentives for physicians to analyze and use the data. In the U.S., doctors generally aren’t reimbursed by health insurers for reviewing data that patients collect at home. Matthew Holt, a health technology startup adviser, told KHN: “In America, we generally pay doctors and health systems to see patients in front of them and do things to them when they show up.”
About 30% of the world's data volume is generated by the healthcare industry. And the flood of healthcare data is getting bigger. The volume of healthcare-related data has increased approximately 15-fold from 2013 to 2020.
A major source of the healthcare data flood are wearables. Gartner forecasts global spending on wearable devices to be $81.5 billion in 2021. More and more manufacturers like Fitbit and Samsung with its new ECG-smartwatch are focusing on health data.
The potential of patient-generated health data is enormous. But there are still significant structural barriers that currently prevent its potential from being realized. As is often the case in the healthcare industry, this is due to the most important stakeholders: physicians.
→ Second, many physicians are barely capable of using the data in their daily work. Gary Wolf of Berkeley, California told KHN that finding a doctor trained to make decisions with "fine-resolution data" is impossible.
Ransomware in healthcare is literally life-threatening
Last week, dozens of hospitals in the United States had to cancel surgeries and reroute ambulances due to a ransomware attack. Ransomware is malware that employs encryption to hold a victim’s information for ransom. The organization’s critical data is encrypted so that they cannot access files, databases, or applications.
→ The reports show that all healthcare organizations must take their cybersecurity even more seriously. They are, after all, one of the most critical infrastructures in our society.
In 2021, 38 attacks on healthcare providers and systems have disrupted patient care at roughly 963 U.S. locations, compared to 560 sites being impacted in 80 separate incidents in 2020, according to Brett Callow, a threat analyst at security firm Emsisoft.
In May, Scripps Health hospitals were the target of a ransomware attack. It has now been revealed that this caused $106 million in losses, representing a staggering 20% of the company's total second-quarter revenue.
→ What’s more, the potential areas of attack are growing, as healthcare increasingly takes place outside the walls of hospitals. Attentive readers know the drivers behind this, including decentralized trials, telehealth, and healthcare wearables.
→ With this in mind, it's no wonder that cybersecurity firms and founders are increasingly turning to the healthcare industry. While only a few companies (like Medigate, ClearData, and CyberMDX) are solely focused on healthcare cybersecurity, the sector is an outgrowth of IoT security, which has grown enormously in recent years, according to Crunchbase data.
Researchers develop Baymax-style inflatable robotic hand
Researchers at the Massachusetts Institute of Technology and Shanghai Jiao University have developed an inflatable robotic hand that is not only lighter than conventional neuroprostheses, with a metal skeleton and electric motor, but also significantly cheaper. Instead of controlling each finger with built-in electric motors, the researchers used a pneumatic system to precisely inflate and bend the fingers into specific positions.
→ Hand prostheses like those from hy5 and MIT are helping to bring us closer to this goal. Although MIT's design is still in its infancy, it seems realistic that mass production will take place in the coming years. Soft robotic technologies have tremendous potential to make prostheses very cost-effective for low-income families who have suffered an amputation. This kind of innovation creates impact—and that's exactly what we should optimize for.
Initial tests allowed volunteers to perform everyday activities such as closing a suitcase, pouring juice, or petting a cat just as well as—and in some cases, even more effectively than—stiffer neuroprosthetics. The hand is made of commercial elastomer EcoFlex. It is soft, elastic, weighs less than 250 grams, and the components amount to around $500—just a fraction of the cost of conventional neuroprostheses.
Not long ago, we shared a virtual coffee with Christian Stray, CEO of HY5, who developed the world's first hydraulically-actuated prosthetic hand. He is driven by the conviction to develop sustainable solutions that benefit people in low- and middle-income countries, who do not have the same access to patient care as we do in high-income countries.
The MedTech ecosystem is different from most other startup verticals in various dimensions. From previous newsletter editions, you might remember that:
The reasons for these unique characteristics of the MedTech startup ecosystem are manifold—for instance, a result of the sector’s oftentimes technologically-complex and regulated nature that, by default, leads to high patenting activity and more government involvement.
But MedTech is even more special.
Another unique shift in the medical technology startup field happens on the business-model front. Over the past few years, our analysis based on Rock Health Funding data reveals a growing trend toward direct-to-consumer business models offered by MedTech startups.
Again, this trend is contrary to overall startup dynamics. Across most other verticals, D2C models (think of classic consumer internet offerings, such as social media apps and e-commerce) have long dominated the market but are now cooling off, with B2B offerings gaining a stronger foothold.
However, in MedTech, the consumerization of various medical segments (i.e., hearing aids, telemedicine, and dermatology and mental health) has only recently started to take off, while B2B models built the foundation of MedTech in its early days.
So why is this happening, and what does it mean for the future? It’s something we will explore in more detail in the coming weeks. Stay tuned.
Dr. Florian Fuhrmann has been managing director of kv.digital, a subsidiary of the Kassenärztliche Bundesvereinigung (KBV, National Association of Statutory Health Insurance Physicians) since its foundation in 2014. He has been working in the healthcare sector for more than 15 years, primarily in the areas of digitization, eHealth, telematics, managed care, and outpatient and inpatient care.
Digitization is an important prerequisite for better medical care.
Dr. Florian Fuhrmann (MD kv.digital)
Opya, a provider of in-home and telehealth services, set out to transform autism care by connecting treatment with technology and raising $15.4 million of Series A venture funding from SoftBank Group, Panoramic Ventures, and The Disability Opportunity Fund.
FORBES.COM (2021-08-21) ↗
ClosedLoop.ai, a healthcare data science platform, announced a $34 million Series B financing round, led by Telstra Ventures with participation from Breyer Capital, Greycroft Ventures, .406 Ventures, and Healthfirst. ClosedLoop develops predictive models for a wide variety of patient outcomes.
PYMNTS.COM (2021-08-17) ↗
BrainQ, a developer of AI-powered technology that treats neurological disorders, has closed a $40 million funding round led by Hanaco Ventures. The funding will be used to support the company’s upcoming multi-center pivotal trial in select hospitals across the United States, with the goal of aiding ischemic stroke patients.
TECHCRUNCH.com (2021-08-16) ↗
Ultromics secured a £23.7 million Series B investment led by Blue Venture Fund. The UK-based startup develops AI-powered cardiovascular imaging solutions to improve patient care and elevate both hospital diagnostic quality and resource savings.
MOBIHEALTH.com (2021-08-16) ↗
Mahana Therapeutics raised $61 million of Series B venture funding from Gurnet Point Capital, Main Street Advisors, and JAZZ Venture Partners. The company works on clinically-validated digital therapeutics designed to help patients suffering from gastrointestinal conditions.
NSMEDICALDEVICES.COM (2021-08-12) ↗
Zebra Medical, an Israel-based startup founded in 2014, provides medical imaging services and an analytics platform designed to deliver automated, accurate, and timely medical image diagnoses. The company reached a definitive agreement to be acquired by Nanox for $200 million.
VENTUREBEAT.COM (2021-08-10) ↗
While I’m no expert on fusion energy, I was nonetheless excited to read about the progress researchers at the National Ignition Facility (NIF) have made toward igniting nuclear fusion:
Last week, a single laser shot sparked a fusion explosion from a peppercorn-size fuel capsule that produced eight times more energy than the facility had ever achieved: 1.35 megajoules (MJ)—roughly the kinetic energy of a car traveling at 160 kilometers per hour. That was also 70% of the energy of the laser pulse that triggered it, making it tantalizingly close to “ignition”: a fusion shot producing an excess of energy. “After many years at 3% of ignition, this is super-exciting,” says Mark Herrmann, head of the fusion program at Lawrence Livermore National Laboratory, which operates the NIF.
I deeply believe in the power of technology to accelerate human progress. But to achieve this, we need passionate people who push things forward against all odds and despite all setbacks. Just like the scientists around the world who have been exploring fusion energy for years, driven by the dream of emission-free energy. Or the researchers who have been working for decades on the foundations for mRNA vaccines, which are now one of our most important weapons in the fight against the coronavirus pandemic.
Progress is a long and rocky road for everyone involved—which is all the more reason for us to celebrate the breakthroughs with these researchers. In other words: to technological progress and the humans that make it all happen!