Centaurs, Not Snake Oil

We took the pulse of a maturing digital health start-up industry at Techtour Healthtech Summit in Lausanne.

Mads Modensen, CEO of Treat Systems, one of the Centaur companies presenting at Techtour Healthtech Summit.

The Techtour Healthtech Summit hosted by the Canton de Vaud in Lausanne is a dating event for European seed, start-up and growth companies looking for investment and for Venture capital and some Pharma/Medtech companies looking to invest. Doug Haggstrom went along to take the pulse of European digital health companies. These companies aren’t specifically focused on Pharma as partners but it is worth paying attention to how digital health products and services are developing. Pharma developed tools and services will, after all, be compared to these companies in the marketplace and the discipline of proving standalone value has some lessons for Pharma’s own digital initiatives.

Digital health’s most recent detractor was the CEO of the American Medical Association who branded digital health the snake oil of the 21st Century.  He complained about advancements without an evidence base and tools that impede care, confuse patients or waste time. He specifically targeted ineffective electronic health records (EHRs), direct to consumer products and apps of mixed quality.

Healthtech Summit participants showed a more positive approach that could see them answer these criticisms with an increasing focus on a clinical evidence base and in some cases both regulatory approval and reimbursement. What emerged was what we call the Centaur approach, named after the half human, half horse creature of Greek mythology. In digital terms, a Centaur is the combination of computer plus human, made famous by Garry Kasparov when he described the use of computers by chess players to improve their play. The combination of computer plus human has proven to be better than either human or computer alone in chess and it is likely to be the same for healthcare.

The Centaur companies at the Summit focused on enhancing rather than replacing an existing system. They split into two broad groups, the first group had a focus on self-service and the second focused on enhancement of the patient-provider relationship.

Self-service centaurs include your.mdskinvision and Mediktor. Your.md and Mediktor are triage apps that automate the gathering of information about a user’s current concern addressing the increasing consumerization of healthcare. Where possible, they resolve the concern with information, but also have the ability to escalate the concern to a live consultation. Payment for the referral is the basis of the business models of both companies. This isn’t the wild west of Dr Google but well-structured and validated systems that optimize resources by directing users to a healthcare professional only when needed.

Skinvision, a melanoma app, showed the value of design, not only in the app itself but also in the business model. In contrast to many other melanoma apps, Skinvision has a plan for market entry. They enter a market with far-reaching PR and social media campaigns supported by local dermatologist societies. The next step is to use the momentum of consumer interest to establish physician partnerships who further promote the app. Acceptance by the profession and the credibility that comes with it further boosts distribution through payers and employers.The direct-to-consumer market is important, but the app really gains momentum when it delivers value more broadly by helping patients and doctors keep track of important moles and blemishes.

Companies looking to boost the patient-provider relationship included Karify, Treat systems, M’Care, Silvercloud Health, Sword Health, Psious, Touch Surgery, Qinec, Ieso and Europe’s first digital health Unicorn Mindmaze. These services support physicians with things like decision-making, optimization of process flows and generally enhancing system and practice performance.

Karify, Psious, Silvercloud Health and Iseo work with mental health to improve the clinical delivery of psychotherapy services. Karify provides structured modules, which the patient completes outside of the care setting plus a secure communication channel with the therapist between visits. Psious, meanwhile, enables psychotherapists to use Virtual Reality (VR) to treat conditions like fear of flying or agoraphobia in a clinical setting. The success of this approach, however, relies heavily on a close link to the therapist, “We would just be a silly tool without the support of the psychotherapist,” said Xavier Palomer, CEO, during his presentation at the Healthtech Summit.

Ieso enables psychotherapists to deliver Cognitive Behavioral Therapy via text to patients in real time. This is not only more efficient than travelling to a clinic, but can also improve the quality of care. Patients can review and learn from their own texts and the therapists can receive feedback on their performance from peers, and more easily learn what works and what doesn’t. It also creates an environment where the company has found patients are able to express things they wouldn’t in a face-to-face setting. As the Ieso technology improves, it could liken the Centaur model from chess where the human adjusts the suggestion made by the system to the actual case.

Mindmaze, which recently received funding valuing them at over US$1Bn, is a medical grade system that uses VR to enable early motor rehabilitation following stroke, limb injury or amputation. The system uses VR to enable patients to “see” amputated or disabled limbs, which speeds up recovery by improving brain plasticity.  At a simpler level, Sword Health showed how wearables can add value by giving patients and therapists feedback so they can correctly perform exercises both under supervision and at home.

There were two other themes that came through during the two days; the convergence of digital health with Medtech and the role of external validation.

The Healthtech Summit had two distinct streams, one for digital health and one for the currently less trendy cousin Medtech; however, this split appears to be losing its relevance. Many of the digital health companies are using hardware and strive to be registered as medical devices, and Medtech devices are increasingly integrated with apps or other software for both patients and professionals. The shift from 2015 to 2016 from Medtech to digital health is perhaps indicative of a trend to label any innovation as digital health.

Many participants at the Summit expressed a strong desire to achieve external validation through a CE mark/FDA approval or at least trials that demonstrate economic value. This was with the goal of differentiating from snake oil peddlers and achieving eventual third party reimbursement. For many, showing economic value was in fact as strong a driver as regulatory approval. We’ll return to the topic of what the right trial is for digital health in a future article.

What this focus on validation does show is that the level of sophistication of smaller, technology-based companies on the topics of regulation and reimbursement is increasing. This traditional area of advantage for Pharma is being eroded. As these new players take increasingly patient-centric and pragmatic views of the healthcare system, they could present a real challenge to Pharma’s home-grown initiatives with the primary aim of selling more product.

What wasn’t there?

There was no one pushing an app that would magically solve adherence problems and thus earn lots of money from Pharma. Interestingly one company, Noona, which didn’t mention adherence once, may well have an impact. They focus on the patient and by improving a feeling of support, shared decision making, and control of side-effects they are removing some of the key barriers to adherence.

The companies at the Healthtech Summit showed themselves ready to prove beyond doubt their efficacy and work with the system to build value over time rather than sell snake-oil to make a quick buck. Let’s hope their dates with investors went well and they can work on delivering value to patients. The long-term approach, integration with the existing systems and willingness to prove value exhibited by many of the companies present should be an inspiration for the digital health groups within Pharma.

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