Digital Health Startups, Interoperability Challenges, and Informed Consumers with 7wireVenture’s Lee Shapiro,:
This transcription is provided by artificial intelligence. We believe in technology but understand that even the smartest robots can sometimes get speech recognition wrong.Bill Russell: [:
Lee Shapiro: We saw a significant amount of investment. It was a record year. We'll be well over 30 billion dollars invested in the sector during 2021, which is more than 2020 and 2019 combined. Close to 700 companies have received funding this year. And the amount of capital flowing in to companies, based on the promise that these companies hold in terms of improving health has really been remarkable. [00:00:30]
Bill Russell: Thanks for joining us on this week health Keynote. My name is Bill Russell. I'm a former CIO for a 16 hospital system and creator of This Week in Health IT. A channel dedicated to keeping health it staff current and engaged. Special thanks to our Keynote show sponsors Sirius Healthcare, VMware, Transcarent, Press Ganey, Semperis and Veritas for choosing to invest in developing the next generation of health IT leaders.media channel relies on the [:
Today, we are joined by Lee Shapiro, Managing Partner, for 7wireVentures. Lee, welcome to the show
Lee Shapiro: Bill. So good to see you.Bill Russell: [:
Lee Shapiro: So I wore a number of hats, but from 2001, until the end of my tenure there, I was president of the company.ably one of the more dynamic [:
And I think we were going to go in one direction and then the audience really took us in another direction. It was really interesting. And they took us in the direction of patient centric interoperability. I think it was the discussion we ended up having.a fantastic job in terms of [:
Bill Russell: Yeah. And if I remember correctly, I was the only one with a suit and tie on at that showing because it really, it really is an entrepreneur kind of event.
It's a phenomenal event down there in my old stomping grounds in Laguna Beach. That was awesome. Tell us about 7wireVentures. What are you doing now? And what's 7wireVentures about?Shapiro: You know, think of [:
And that's something that you think about when you're sick. And so at 7wire what we're trying to do is build companies that help us all address the hassles we face as consumers in healthcare. And our thesis is what we call the intelligent, informed, connected health consumer. And we are [00:03:30] allowing these founders to really pursue their, their goals.eams to work on them with us.[:
Bill Russell: Fantastic. You said a couple of things there. I want to hone in on. You said you're focused on health probably more than healthcare per se. Is that an accurate characterization?to manage their health. And [:
Bill Russell: All right. Now I want to, I'm going to push on your thesis here. Intelligent. I think I got this intelligent informed health consumer. Are those the right 4 terms?
Lee Shapiro: Informed connected healthcare consumer.Bill Russell: Informed [:
Lee Shapiro: We're building that out today. And think about a situation where one of our great companies Home Thrive is helping seniors live independently at home longer.r my parents, when they were [:
But seniors want more independence and there are ways to allow them to do that and deliver more health at home. Provide them with more services, allow them to engage in activities of daily living that they want to engage in but still want to do [00:06:00] so from the comfort of their own home. And in light of the Corona virus, a lot of families are really hesitant about putting their loved ones into a facility like that.they want to be healthy. And [:
Bill Russell: Yeah. You know, we had that baby boom generation moving through the whole healthcare cycle. And we just experienced this personally, having my father-in-law come live with us. Right. So he went from being independent, living on his own, and that really wasn't viable as he got into his late eighties.coming alongside us as care [:
Lee Shapiro: Absolutely. And literally we had a similar experience. You and I can probably compare notes. During the course of the pandemic, we moved my father-in-law who was 95 at the time. Soon to be 97, we hope. Knock on wood. And we moved him in with us. He was living at home with a caretaker, but really was cooped up in [00:07:30] a two bedroom apartment and the caretaker had one room and he had the other. And we moved him into the house where he had a little bit more free reign, but also opportunities to interact with more of the family.
And it was great for him. And he really thrived during that with the social engagement, but we were also able to really help him better manage his health. And we got a lot of support from the outside in doing that. So it was a win-win for everybody involved.nt informed connected health [:
And then I tell her what Glen Tulman's doing. And she's like, well, great. Get that. Let's sign up with Transcarent cause I don't want to call this company again. I was like, I Glen's not ready for us yet. [00:08:30] So it'sdecisions that can be made? [:
Get them the best possible care at an affordable price. And that's what Transcarent and their team are doing.e, a high level, characterize:
Lee Shapiro: Well, there was a huge amount of momentum in 2021. A lot of it's spurred by the pandemic and the need for remote carers. We [00:09:30] were talking about work here into the home, but really care wherever anybody is. And what we found is that digital health is a tool for providing safe, reliable care for consumers, as well as easier ways for providers and caregivers, frankly, to reach those consumers.lion dollars invested in the [:
Bill Russell: you know, it's interesting so I invested a little bit early on when I was at St. Joe's, we invested in some companies and I've always wanted to ask someone like yourself, this question, what are the characteristics that distinguish the winners, maybe from the, not so successful players in the digital health space?team. I mean, that was like [:
Lee Shapiro: Bill, you're spot on, at least with the way we think about it. You have to look at the market based on what stage you invest at. So some of the funds invest at later stages at [00:11:30]which point the management team has evolved and has proven themselves.tastic idea, because we know [:
But there's three elements that I think make companies successful in the space that, that we focus on in. So it's team, as you mentioned, but when you have that team in place, we think about the three elements as being, first, create a phenomenal consumer experience. Something that people love that they're going to want to use.hat engagement is really the [:
That's a health plan. That's a self-insured employer, an at-risk medical group. That you're offering is able to deliver a return on investment. So whatever it is they pay for your [00:13:00] offering, you have to be able to give them at least double back in terms of healthcare savings or better results. And the third piece is that when you do that, you have to do it in a way that is a lot better than what the alternatives are.really hard for them to use [:
Bill Russell: You know, Lee, I can't, I mean, the number of times I've sat across, as my role as a CIO. And now since doing some consulting and whatnot and said, okay, explain to me your value proposition. I mean, those are the words I'll use and they'll say, well, you know, it's this and this.
And I'll just look at them and go that doesn't work in healthcare. They say, well, the consumer's gonna pay for this. I'm like, the consumer's not going to pay for that. They're not, there's not a chance they're going to pay for that. Like, well, you know, the physicians will see the value.I'm like, [:
So, it has to fit into, as you said, fit into their workflow, or it has to be really simple or dramatically change some outcome that they're being measured on. That's the thing I think they get wrong the most. It's like, what's your value proposition?And they, they just haven't [:
Lee Shapiro: And Bill, you, you may have even taught me this, but there's really two flows that we think about companies in the digital health space having to fit into. One is the life flow for the consumer. And the other is the workflow to the extent that you're relying on providers or other parties that are going to be helping you to implement that offering. When we [00:15:30] worked with you, when we were at Allscripts, we weren't in the software business, we were in the change management business.
We were trying to move people from paper records and literally writing some billing illegibly on a script pad and handing it to the consumer to the patient, say right, go take this to the pharmacy. And to get them to write a prescription electronically. Yes, it was safer. Yes it was better informed. But it took more time for the provider and there were no incentives for them to do it.had to find a way to make it [:
So you really had to make sure that all the stakeholders were involved in the process. Were involved in that. And we see a number of great offerings that don't rely on a doctor to prescribe it or to interact with the [00:16:30] provider. But boy, I can tell you that when you do get that provider engagement as well, you really get a virtuous circle where you can improve outcomes.
And there's a real benefit in terms of being able to share information with providers and to get them to act on it and see where the value is for them as well.going to ask you to look into:
Lee Shapiro: So I do think that there's this notion of care everywhere. And the idea that when care is delivered, you have to think about multimodal, multi-screen you might say, in your world Bill,of of being able to deliver care on the consumer's terms. So there are studies. Jamia just came out with one that said over 65% of consumers [00:17:30] want video visits in the future.ace-to-face environment that [:
But then to also utilize other technologies to kind of stay in touch and to leverage what you started with that trusted relationship. So Bill, if you were my doctor and you said, here's the things I want you to do, these are the steps I want you to take. And here's the things I want you to follow up with me on.es scale and leverage to the [:
But we see a lot of promise in terms of being able to extend the reach of care by use of technologies that allow for use of machine learning and other types of technologies to provide guidance to consumers when they need it. And use that technology as a transformational [00:19:00] tool to supplement what can occur in a face-to-face visit .in front of this screen, but [:
And so are you looking at that kind of trend where you go, Hey, look, there's going to be less caregivers and more people requiring care with the baby boom generation. Are those the kinds of things that you keep an eye on as an investor?er care of themselves or the [:
And to utilize care coaches, to utilize [00:21:00] nurses, you mentioned a nursing shortage, other care professionals that may be able to supplement their needs in ways that we wouldn't be able to do without the technology. And I think there's some promise held there for helping to address those shortages by using the tools that are available through these modalities.ontinue to receive funding in:
It's interesting. We used to think telehealth was a great medium for people who had to travel large distances, but we found that in New York City, you know, tons of people prefer to do telehealth in their location or even from their place of work and see a doctor when it's convenient to them and quickly and easily. So care everywhere, access to care. Are there [00:22:00] any other areas you think are going to see an influx of funding in 2022?aw growth in mental health in:
So I think that there's a lot of [00:23:00] learnings that are coming about how best to engage people. Even in, in group sessions using mental health tools. One of the companies that we've worked with that has done a terrific job, helping people with severe anxiety and depression, obsessive compulsive disorder is No CD and they're in network with many plans that they're helping people with obsessive compulsive disorder become diagnosed more quickly. As well as delivering [00:23:30] them services that they can access on their own terms. Self-help tools, some ability to speak with care coaches as well as to get online appointments, if they need stepped up care or live appointments, if we need to schedule them.
So it provides that wraparound set of tools to help those individuals keep their condition in control and in check, which is really beneficial for them, as well as those who are sponsoring your care.M and A. When you talk about [:
Lee Shapiro: Ginger and Headspace as an example.an, Livongo was a big deal in:
Lee Shapiro: Bill they'll certainly be even more M and A. There was a lot of M and A this year in the digital health sector. It's about getting to scale. Look, there's a conundrum that exists in digital health. As a company, you and I were talking about early stage companies, a short while ago, [00:25:00] you need to prove value.had built the trust with the [:
In other cases, we built some offerings in house. We were working on things in cholesterol, man. I think that what you'll see is companies come together as they're meeting the demands of the market. Clients want one throat to [00:26:00] choke. They want an opportunity to go to one source and say, look, you need to handle multiple offerings for my members because we aren't set up to manage 70 different offerings.rs. But I think as a counter [:
They're making progress on their own. They're going to continue to bulk up with other offerings so they can go directly to some of those sponsors and to be able to sell to them without going through some of the intermediaries.bit. And when you look at a [:
Is that still a significant barrier? And you say, well, okay, how are you going to get that data? Do you know how you're getting at that data? There's multiple EHRs. There's multiple, you know, I mean, does that cause you concern or are we moving beyond the interoperability challenge for startups?back to you because I don't [:
Bill Russell: Oh, hundreds. I mean, yeah, hundreds and multiple instances of that. You know, just Allscripts alone, we had multiple instances of Allscripts for heaven sake. Yeah, we, we identified over a couple hundred systems that had a [00:28:00] field in it called patient name. Patient first name, patient last name. And I thought that's interesting in and of itself. Wouldn't you want them all to share that same single thing?
Well, that's, that's why I asked the question because it seems to me that the startup has to make a decision. Do I really need this data? And if I don't need this data I'm probably in a better position than if I do need this data, because now I have to delve into that world of is this clean data?I getting it from the right [:
Lee Shapiro: So the reason why I raised this is because when you think about pharmacy management systems, lab information systems, surgical information systems, supply related systems, there is a vast number of systems that sit inside the [00:29:00] walls of a given hospital. Maybe less so in a provider office, but even there, there may be multiple systems.you're going to do with that [:
And what's the currency of the data. And how important is it to your offering when you're making that decision as an early stage company? I think the next real challenge is not around. The data, but what you do with that data, how do you interpret it? What are you learning from the data? And how can you act on it and to do that, as you said, in a secure way, because having lots of open-ended points is not going to [00:30:00] happen in an environment that is now fraught with ransomware and other huge challenges to healthcare organizations. I think it's going to be harder to access data going into 2022 than it was coming into 2021.w host of, and it's going to [:
We can create a whole host of new offerings around that to keep people healthy, to make them intelligent. I mean, going back to your value proposition to make them informed, to make them more intelligent on their health, to [00:31:00] connect them people with, with similar conditions and whatnot, and to get them focused on health at an earlier age.
And maybe this is just the digital wonk in me, that's saying, you know, we can do this if we could just free that data. But I mean, that's my theory. I mean, shoot holes in it. Don't don't.. Everybody has a login into [:
But what they're using that for is to help clinical research organizations, some that are inside health systems, others that are outside third parties that are [00:32:00] working with life sciences and biotech companies, to look at that information and understand who might be eligible for a clinical trial. They're working with a number of organizations that are disease focused like on MS or cancers and the like to help them locate individuals who might be candidates for different clinical trials.ns built on top of that data [:
Let's look at those individuals, see who meets the criteria and then talk to them about whether or not, they'd be interested in joining this trial. And it's speeding up that process and helping us get a new drugs to market more quickly. And that's just one example of things that I [00:33:00] think will happen with this type of data going forward, blue button kind of the fire standards will make some of that easier, but it will only be easier Bill we're able to get, not just the EHR, but all the various systems interconnected in one way.s to make it more accessible [:
Bill Russell: We've seen Mayo do that. Now. We've seen Providence and a whole host of other primarily faith-based systems come together around Truveta to do that. And it's interesting. Here's my take on that. As long as the security is set up correctly, and as long as we take [00:34:00] patient privacy, if we keep that at the forefront of whatever models, whatever architecture we're putting together, I think we're going to be, that is going to be a phenomenal move forward.
I fear what we're actually doing. I'm not sure I fear this in some cases. In others I do. When we bring people in from outside of healthcare, they may not understand privacy and security as well as they should. And I'm keeping a close eye on that. That's my, that's my greatest concern.ing is building a repository [:
But I wasn't asked to put my data in into that system. And so I, sorta, I have pause there. Now on the flip side, the potential on bringing that much data together, Cosmos, Truveta, is just, for the good of mankind is [00:35:00] significant. I just don't want people making that choice for me and saying, well, of course you want to put your data.
I probably do want to put my data in, but I'd like to choose which one of those three, I want to put my data and not necessarily. just throw it into all three, just because I happen to visit one of their hospitals. I, I don't know if that answers your question, but that's sort of how I'm thinking about it.mmon good. And so we'll see, [:
Bill Russell: Yep. I would be remiss. We only have a couple minutes left. I'd be remiss if we didn't talk about Cerner. And this is an interesting one to me. I mean, there's a couple of things. One people will talk about the valuation. I think it doesn't tip over at 30 [00:36:00] billion. It's a little less than that. Maybe 28 billion. But from a valuation standpoint, if you look at Athena health was valued earlier this year with like a fraction of the revenue. At a lot more than what this would indicate that Cerner was worth. But on the flip side, this is a complex deal, isn't it? I mean, what do you think? First of all, what do you think of the valuation? And then what do you, what do you think overall, it's going to take for this to be successful from Oracle standpoint?o: Well first, you know, the [:
But I think that this is beneficial for Cerner in terms of allowing it to have the opportunity to leverage the resources and some of the technology tools. Oracle brings operating [00:37:00] as a independent, almost like what Microsoft did with Nuance to allow them to operate somewhat independently, keep the leadership team in place and to grow inside Oracle. Oracle brings some technologies to help Cerner move into the cloud. You probably know that ser had a large hosting business called Cerner works. And that can be moved into the cloud, a lot of health data in the cloud, allowing that [00:37:30]fluidity that you were just describing to exist in a secure way.hopeful that what this will [:
Better access for information is talked about voice interfaces that will make it easier for providers. I think what he'll learn, maybe the second part of your question is everything in healthcare takes longer than what those outside think it'll take. And so it's going to be a while before they can retrofit those Cerner applications and start focusing on those new digital tools.eful that they want to start [:
Bill Russell: Yeah, that was, that was one of my learnings coming into healthcare. I set out these plans and I had the old team and I would say, you know, we'll do this in the first year.know, as, as I look at this [:
They moved it into the Oracle cloud. And if they're able to grab some of the Cerner clients and move some of their cloud business over there as well, they're going to get monthly recurring revenue off of that. And that's phenomenal for them. And if they can do some integration with some of their [00:39:30] other tools with Cerner you know, maybe you can create a a more integrated package.ition of that size. It takes [:
I think it's based on a strategy of maintaining the Cerner clients they have until they can really, really move forward. So this this'll be interesting, but I think as you tried to point out earlier, healthcare, I agree with this. I think healthcare is overly focused on the EHR. I mean, [00:40:30] we get so focused in on that one piece of the puzzle.
And there, are a lot of other pieces to really focus in on in terms of the data piece and in terms of the operability. And in terms of specifically the experience for both the clinician and the patients. There's a lot of other tools that play into that and you know we'll see what that happens.ransaction, but Oracle has a [:
So I agree with you. It can be beneficial their cloud business, but also their clinicals [00:41:30]business. So it gives them another book to point their are shareholders to, to say why they would justify this being the largest acquisition that Oracle has ever made.
Bill Russell: And Cerner was making some moves with New York life and others. And so they were doing integration agreements with some of those players. And I know Epic does.
Lee Shapiro: For underwriting. Using healthcare data for underwriting.ve today. Two days after the [:
Lee Shapiro: I'll ask you for one prediction.
Bill Russell: Sure.
Lee Shapiro: Does this mean that that Epic might merge with someone in the future or will remain independent as Judy looks to retire in the future?er will that they will never [:
They're slow to adapt to this. I mean, they could be a phenomenal partner for every innovator in the industry. If they decided to say it doesn't all have to be [00:43:00] built in Madison, Wisconsin. Now you may not be able to comment on this, but as we were sort of talking, we thought they really could be the platform that enables so much innovation into the future that it really does cement them for the next decade or two in the place they're at. But if they continue to, I don't know, try to hold the reins and put up toll booths every time an innovator wants to access the data that that'll keep causing people to look for, is there a different way to do this?Can we do this in [:
Lee Shapiro: Well, Bill I think that you certainly see some potential there that maybe they'll catch on too, but I agree with you an open strategy is certainly better than closed.nd that's why companies like [:
So we think that this is an industry that's still super important. I mean, healthcare is you know, 20% of our GDP in terms of spending. Maybe more last year with pandemic. And so finding ways to leverage technology to improve all of our health is really important, which is why we're so excited about what we do every day at 7wire.[00:44:30]
Bill Russell: Lee. Thank you again for your time. Hopefully we'll catch up with each other sometime after we get through some of the next stages of this pandemic. Thank you again for your time and sharing your wisdom and experience with the community.this weekhealth.com or they [: