The hottest health-tech startups.
‘Blood cells – out of the way!’
in the 1987 Hollywood movie ‘Innerspace’, pilot Tuck Pendleton and his submarine are shrunk to microscopic size and injected into the bloodstream of another person. What was Sci-Fi fantasy three decades ago is not far from reality today. Although it is still highly unlikely that the near future will see people will being shrunk small enough to dance on the head of a pin, ideas like implanting miniaturised technology in the human body are something scientists are really working on.
Last year, for example, Google presented the prototype of a contact lens that measures blood sugar levels and provides a warning when they get too high or too low. A miniaturised radio chip is integrated between two layers of the lens. The lens measures the glucose values in the tear fluid once a second and sends them to the corresponding smartphone app. It is currently estimated that the smart contact lens will reach market maturity within the next four or five years.
When we consider, for instance, the increasing ease with which the human genome can be decoded, it becomes clear that advances in information technology have an enormous influence on this market. At the end of the 1990s, the cost of decoding the sequence of a human genome – so to speak the building plan of every human being – cost in the region of several hundred million US dollars. Today, however, the same procedure cost only a couple of thousand dollars, thanks to cheaper and more powerful chip technology. Startups like 23andme now even offer a partial analysis of your own DNA for only 99 US dollars. The results reveal, for example, whether you are likely to fall victim to certain types of cancer.
Investors have not been slow in recognising the market potential of groundbreaking developments like this: While US investors pumped 1.3 billion dollars into digital-health startups in 2013, last year’s figures showed that investments had risen to 4.1 billion dollars, almost twice as much. If we believe the research institute Rock Health, this year’s figures will be on a par with the high level recorded in 2014.
‘CEO of your personal health.‘
What’s particularly fascinating about health technology and the new developments in this field is, above all, the aspect that it’s all about products that have a direct influence on us and our bodies. So anyone looking for better health, easier access to medical treatment and, in particular, the promise of increased personalisation, welcomes it all with open arms.
Daniel Kraft, a medical practitioner at Singularity University in Mountain View and founder of the Exponential Medicine Conference, has a very concrete vision of what such personalised healthcare could look like. He forecasts that today’s healthcare services will change from being simple ‘sick care’ to ‘Healthcare’ with a capital ‘H’. Today, we react and seek help only if we feel ill. In future, according to Daniel Kraft, the utilisation of digital technologies will make it possible for us to keep a sharper eye on our health. The data gathered by fitness trackers, smartwatches and wearables are only the beginning. ‘Wearables will be replaced by “Insideables”’, says Kraft, and means that smallest sensors ingested or implanted in our bodies will monitor our vital functions and show us the bigger picture of our personal health. The result: ‘In the not too distant future, we will all become the CEOs of our personal health.’
Until we get to this point, wearables must first become universally accepted. The outlook here is good: recorded sales of wearables rose to 18 million, alone in Q2 of 2015. For the coming year, the US market research and consulting agency IDC reckons with sales of 100 million devices, the majority of them – around 90 million – being wearables with wrist straps.
Stumbling blocks and red tape.
The road to becoming the ‘CEO of your personal health’ is long and stony. After all, the health system in Germany is even more strictly regulated than in the USA. ‘Various lobby groups and health sectors, federal decision structures, technical complexity, financing difficulties, strict data privacy and security laws – to name but a few of the stumbling blocks that bar the way. These are the barriers that all startups on the German health market must face in their efforts to bring digital applications or systems on to the market’, explains Arno Elmer, health expert and professor at the University of Applied Sciences for Economics and Management in Berlin.
Despite the fact that standards for medical products in the USA and Germany are on the whole comparable, the framework conditions are not. In Germany, Arno Elmer sees high regulatory hurdles in combination with a ‘challenging mixture of groups representing patients, providers of services and financing bodies’, all of whom make the definition of sustainable business models and the promise of added value an extremely difficult undertaking. Above all, it delays market access for several years: in the words of Arno Elmer, ‘This explains why only one out of every hundred German startup enterprises is founded in the health segment.’
‘OK – we’ll take our idea to America’
These were the problems that Klara had to battle against. The startup based in Berlin offered its users an opportunity to have suspicious-looking skin conditions remotely diagnosed by a dermatologist. A smartphone photo was all it needed and a doctor reported back with an assessment within the following 48 hours. A perfectly simple procedure – with enormous potential for making the healthcare system more efficient.
After all, 90 per cent of all skin conditions can be diagnosed by looking at a picture. ‘Of these 90 per cent’, explains Klara founder Simon Lorenz, ‘70 per cent can be treated without even visiting a doctor. Actual face-to-face consultation with a doctor is only necessary in around 30 per cent of the cases’. As can be seen, the majority of skin conditions can be relatively easily treated. Unfortunately, dermatological reality here in Germany is a quite different matter. After waiting months for an appointment, ‘Herr Doktor’ often quickly identifies the patient’s mole or suspicious-looking skin condition as something completely harmless.
As the legal and infrastructural situation in the USA is significantly more favourable than in Germany, last year saw the startup finding its feet in the USA. In the meantime, Simon Lorenz and his team have left Europe behind and now offer their services exclusively on the US market. ‘The USA is the more attractive market, mainly because controls and monetisation options for medical services are much more transparent. It also explains why medical practitioners are much more open to innovative, and possibly disruptive, tools that may be used to increase efficiency and quality.’ Telemedicine laws, the lack of electronic prescriptions and above all the unwillingness to accept progress and take a big step into the future, literally paralyse enterprises attempting to make a start in the German telemedicine segment. ‘In the USA, the situation is completely the opposite’, confirms Simon Lorenz. The telemedicine ban in Germany provides, for instance, that ‘Physicians may not perform individual medical treatment, in particular medical counselling, exclusively via print and communications media.’
At present, the founding team is expanding Klara as a general contact platform for patients and doctors, and for all medical disciplines. Although the services currently focus on New York, the future of Klara foresees nationwide coverage. The provision of services in Germany is currently not on the agenda, even though the product team remains based in Berlin.
My name is Oscar, I do health insurance.
Another German is also actively involved in one of the hottest health-tech startups in the USA: Mario Schlosser is one of the three co-founders of Oscar, a startup he launched together with Joshua Kushner and Kevin Nazemi. The startup based in New York currently operates only in New York and New Jersey and offers health insurance policies that can be easily taken out on the web and offer a convenient service that makes it possible for policy holders to contact the physicians of their choice – even on the phone, if they wish – for an initial assessment of their state of health. Oscar not only insures patients, it also promotes prevention. For example, the startup gives away a dollar a day to policy holders who achieve their daily exercise quota and record it on a fitness tracker. This runs to a maximum of 20 dollars a month, and means that active Oscar users can save up to 240 dollars a year on their insurance premiums. ‘The vision for Oscar surfaced in my mind around three years ago when I took a closer look at the bill for my health insurance and discovered that I didn’t understand a word of it’, explains Oscar co-founder Joshua Kushner. An absurd situation that he felt would have to be changed.
‘The vision for Oscar surfaced in my mind around three years ago when I took a closer look at the bill for my health insurance and discovered that I didn’t understand a word of it’, explains Oscar co-founder Joshua Kushner. An absurd situation that he felt would have to be changed.
Simple use and transparency.
New legislation in the USA helped him to realise his plans. Namely, since the launch of Obamacare, the big health reform initiated by Barack Obama, every US-American citizen – with only a few exceptions – is obliged to have health insurance. Also new was that citizens with limited means would receive state-financed subsidies to help them pay for it. Health insurance cover could be taken out online in specially established government portals – or from private health insurance providers like Oscar. The startup soon found itself addressing a multitude of new policy holders and simultaneously offered the additional benefits of the simple use and transparency so typical for technology-driven startups.
In principle, a very promising mixture – one that also soon caught the eye of astute investors. To date, they have injected 300 million USD into the startup, among them, Peter Thiel. In September 2015, Google gave Oscar a massive, 32-million dollar shot in the arm. In the meantime, the startup is reported to have over 135,000 users, around half of them from New York (figures from June 2016). According to recent reports, the startup is battling against the exceptionally difficult market conditions in the US health insurance segment: for instance, the individual premiums were much too low and market potential was not as strong as initial estimates showed. According to the New York Times, the startup made a heavy loss of 92 million dollars last year, and first-quarter losses of a further 39 million in 2016.
Big Data science.
Startups are attracting attention not only in the provision of medical services, but also in numerous other areas in the health and medical segment. A hot trend that can also be explained by the breakthrough of wearables: self-tracking of personal health, aka as the ‘Quantified Self’, is made much easier with the aid of digital technologies. With the Clue app, for example, makes it easier for women to keep tabs on things like their menstrual cycle. Onelife accompanies expecting mothers through their pregnancy, provides tips in the various phases and, if wanted, can also record health indicators such as blood pressure or general well-being and collate them as reports for the doctor. The ‘Owlet“’ is a smart baby sock that enables young parents to constantly monitor the vital signs of their offspring by smartphone. Another provider, Mysugr offers diabetics a range of apps and hardware for analysing and documenting their blood sugar levels.
Incidentally, the data generated by all these services serve purposes other than personal health monitoring, they can also be stored and used in research. At 23andme, for example, users can agree to have their DNA findings from partial analyses stored anonymously in a database. Scientists then take advantage of such data in their research projects. For example, the startup prides itself on having the world’s largest database of genetic information relating to sufferers of Parkinson’s disease. This makes the life of research scientists much easier by avoiding the need for laborious collection of data to establish a basis for clinical studies.
Or uBiome – the microbial genomics company with the self-coined slogan ‘Big Data from Bacteria’. Their idea: the analysis of the bacteria living in and on the human body, the so-called microbiome, by DNA sequencing methods. For this purpose, the startup sells its so-called ‘Citizen Scientists’ one of a range of kits for taking the required samples, for example from the gut, mouth, nose, genitals, and skin. The ‘Citizen Scientist’ then sends the samples back to the uBiome labs for screening. The test subjects can then compare their personal values with those of others, for instance with vegetarians or persons currently taking antibiotics. If consent is given, the data are then added to the database of an extensive, scientifically conducted analysis of the human microbiome.
The death of death as we know it – or the solution for a ‘problem’.
Where startup mentality, R&D, pots of money, strokes of genius and a little Frankensteinian madness meet, is where projects that lie far beyond our wildest dreams begin to bubble to the surface: The disruption of death. ‘The biggest unsolved challenge of the modern world is the transformation of death from a natural and inevitable fact of life into a problem for which there is a solution – a solution to which I will contribute everything at my disposal’, explains prominent venture capitalist Peter Thiel. Thiel therefore pumps millions into research with this goal in mind. Alphabet is one of the players in this game. The group has invested more than 750 million dollars in Calico, a subsidiary conducting research in the same direction. Sergey Brin and Mark Zuckerberg are the big names behind the Breakthrough Prize for Life Sciences, which honours groundbreaking advances toward understanding living systems and extending human life. What’s more, Ray Kurzweil, Googles Chief Engineer, believes that the next 20 or 30 years will see us sending microscopically small nanobots into our bodies to help clear up problems with our immune system and eat away tissues affected by disease at a molecular level.
It seems a little like hubris on the part of the euphoric technocrats of Silicon Valley to believe that they could one day conquer death as we know it – not to mention the moral implications it would bring. It also bears witness to an, in some respects, pseudo-religious obsession for ‘improving’ the world – whatever it may cost. On the other side of the coin however, it’s quite probably that hardly anyone would mind living at least a few years longer. This dilemma illustrates that the disruption of the health system inevitably leads to new issues that must be addressed by society as a whole and not left to be handled by a few technology startups or representatives of the world’s technological elite.
Which brings us back to the question: How far do we allow technology to go?
The diversity of new startups in the health segment shows that disruption in the health system takes place at the interface between the provision of healthcare services, research and technology. Startups like Klara and Oscar work with new technologies and neat apps to provide easier access to healthcare services, founder-teams like those from mysugr and Onelife and, in general, the increasing spread of fitness trackers and wearables, all contribute to a new dimension of monitoring and checking of our own, personal health. Without exception, these services and solutions are founded on rapid developments in digital technology and all of them generate vast amounts of data. Data that are in turn invaluable for research – as confirmed by the examples 23andme and uBiome.
In the best-case scenario, our future may well turn out to be a win-win situation for all concerned: A multitude of services would enable us to monitor, maintain and understand our health and well-being in much better ways. At the same time – assuming our consent – our data would be integrated into worldwide research projects. Should these enormous masses of data one day lead to the eradication of diseases like Alzheimer’s Syndrome, cancer or AIDS, it would benefit us all. However, the foundation stone for this brave new world of health and well-being has yet to be laid: namely, in a global discussion on the social and ethical issues, repercussions and implications of what technology may be permitted to do and what must remain forbidden.
Luca Caracciolo is Editor-in-Chief at t3n-magazine. Besides the newest trends and online innovations on social media, Luca has his focus on virtual reality. This article was published first on t3n on 09.09.2016. t3n-magazine is the leading German-language online and print publication focusing on topics like eBusiness, future technologies and digital work.