Healthbox Investor Day 4/4/12

Since Chicago is only a train ride away for me, I made it down for the Healthbox Investor Day today. I covered Healthbox when it announced this class back in December. Unfortunately I had something come up last minute that required me to leave halfway through the presentations, so I only saw five of the 10 companies present, plus the opening Healthbox song and talk by Todd Park. For the startups in the second half, sorry I missed you.

The event was hosted at a theater / meeting space that was rather nice, much nicer than the facilities for Blueprint’s demo day, according to an investor that I spoke with who attended both. The show opened with Jonathan Mann playing “The Healthbox Song” that he had written. It was a nice touch.

Healthbox Song from HISTalk Mobile on Vimeo.

Then Todd Park dazzled with 30 minutes’ worth of engaging material and unbridled excitement about the changes coming to healthcare. His underlying message (not new) was that shifting incentives and data liberation (liberacion in Park’s words) were going to bring about a revolution in healthcare. Really, Todd is the perfect torch bearer for this message and for the power of entrepreneurship.

After Todd’s engaging talk, the first five companies presented. My assessments are below.

CareWire. David Nichols, COO and co-founder, had the unenviable task of following Todd Park. CareWire uses text messaging to — I think I’m paraphrasing — guide patients to and through appointments. The idea is that CareWire intakes appointment and contact info for patients and then sends them targeted text messages before and after the appointment, with a goal of improving “attendance, compliance, and satisfaction.” The use case presented was preventing day-of-surgery cancellations due to the patient forgetting to avoid eating after midnight. A current pilot of CareWire has covered 16,000 appointments with a 78% response rate since February 21. The company also just signed with Park Nicollet in Minnesota as a pilot site. Both David and the other co-founder were previously with UnitedHealth.

According to David, the company is targeting high-volume practices in two buckets – primary care and subspecialties. If I were CareWire, I’d focus exclusively on subspecialties, especially surgical ones that are big users of ambulatory surgery centers. A more focused approach makes integration points less of a headache. I’d also add ophthalmology to the list of targets because I didn’t see it on the slides. My other question would be about integration with existing PM systems. It sounded like it doesn’t integrate right now, so I’m curious how it gets appointment and patient contact info.

The cost of the system is based on the number of appointments handled. CareWire is looking for $1.2 million to get the company 12-18 months of operations. That amount seems high, especially with only six weeks of pilot (I’m very cheap, though.) Regardless of the ask, the concept is sound and if they can show the project 4-6x ROI, they’ll be set.

My Coupon Doc. The two founders, Kishor Eechambadi and Raj Mehra, jointly presented this one. This service helps patients find manufacturer coupons for medications. The long-term goal is to become the destination for medication coupons, a lofty endeavor. Some interesting stats to frame the problem are that pharma coupons only have a 5% redemption rate and only 20% of chronic disease patients report getting med coupons from doctors, which are their main distribution point. Pharma companies like coupons because they improve retention and adherence.

To improve upon the current process of physician distribution of coupons, My Coupon Doc is offering a solution to consumers through the web, provider systems, kiosks, and retail pharmacy (point-of-sale). To test distribution, the company has signed a pilot with Merge Healthcare (a Healthbox sponsor) and Hello Health, an EMR and physician portal. I was most intrigued by having the coupons come up automatically when a person is buying a medication at a pharmacy, but My Coupon Doc was not able to secure a pilot with a retail pharmacy to test this. Since Walgreens is a partner and investor in Healthbox, that’s slightly disappointing.

If there is only going to be one winner as the premier destination for pharma coupons — which I think is better to frame as the premier repository of pharma coupons — I think My Coupon Doc is going to face stiff competition from GoodRx, which already has a pretty slick site and mobile app for finding medication prices. It’s only a matter of time before GoodRx adds coupons and other pharma-sponsored access programs. Also, GoodRx just raised $1.2 million, so it’s not spending time pitching investors. But, GoodRx doesn’t have any healthcare partnerships like Hello Health and Merge, at least that I know of, and I think direct to consumer can’t be the only channel.

My Coupon Doc is trying to raise $650,000, with a goal of building the service to 110,000 coupon redemptions each month. The ask seems pretty reasonable, especially as it is rolling out on 500 Merge kiosks in June.

PUSH Wellness. Charlie Zei, co-founder and COO, presented his employer-facing wellness incentive platform. The idea boils down to using real cash incentives, paid by employers, to employees that improve or maintain healthy behavior. It’s based on evidence of the effectiveness of cash for incremental behavior change. Cash payments are up to $600 annually (I think that was the amount) a number that sounded like it was tied to real data on behavior change. According to Charlie, most employers see no ROI for wellness programs.

PUSH sells to self-insured employers. At enrollment, employees are evaluated onsite across five domains and get a proprietary PUSH Score. This score is the basis of incentives. If employees are already healthy, they are paid each month to maintain that status. Others are paid monthly for improvements. If health doesn’t improve, users are given a $0 check but have missed incentives accrue each month so they can still be redeemed later.

The system is being tested with one employer and 200 employees in Chicago. The pilot, which has been ongoing for three months, has 70% participation and 58% improvements in health status of participants. The cost for the pilot has been $16,000 and the savings in future healthcare costs is estimated to be $60,000. It’s good data, albeit not a very long pilot, and I’m not sure how future healthcare costs are defined.

My biggest issue with PUSH is probably the onsite assessments that are required to administer the evaluations. I think the company is breaking even on these. This will be the hardest aspect to scale, but PUSH hopes to use partners for it. If it could get a pharmacy like Walgreens and a kiosk vendor like Merge, that would certainly help show this could be scaled.

The company is looking for $1.3 million for 12 months and one big pilot. This ask seems high to me as well. It also sounds like it wants to scale nationally quickly, which will be hard if it can’t figure out an easy way to do onsite assessments. I’d focus on Chicago and surrounds for a more regional approach, though I imagine larger employers will demand a national network to sign with PUSH. The other co-founder, Greg Vachon, is an MD at Northwestern.

SwipeSense. This was by far the best presentation of the bunch. Founders Mert Iseri and Yuri Malina, who looked to be much younger than the other founders, put together an engaging 15 minutes with simple slides and clear messaging.

SwipeSense is a portable hand-washing tool for nurses that clips onto belts (as if nurses need something else tucked into their waistline.) It’s a pretty smart concept, though. Users simply swipe their hands down past the device and get a shot of hand sanitizer. The system then connects to wall-mounted hubs to collect usage and location data. That data is made available via a web portal for real-time compliance tracking. Dynamic goals can be set for compliance. This is a massive improvement over the current way compliance is tracked with self-reported hand washing, which, according to two doctors I spoke with after hearing SwipeSense, is not always accurately reported.

The value proposition is obviously preventing hospital-acquired infections. The company charges a subscription for refills of hand sanitizer, each of which is supposed to last about one shift. There was no mention of mobile alerts to users about compliance, which I imagine will help by closing the feedback loop. If successful, I’m sure it will get there.

One question my wife had when I asked her what she thought was how they track compliance accurately if they aren’t capturing usage of wall-mounted hand sanitizers. Her theory was that most doctors, especially those who float on and off of hospital floors (like specialists), would never wear the device, so they would still require something to be wall mounted. This is probably true, but SwipeSense can targeted at nurses and those users will hopefully find a way to break the habit of using the wall-mounted dispensers.

The company was able to secure five pilot sites around Chicago, including an academic center, community hospital, and urban trauma center. Most impressive. The device cost is $20 and the founders see this dropping over time.

To meet the demands of five local pilots, the company is seeking a nice even $1 million. It needs to show that it actually works at improving hand hygiene and ultimately reducing infections, which are still big leaps. I’m curious how long it takes them to raise that much money. I really liked these guys, especially considering that the concept is hand hygiene 2.0, something I never thought I could get excited about.

Cara Health. Cara used to be Patient Journey Record, but apparently (and thankfully) changed its name while in Healthbox. That alone might have been worth the 7% equity it had to give up to get into the incubator. I wrote in December, referring to Patient Journey Record, that “it’s one of the worst names I’ve heard for a company in a while.” Apparently I wasn’t the only one with that opinion.

CEO Enda Madden and CMO Carmel Martin MD, PhD, presented for Cara. I felt bad because it felt like the air was sucked out of the room when Cara started. It wasn’t really Cara’s fault, just that the guys from SwipeSense that presented before them had so much energy and enthusiasm followed by a much more subdued and less engaging Cara team and presentation.

Cara offers a platform that utilizes “non-clinicians” to call patients discharged from the hospital. It analyzes the voice responses by patients to assess risk. Triggers are set to alert care managers for additional interventions, hopefully proactively avoiding an ED visit or an admission. The differentiator, according to Cara, is doing ongoing risk assessments and not just static assessments at discharge. Also, the company feels the personal touch of a human call is more effective than machine calling, like Eliza.

The data presented sounded like the same data at the start of the incubator, namely a 51% reduction in avoidable readmissions from a pilot in Ireland. I’m curious about the overall reduction in readmissions, not just avoidable readmissions.

The company did not list a specific amount of financing it was pursuing. I also can’t recall any mention of new pilots or customers. The team behind Cara, which is based in Ireland, is impressive on paper. I guess we’ll have to way and see how it progresses.

Overall, the day was very well put together. Kudos to the Healthbox team for that. Supposedly 400 people were there and I think 130 of those were investors.

In terms of stage of companies, the Blueprint companies from last week as a whole were further along in committed financing. This might be because there was a noticeable difference in how much money companies in the different incubators were trying to raise. With Blueprint, the highest ask was $750,000. With the set of Healthbox companies I saw, the lowest ask was $600,000 and the other three were looking for $1 million or more.

Again, I’m really sorry I missed the second set of presentations. Companies in that bunch included Dermlink, SwiftPayMD, CareHubs, Corengi, and UnitedPreference. I was really looking forward to hearing more about DermLink and CareHubs. CareHubs is a cool concept to me and I’m curious how it evolves and scales. I’ll have to find some stories that covered those companies and link them in my next post.

Travis Good is an MD/MBA involved with health IT startups. More about me.

  • Thanks for the comprehensive writeup on the Hbox event!! Sorry that we didn’t get a chance to connect after the presentations.

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