Healthcare is ripe for disruption and one of the largest U.S. hospital systems is picking up the pace of investing in nascent firms in the mHealth space. Cedars-Sinai is the largest independent academic medical center in the Western U.S. and it is scheduled to soon begin its third cohort in the Cedars-Sinai Accelerator Powered by Techstars.
It’s a unique program designed to help startups develop products and systems that make healthcare more efficient and economical. Cedars-Sinai teamed up with Techstars to create and help facilitate the accelerator.
Each session there are 10 companies selected for the program with the accelerator taking a six percent stake in the startups with an opportunity to invest more via a convertible note of up to $100,000 when the participating firms next raise capital. These companies also get $20,000 to cover expenses that make their participation possible.
Jim Laur, Cedars-Sinai Vice President for Legal and Technology Affairs and Matt Kozlov, managing director with Techstars discussed the accelerator with Open Mobile Media’s Robert Gray.
OMM: Why is Cedars-Sinai hosting an accelerator? And after the first two cohorts of the accelerator, what is the biggest takeaway?
Laur: We’re starting to figure out what we’re doing and why we’re doing it. There’s a huge focus on making things more efficient, more cost-effective, increase consumer satisfaction levels, engage people in why they entered healthcare as professionals. We thought it’d be great to have a platform, a portal for these companies working on the same challenges we’re struggling with to bring them in and work on them together. Healthcare is very complicated and difficult from an outsiders’ perspective to figure out how something is reimbursed, how it fits in the workflow, how it disrupts something that’s already in place that’s not easily disruptable, so we figured working directly with companies 10 at a time, we could make some powerful change and be part of the driver.
Kozlov: I had a naïve assessment that healthcare technology would be slow. I was skeptical that one hospital could change the arc and trajectory of a healthcare tech company. What I’ve learned is that Cedars-Sinai is incredibly influential when it comes to market adoption.
OMM: How much can mHealth lower healthcare costs?
Laur: It’s a trillion dollar question. There’s a component driving cost, the view of technology as an element of keeping us alive longer and dealing with health issues not thought about 10 to 15 years ago, it’s always going to be expensive in a quantifiable way. There’s a huge swatch of healthcare that can take advantage of the power of technology and do it quicker and less expensively and connect with healthcare when they need to be connected and stay at home when they don’t. You can utilize things to get people the level of healthcare they need in the right setting, like not coming to the ER (emergency room) for the flu. That’s a huge cost and burden on the system and not pleasant for the patient.
OMM: What are some examples of mHealth savings?
Laur: Certain categories can be diagnosed visually and benefit from Facetime technology. If you have pinkeye, if you can harness that with no car ride, not missing work, the doctor can prescribe something; there’s a lot of things you can do with a blood pressure cuff, check heart rate and things that can be transmitted and the doctor can diagnose without you entering the system. We’ve seen a big mix of companies in the mobile and diagnostic space trying to do thing in a better, cheaper, and faster way.
OMM: All 18 companies that have gone through the accelerator have secured a contract with Cedars, can you call out a few doing some groundbreaking work?
Kozlov: Deep 6 AI learned how difficult it is to recruit patients into clinical drug trials (and) they built an AI engine that analyzes all the unstructured text in the electronic health record and finds the best clinical drug trials in that market for each patient. They’re filling patient panels12 to 13 times faster, a big win for pharmaceutical companies bringing drugs to market faster and drawing more research dollars and to health systems they work with. It’s also a win for patients and for physicians because they can give better quality of care and give new treatment. Applied VR uses virtual reality to help manage and reduce pain and anxiety before, during, and after procedures. WELL is a B2B play. (It’s a messaging app used by healthcare officials and providers to reach patients between visits). The company grew recurring monthly revenue from about $5,000 before coming into the program and grew to over $80,000 shortly after program. They’re now in 120 departments at Cedars.
OMM: Are you considering expanding the program?
Laur: There are obvious connections between the network of academic medical centers that we’re in contact with through research collaborations and challenges healthcare in many countries that are exactly the same that we have. Startups and entrepreneurs could come into the US to break into the market, bring technological advances to the US from this portal. The same goes for the other way…finding a way into Europe, going to India. It’s an eye opener. We can benefit from that cross-pollination.
Kozlov: Stasis Labs, one of the better-funded Los Angeles healthcare tech companies and from the first class of our program, connected a vitals monitoring device for unmonitored beds in the third world—in 40 hospitals in India. It’s a prototypical Techstars/Cedars support story. On the highest end of the monitoring product line, the Philips and GE monitors cost $25,000 to $30,000 and need an expensive network and a lot of beds can’t afford to monitor them. (Stasis Labs) does it by tablets being posted on nursing stations in each ward and they can monitor 20 to 25 patients on a tablet. A typical middle class hospital outside of the US monitors 20% of the beds versus 85% in Cedars.
OMM: What’s the prognosis for the program?
Laur: You can imagine it’s exciting for outsiders to come in and work with Cedars-Sinai, but we didn’t bank on how excited our staff was in working with the class to figure it all out, rolling up their sleeves to solve problems. The program was envisioned as a once-a-year, annual program for five years to see what we could together…We pushed the cycle to be every eight to 12 months to capture that internal excitement and energy. That gives you an idea of how symbiotic that is.
OMM: Will it continue in perpetuity?
Laur: As long as we’re getting a lot of extremely exciting applicants that connect to our mission of improving the way healthcare is delivered, we’re enjoying the partnership with Techstars, their expertise and they’re learning from us. They’re our global partners, we’re two cohorts in and thinking we’ve got a really special thing going on.