Artificial Intelligence has made its way into the highly regulated healthcare space. As tech giants search for new resources for proprietary data, Daniel Burnett, a visionary physician entrepreneur and inventor, biomedical innovation professor at Stanford and UCSF, is tapping into medical devices for a steady stream of actionable clinical insights about the patient by making the conventional medical devices smarter.
Last week, the San Francisco Bay area had executives from all over the world visiting for JP Morgan Healthcare week. Leaders in the healthcare industry, startups, and venture capitalists connected at conferences and networking events to target major problems in healthcare. Over 20 great startups and experts presented at Silicon Valley DeepTech Summit 2019, with a focus on affecting 1 billion lives, hosted by F50. The event featured a high-profile panel on Predictive Health and medical devices powered by data science. They spoke about how AI-powered medical devices will improve patient care and significantly cut down on the costs.
The panel was moderated by Prathamesh Prabhudesai, physician and Entrepreneur In Residence at F50. Panelists included Joe Urban, CEO of Potrero Medical, Daniel Burnett, the founder of Theranova, Lu Zhang, Founder and Managing Partner at Fusion Fund.
Key statements about trends in the predictive health space were as follows:
“It is important to be proactive rather than reactive. I have seen doctors and nurses struggle with the patient because they find out afterward. I see where the market is going, and it is going towards predictive health. The days of dumb indwelling devices are limited. In the future, the questions the doctors will ask the people in the field selling the devices is what else does your device do, what else does it tell me, and how can I treat this patient. That will be the future, and I see it happening in global medicine. Laparoscopic surgery changed the operating room; it reduced mortality and morbidity associated with open procedures. Similarly for the ICU and critical care setting predictive health has a vital role in minimizing cost, improving quality and reducing workload for overworked and overstressed care teams”, said Joe.
“User behavior is changing, and people are moving towards personalized diagnostics. The applications of AI in healthcare motivate me to allocate more capital in predictive health. We look at companies that have the potential to generate over 1 billion dollars exits.
Medical device acquisitions are in the range of $150-300 million. Traditionally it is good, but for a VC it isn’t good enough. However, now with AI, it increases the opportunity to work with a lot of Tech companies like Google, Microsoft, who will pay higher for the data and who have less control over the exit price of the healthcare company. The main focus of using AI-powered medical devices is to enable the provider to increase efficiency, work better, and increase accuracy. We are not replacing anyone”, said Lu.
“The focus at Theranova has been to start companies like Potrero Medical that capture actionable proprietary data streams. Data is the new oil if you have a rich unique and patentable data stream. We work on improving outcomes, reducing costs, and expanding access to care. The last two are important. Earlier the medical device space used to focus only on the first one. The days where you sell a medical device company for 150 million, but it is going to add a lot to the cost of care are gone. If you hit on all three of these, you have everyone pushing for you, the doctor, patient, the hospital system. The only entity not pushing for you is the traditional medical device company that you are disrupting”, said Daniel.
The trio didn’t consider competition from industry incumbents as a significant barrier to entry in the predictive health space.
“Big companies are largely limited by their intolerance to liability. The stage where we pay can potentially bankrupt a Medtronic or Verb Surgical. We do innovation that is pioneering. Leaders at Boston Scientific or Medtronic would agree with this because that’s not where they want to be”, said Daniel.
“Nowadays we don’t worry about competition between startup and large company. The big company wants to be an enabler; they have a platform and database, they want to collaborate with small startups and make strategic investments in these startups. This creates a much healthier ecosystem”, said Lu.
“Potrero Medical has a technology that has a waiting list in the US to get it. We upset the incumbent by adding clinical utility and value for doctor, the patient, and the hospital. Our tech automates workflow by reducing burden for the nurse at a price that is reasonable which traditional medical devices companies don’t do”, said Joe.
The panelists feel that the regulatory atmosphere right now is very supportive. They suggested that when you are doing something pioneering, it is easier when you involve the FDA early on and work with them. They concluded the panel with a few bold statements.
Joe and Daniel: “Doctors that use AI and Machine Learning will replace the doctors that don’t.”
Lu: “ We are not just going to see smart doctors but also smarter hospitals. All devices going into the patient will be smarter and more sensorized, and data is going to be the new