Has health tech investing changed since Theranos? - Politico
LESSONS LEARNED?: Let’s take a journey back to 2015. The health-tech startup Theranos was on a high. Venture capitalists loved the company. Hospital executives and former government officials, from retired Marine Corps Gen. Jim Mattis to former CDC Director William Foege, rushed to join the company’s board. Founder Elizabeth Holmes was a magazine cover darling.
Things went downhill fast. Still, even after the Wall Street Journal’s investigations exposed the company’s horrendously inaccurate blood-testing technology, and with Holmes' criminal fraud trial looming California, it’s hard to believe so many experts bought into the Silicon Valley company’s hype. And it raises questions: Has the e-health sector learned its lesson? Are financiers and c-suite execs now warier of startups bearing gifts?
Investors certainly haven’t gotten shy. During the fall of Theranos, some investors worried the company’s failure would make it harder for other health care startups to attract funding. Instead, investments in digital health startups in the first half of this year tripled the total for all of 2016.
“I do not think that it has led to changes in how prospective investors do their diligence,” said Bob Kocher, an investor with Venrock. The environment is “so terrific” that investors are competing for opportunities. “Which means they need to act fast and persuade entrepreneurs that they will be good partners — more skeptical and slower diligence is hard in this context.”
But scrutiny is up in some places. University of California, San Francisco department of medicine chair Bob Wachter — who’s written on the promise and perils of health tech — says executives “have more sensitive BS detectors than they used to.” They poke into the evidence for the product. “Big [hospital] systems have had to specialize this function — develop a new arm of the organization to evaluate health-tech pitches.”
The Theranos fallout may have contributed to gender discrimination. Daphne Zohar, the CEO of biotech company PureTech Health, thinks women-led startups are scrutinized more heavily. “There are many successful and accomplished women who have stellar reputations and who consistently execute and deliver results quietly over many years, yet the flashy infamous story of a con artist somehow gets associated with female entrepreneurs,” she said.
Data from investors at Rock Health suggests that may be so: The percentage of funding going to women-led digital health startups has declined in recent years, from 17 percent in 2018 to 12 percent so far this year.
When things go bad for women-led companies, Zohar observes that people say “just like Theranos.”
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Christina Farr @chrissyfarr “What I love most about talking to friends about their experience with wearables is how often the data affirms what our doctors already tell us: Alcohol/caffeine late in the day can affect sleep, exercise is good, sleep is good...
And yet, we still want the data”
QUESTIONS FOR MORGAN HEALTH’S CEO: After an ill-fated health collaboration with Amazon and Berkshire Hathaway, JPMorgan Chase has a new health business unit called Morgan Health that aims to disrupt and transform the health care system. With $250 million to invest, and working with its in-house insurance operation, the unit is focusing on improving outcomes and controlling costs, while also lessening racial and other inequities. It’s already made its first investment of $50 million with primary care startup Vera Whole Health.
We sat down with CEO Dan Mendelson to get a sense of what tech and other ventures they’d hope to invest in. The interview is edited for length and clarity.
Is there any data or technology that you see as an exciting one for improving care?
Absolutely. Data and analytics are central to providing an advanced primary care experience. Our employees want to engage virtually as well as in-person. It’s really the complementarity of those two ways of getting care — to be able to access both — that results in the highest value.
From a technology side, we are going to be deploying technology to do televisits. We’re going to be using analytics to ensure that individuals are getting the care they need. We’re very focused on making sure that people who need preventive care are getting it, that everyone has a wellness visit. And that people who are supposed to be on cholesterol medicine are actually complying with it, or in communication with their physician. All these things are facilitated by digital interaction.
There’s been some work examining unintentional racial bias of algorithms. How do you examine whether some algorithms might perpetuate or worsen racial inequalities?
The same tools that can be used to improve matters can be used poorly. When we’re looking at companies in analytics … we’re going to need to understand exactly how the algorithms work and cannot accept a black box. We’re going to really get in and understand things. I think that if we see disparities — if the data show disparities — we’re in a position to address them. If we don’t know, then we’re not in a position to address them.
U.S. HITS THE BRAKES ON NOVAVAX: The federal government has halted funding for the next-generation vaccine maker that uses moth cells to crank out batches of Covid spike proteins until its manufacturing measures up to FDA standards.
Maryland-based Novavax disclosed in a Securities and Exchange Commission filing that it’s backing under the Defense Production Act had been paused, and that it was instructed to “prioritize alignment” of its analytic methods with regulators before restarting U.S. production. The company, which has a $1.75 billion federal contract for the work but has been beset with production problems, said last week it doesn’t plan to apply for emergency use authorization for its shot until the fourth quarter of 2021.
Novavax’s vaccine proved as potent as mRNA shots from Pfizer and Moderna in trials earlier this year, raising hopes it could shore up global supplies. Some think it could still be a key player when booster shots are needed to bolster immunity.
While it works to pass muster with FDA standards for consistent manufacturing, the company is pressing forward in a partnership with the Serum Institute of India to supply the vaccine to needy countries like India, Indonesia and the Philippines and obtain the WHO’s green light to be part of the COVAX global vaccine program.
TRIPATHI SETS CONNECTIVITY TARGETS: The Biden administration’s national coordinator for health IT told the industry’s biggest gathering Tuesday that improving the way electronic health record systems talk to each other and fortifying data standards are his top priorities. He added that the administration will be “at times pushing the envelope on what’s practical and feasible without losing sight of the vision.”
The remarks from Micky Tripathi came during a panel discussion at the HIMSS global health conference in Las Vegas that took up lessons learned during the pandemic and the Trump-era health data sharing rules that, among other things, aimed to simplify patients’ ability to download their health records on to their smartphones.
Tripathi said that upon taking office, there were “gaps” in enforcement at the HHS office of inspector general that his office is now filling, particularly in terms of policing health providers that are blocking certain kinds of information. Tripathi also said ONC is finalizing procedures for handling complaints.
He doesn’t like the widely used term “information blocking,” though.
“Can we all agree that we should stop referring to it as information blocking, and instead call it what it is, namely an obligation for information sharing,” Tripathy said. “We, ONC, don't believe that every provider, vendor and health information network is presumptively guilty until proven innocent of being an information blocker.”
Daniel Jernigan, CDC's acting deputy director for public health science and surveillance, said in the same HIMSS session that the U.S. needs to stop perpetuating siloed public health data systems and move toward “common platforms.”
“When Covid emerged, there was no categorical program for it, no system designed for it and no dedicated staff for it,” Jernigan said.
Jernigan said the pandemic has shown the importance of connecting public health networks to the broader health care ecosystem, in the same way providers, labs, pharmacies and other players are connected. He said the country also has to remove barriers that keep it from getting a full picture of health inequities and address better pay for data science workers.
E-PRESCRIBING’s STILL NOT TOTALLY SATISFYING: Half of pharmacists and two-thirds of physicians and other prescribers say they’re using more technology during the pandemic. But that doesn’t mean they’re happy with the state of communications, according to a new survey from national digital prescription network Surescripts.
Only about a fifth of the 520 pharmacists surveyed say they always have the information they need to provide proper medication. They and the 200 prescribers who were queried cited difficulties with price data, prior authorization follow-up and communication with insurers as their top gripes. Some 58 percent of pharmacists say it’s very or somewhat difficult to access patients’ out-of-pocket costs; 73 percent of the prescribers agree.
The results underscore the incomplete progress of health care digitization efforts: While e-prescriptions have surged over the past decade and driven down medication errors, a lot of grunt work still needs to be done.
GOING GREEN: Italian Prime Minister Mario Draghi is getting between his population and the espresso bar, by insisting adults and teens need a digital pass with a QR code certifying Covid immunity to sit in coffee bars and restaurants, as well as cinemas, museums, pools and gyms. The “green pass” starting in September will be required to use for using long-distance transit and attend universities, writes POLITICO’s Hannah Roberts.
The requirement took effect last week and seems to be having the desired effect on undecided Italians, with regions posting a jump in vaccination appointments. But mandatory verification is triggering pushback from the political right similar to what’s being seen in the U.S., with critics calling the rules unconstitutional, discriminatory and an assault on individual freedom.
The vaccination push tests whether nudging apathetic people toward vaccines by threatening their lifestyle works better than dangling U.S.-style incentives or cash payments. Italy offers an intriguing test bed, because it’s bothfacing the surging Delta variant and has especially high rates of vaccine skepticism and a deep-seated distrust of government. In Italy, 2.7 million people over 60 are still not fully vaccinated, according to the health think tank GIMBE. Some regions, especially in the south, have just about half of their populations fully inoculated.
Germany will phase out free coronavirus tests in October and plans to increase pandemic restrictions for people who haven’t been vaccinated, to boost lagging inoculation rates.
Chancellor Angela Merkel announced the changes Tuesday, adding that when new infections are running at a rate of more than 35 per 100,000 people over a seven-day period, the nonvaccinated will have to present a negative coronavirus test to visit people in hospitals, or access sports and cultural venues, hotels and indoor restaurants, unless they have recently recovered from Covid-19.
The New York Times goes behind the scenes on the conflict between the White House and Facebook.
STAT explores how artificial intelligence suggested ketamine as a treatment for a rare disease.
And The Atlantic delves into the question: Why are the vaccine cards too big for our wallets?