For the past 12 years, Columbia Business School has been organizing the annual Healthcare Conference to advance the understanding of hot topics in the healthcare space. This year’s theme was “New York at the Center of Healthcare Transformation.” With 400 participants, it was a sold-out event.
On February 26, I had the opportunity to moderate the afternoon panel “Investor and Entrepreneur Perspectives on Emerging Technologies” with several distinguished participants:
David Schubert, COO of Accelerator Corporation, who manages a portfolio of 16 biotech companies.
Zach Weinberg, who invested the substantial proceeds from selling his start-up Invite Media to Google when he co-founded Flatiron Health. Zach’s new company, which also enjoyed a $300 million investment from Verily, captures and aggregates real world data through an oncology electronic medical records (EMR) platform.
We kicked off the discussion by looking at a recent Accenture perspective. The study, which tracked approximately 3,000 digital healthcare start-ups over the last six years, identified the following trends:
Capital inflow to digital health exceeded all forecasts over the last 5 years and reached $5.3 billion in 2015.
California leads the way in attracting funding, with Massachusetts and New York ranking second and third.
Funding primarily flows to hot spots such as personalized medicine, provider efficiency and wearables.
Further discussion centered on three topics:
1. Personalized medicine in an era of ever-growing healthcare costs
In today’s environment—where the time from idea to implementation is decreasing logarithmically and which is rich with disruptive innovation, including the ability to use genomic information to determine targeted therapies—the blockbuster model has morphed from a model focused on attacking high prevalence diseases to one focused on rapid and targeted technologies. EpiBone’s business model of using stem cells to grow bones outside the body is one of many examples.
There’s a new emphasis on value and clinical outcomes, which some suggest shows the impact the Affordable Care Act is already having on providers and life sciences companies. And technologies that offer quick and inexpensive screening of a genome for health risk factors, to assess a person’s likelihood of developing a particular condition or to predict their ability to respond to a treatment modality, are transformational.
2. Talent to successfully operate a start-up
The life sciences industry needs skilled workers who have a strong understanding not just of science, but also of business strategy and how to operate a start-up. Venture capitalists and incubators can provide people who have the ability to apply scientific observation to a business case, and provide solutions that are sustainable and scalable, but only to a limited extent.
Consumer technology companies such as Google and Amazon are ahead of the curve, having developed a large enough internal talent pool to operate the transactional components of the business. They have also embraced failing fast, learning from mistakes and iterating quickly through rapid prototyping toward successful outcomes.
Learning from these consumer giants, start-ups need to possess a healthy mix of PhDs and MBAs among their founders, or have a team with areas of deep expertise they can leverage. Investors reminded the audience that more often than not they place their bets on the individual.
3. New healthcare data environment to challenge conventional wisdom
In response to a provocative question from an epidemiologist at Columbia about the future value of randomized controlled clinical trials, the panel discussed healthcare data strategy in the new era of real world data.
Central to the discussion was the emergence of new data sources such as social media and EMR—data sources that allow:
Researchers to detect safety or efficacy signals.
Providers to customize their care models for their patients.
Biotech and pharma companies to make commercial and clinical development decisions.
These data sources augment data the industry has been working with all along, including claims data, in-house clinical trial data and patient/provider survey data, which often reside in different pockets within the data landscape in these companies and institutions. Finding the right mix of data sources to use for a key research question, and balancing the cost of accessing them, will depend on the question’s initial hypotheses.
Overall, the session provided the audience and panelists with an excellent opportunity to appreciate the impact emerging healthcare technologies already have on the current environment. But we all felt we are only scratching the surface with the art of the possible.