The Coming Revolution in Health Care

The Coming Revolution in Health Care

To understand how the American health-care system is about to change, forget Washington. Look to the innovative companies hard at work on the future.

The Supreme Court may have upheld the Affordable Care Act, but the future of the American health care system remains very much in question. Republican legislators have symbolically voted to overturn the law more than 30 times, and Mitt Romney has vowed to complete the job if elected. Even if the law survives, containing the soaring cost of care remains the nation’s most pressing fiscal challenge. Something has to change.

Fortunately, the change is already under way. It is led not by politicians but by entrepreneurs far from Washington, eager to tap into the myriad opportunities presented by the $2.6 trillion health care economy. Their mission: to fix a system that has grown impossibly inefficient and bureaucratic. In fact, the most exciting ideas in health care are not the treatments and devices coming from research labs. Instead, they’re business applications that aim to cut costs by wringing out inefficiencies and boosting communication and transparency, turning health care into a real, functioning marketplace.

Investors are intrigued. Halfway through 2012, investments in digital health care start-ups were up 73 percent from midyear 2011, according to a report put out by San Francisco-based health-care accelerator Rock Health. And the Halo Report on angel funding reported that health care companies have been receiving the greatest share of total dollars, beating out sectors such as software and energy. There’s even a new crowdfunded “Kickstarter for health” called MedStartr.

In terms of size, orientation, and ambition, these companies are all over the map. Some are tiny start-ups; others are well-funded would-be giants. All of them are concerned not with new treatments and therapies and devices but with creating smarter systems. As a group, they are animated by the big ideas detailed below, new ways of thinking that are shaking up health care for the 21st century.

BIG IDEA
Medicine Is a Marketplace
With new software, the doctor will see you now, not in three weeks.

Each year, Americans pay a billion visits to doctors’ offices, waiting an average of 20 days to get an appointment. Yet on any given day, even physicians with busy practices and long waitlists lose 12 percent of their available appointment times because of patients who don’t show up or cancel at the last minute; some 40 percent of appointments scheduled more than 20 days ahead get canceled or are no-shows.

Users of New York City-based ZocDoc, an online service for researching and scheduling appointments with doctors, can get an appointment within a day or two. “There’s a health care supply that goes underutilized because of an inefficient market,” says Cyrus Massoumi, a former McKinsey & Company consultant and ZocDoc’s CEO and co-founder. Combating such inefficiency is going to be even more vital when the 30 million-plus Americans expected to get insured under the Affordable Care Act start vying for appointment times. “A few years ago, Massachusetts got half a million new patients and no new doctors,” says Massoumi. “Their wait times are now about 50 days. That’s what can happen nationally if we don’t change.”

ZocDoc is free for consumers, but doctors pay $300 a month to be listed. With or without Obamacare, these kinds of services–which include Zeel, a booking site for alternative-health providers, and GoHealth, a comparison-shopping site for health coverage–seem bound to grow. ZocDoc already draws more than 1.5 million users a month in 20 major markets, including New York City; Washington, D.C.; and San Francisco. Not only is it more convenient than picking up the phone; the site offers pages of doctor ratings provided by confirmed patients. The company has raised $50 million from DST Global, the investment vehicle of Russian billionaire Yuri Milner, an early investor in Facebook and Zynga. That’s in addition to $45 million raised from other investors, making ZocDoc among the best-funded health care start-ups.

BIG IDEA
The Consumer Is King
How to get good data into the hands of patients.

Even for those whose employers foot the bill for health insurance, out-of-pocket medical costs are going up, thanks largely to the increasing use of high-deductible health plans. According to Kaiser Family Foundation, last year 31 percent of workers covered by their employers had deductibles of at least $1,000, up from 10 percent five years ago, and deductibles of $5,000 for a family aren’t uncommon. That puts the responsibility for making prudent health care choices firmly in the hands of consumers. “The old idea was that the patient was basically walled off from decision making,” says Rebecca Woodcock, founder and CEO of CakeHealth, a San Francisco-based online platform for managing health care expenses. “That’s not a sustainable model. Getting customers to care and to be part of their health planning is the real sustainable solution.”

That starts with selecting care–an area staked out by start-ups such as Salt and four-year-old Castlight, which in May raised $100 million in a Series D funding round, a record for a health care IT start-up. Based in San Francisco, Castlight helps employees of midsize and large companies, including Kraft and Honeywell, do comparison shopping for medical procedures. It turns out that shopping around can make a big difference–prices for common health care services can vary more than 700 percent. “There’s almost no correlation between quality and price,” says Peter Isaacson, Castlight’s chief marketing officer. “That lack of transparency is a core issue of what’s been wrong with health care.” By pulling quality and patient-satisfaction data from third-party sources (including the Department of Health and Human Services) and crunching data from hundreds of thousands of employee claims to determine actual costs, Castlight shows not just what you can expect to pay at a given provider but whether it’s worth it.

The co-founders of New York City-based Salt are looking to lower individual health care costs in another way–by pointing users to low-cost medical resources, like clinics. “Our tool helps people at the moment they need care,” says Salt co-founder Kiel Brennan-Marquez. Search the site for sore throat, vaccination, or food poisoning, and Salt will give you options beyond the hospital or doctor’s office. “You can get any kind of vaccination or routine screening at a retail clinic,” says Brennan-Marquez. “If you have a minor illness, like strep or other infections, a nurse practitioner at a community health center can run basic tests and prescribe antibiotics. These kinds of problems are disproportionately represented in everyday health needs.”
On the back end, the challenge of consumer-driven care lies in consolidating and making sense of the trail of paper that follows any interaction with the health care system. CakeHealth’s online platform lets consumers treat their health care finances like a retirement portfolio. Users can see exactly what their insurance covers, without having to comb through a 200-page benefits manual, and keep track of how primary coverage intersects with things such as Medicare, supplemental insurance, and health savings accounts.

Beyond peace of mind, streamlining the paper trail can also deliver real savings, says Tomer Shoval, CEO of Palo Alto, California-based Simplee, an online service that consolidates users’ medical bills and insurance explanations online. Simplee scans for potential errors–like bills for covered services–and opportunities for savings. Shoval says that 65 percent of people who come to Simplee become regular users, and investors are impressed: The company raised $6 million in Series A funding in May.

BIG IDEA
The Digital Health Record Is Here
A cure for chronic paperwork.

It’s easy to make the case for personal electronic health records: a health care system in which everyone has his or her full medical history in a digital format, stored securely in the cloud, where it’s always accessible and readily shareable. Such a system would deliver quicker, safer, and higher-quality care than our current system, in which medical histories sprawl piecemeal in scribbled notes locked away in doctors’ offices, hospitals, labs, and pharmacies. Consolidate the data in a single record, and there will be fewer errors, less redundant paperwork, fewer unnecessary appointments, and better coordination among providers, patients, and the family members who help care for them.

What’s hard, it turns out, is building an electronic health record, or EHR, that people will actually use. Just ask Mohammad Al-Ubaydli. When the doctor/programmer founded the U.K.-based EHR company Patients Know Best four years ago, he had three main competitors: Google, Microsoft, and Britain’s National Health Service. Google and the NHS have since pulled the plug; Microsoft’s HealthVault hobbles on, although many analysts question how much more effort the software giant will put into the project.

But Al-Ubaydli believes he can succeed. “The big challenge is in lining up everyone,” says Al-Ubaydli. “Google and Microsoft thought only patients mattered, so they built a product that was only usable by patients. A patient gets really excited about Google Health, spends three hours entering their data manually, then tries to show their doctor, and the doctor refuses to use it with them. That patient will never again use Google Health.” Patients Know Best, by contrast, has been designed to be useful for patients and clinicians, he says. Another key challenge: trust. “Google and Microsoft spent a long time trying to convince people that they would not misuse, resell, or advertise around the data,” says Al-Ubaydli. “Not many people believed them.” Patients Know Best encrypts all data so that only the patient and whomever the patient chooses can decrypt it.

To get started with Patients Know Best, patients ask an institution, like a hospital network, to transfer their data into a personal account. From then on, the patient controls the record and can invite other providers to collaborate, adding reports, lab results, information on medications, and the like. It’s free for patients. Hospitals and doctors in private practice pay subscription fees. “The hospitals pay, because by working with patients in this way, they either save money through efficiencies or make money by attracting more patients with better customer service,” says Al-Ubaydli.

Patients Know Best is just getting started: About 20 hospitals in the U.S. and the U.K. use the platform. But Al-Ubaydli says the company is profitable ahead of schedule, and he expects that incentives for doctors to adopt electronic health records will help spur usage. “Every government is heading toward the same big trends of universal health care and payment by result, not activity,” he says. “All the incentives are there to improve outcomes by sharing data.”

BIG IDEA
Health Care Is Social
Is the crowd smarter than your doctor? Just possibly.

“Five of six doctors will say that diet doesn’t play any role in Crohn’s disease,” says Sean Ahrens, the 26-year-old co-founder of Berkeley, California-based Healthy Labs, which runs Crohnology, an information-sharing platform for people with the inflammatory bowel condition. “But talk to 300 patients, and 99 percent will say that diet plays a major role. That’s one example of the disparity between what doctors and patients know.”

Who’s right? By combining social networking with a powerful analytics platform, Ahrens aims to find out. Web forums focused on chronic medical conditions, of course, are nothing new. But Ahrens, a Web developer who previously co-founded a Y Combinator social-messaging start-up called Message Party, is committed to building a platform that’s more than a collection of unvetted “what worked for me” anecdotes. “You don’t just listen to what people think is working,” says Ahrens. “You have to make the wisdom of the crowd smarter.”

Crohnology does that with software that allows users not just to track their diet and treatments but to correlate these things with their actual symptoms over time. As more users input their data, Ahrens believes, Crohnology will become the go-to destination for information on treatments that remain ahead of the curve for mainstream medicine. “I think of anecdotes as raw data that the medical system has run away from,” says Ahrens, who was found to have Crohn’s at 12. “There’s a lot of power in there that we haven’t invested in.”

Another peer-to-peer health start-up, Patients­Like­Me, which launched its first online community in 2006, has raised $15 million in venture funds and generates revenue by selling patient-reported data to pharmaceutical companies and medical-device makers. But Ahrens, who launched Crohnology in mid-2011, is taking a cautious approach to monetization. “To maintain the independence of user-generated content, there are a lot of reasons to avoid ads,” he says. The company is designing a clinical study in partnership with the Mayo Clinic; the University of California, San Francisco; and the Kauffman Foundation to determine if patients using the Crohnology platform experience improved outcomes and reduced costs. If they do, says Ahrens, “it will give us some evidence to stand on, and hopefully open up health care providers to, in a sense, prescribe our software as a treatment and for insurers to cover it.”

Ahrens also anticipates versions of the Crohnology platform for other chronic conditions. Autoimmune conditions, like multiple sclerosis, affect 50 million Americans, and mental conditions such as posttraumatic stress disorder, depression, and panic attacks afflict another 50 million. “Almost all chronic conditions are hidden,” says Ahrens. “They create a pent-up need to connect. In a world where disconnection from other patients is the norm, I think there’s a compelling case for technology like this.”

BIG IDEA
The House Call Makes a Comeback
A computer screen becomes an exam room.

You talk to your loved ones via Skype and other online networks. Why not doctors? In fact, plenty of ailments can be diagnosed online. “Consumers are looking for different ways to interact with physicians–modes that are more convenient and that don’t require going through the traditional calling and scheduling,” says David Wong, a dermatologist and a co-founder of Direct Dermatology in Palo Alto. Dermatology, he adds, is a perfect match for telemedicine. An image captured by the camera on a mobile phone or any point-and-shoot camera, he says, can allow accurate diagnosis of a rash, acne, or a suspicious growth.

With no appointment, Direct Dermatology customers can simply upload photos of a skin condition or rash and receive a timely response from one of the dermatologists in the network–as well as any necessary prescriptions or referrals to local specialists–all for an $85 fee (insurance reimbursement is limited at this point). Launched as a service for primary-care doctors, Direct Dermatology debuted a direct-to-consumer service in mid-2012.

Whatever happens with health care reform in Washington, Wong says, “the trends point to a larger place for telehealth in preventive care, early detection, and to deliver care more efficiently at lower cost.” Telemedicine can also provide access to people who might not otherwise get care at all, like the farm workers Wong and his co-founder, Rajnish Gupta, used to drive an hour and a half from their Bay Area offices to see. “We’d diagnose patients with melanoma at a late stage because they couldn’t get in to see a dermatologist,” Wong says. “We can be so insulated from what kind of health care is really available for most of us–with telehealth, geography shouldn’t be an issue.”

Ron Gutman, CEO and founder of Palo Alto-based HealthTap, an online health-information platform, is tackling access and cost problems another way: by putting an army of doctors at consumers’ beck and call, online, all the time, free. Since launching a beta version last May, HealthTap has enlisted nearly 15,000 physicians across the country to answer questions submitted on the site. “I’m surprised how quickly we get answers from some of the best doctors in the country, people you’d wait four months to schedule an appointment with,” Gutman says.

What motivates them? Apart from altruism, says Gutman, doctors use the site to “create and build a reputation among patients and peers in a safe environment where you’re not exposed to liability.” (Gutman worked with insurer Lloyd’s to design special coverage for participating docs.) HealthTap checks that participating doctors are licensed and in good standing, and, uniquely, offers a peer-review feature that lets physicians on the site rate one another’s responses. Algorithms direct users’ questions to appropriate specialists, who can post responses at their convenience.

A new premium service lets users send a question to a particular doctor, and have a private online conversation, for about $9.99 per transaction. That’s a lot cheaper than an office visit–and in many cases, it’s all you’re going to need. “Americans spend more than half a trillion dollars on visits to the doctor, and about 25 percent of those are just Q&As,” says Gutman. “Why can’t you do it from the iPhone or iPad instead and save yourself half a day and all the hassle?” In December 2011, HealthTap nabbed $11.5 million in Series A funding from a consortium of investors led by the Mayfield Fund.

BIG IDEA
The Algorithm Is In
Why smart software means better diagnoses.

When aches and pains keep you up at night, Google is not your friend. According to a 2008 study, about 50 percent of people who diagnose their ailments online believe that the higher the search-engine ranking, the more likely it is that they have the disease. Guess what? “That’s completely false,” says Craig Monsen, a computer engineer and Johns Hopkins medical student who co-founded Baltimore-based Symcat, a new kind of online symptom checker. “When you type a symptom into Google, the problem is you’re not getting content sorted by likelihood. For back pain, your top results might be malaria or tuberculosis; for muscle twitching, you’ll get Lou Gehrig’s disease. The fact is, these are actually quite uncommon. That causes undue concern or is at best unhelpful.”

Apart from the bad-diagnosis problem, says Monsen, online sources like WebMD are more like encyclopedias than diagnostic tools; they’re really just textbooks put on the Web. “That works well for search-engine optimization,” says Monsen. “But it doesn’t provide an answer to what you have or tell you what you can do about it.” Symcat’s focus is to answer these questions as quickly as possible, using a data-driven approach similar to that used by companies such as Netflix or Pandora to suggest movies or music.

The software’s simple interface lets users type symptoms into a search box, prompts them with follow-up questions, and then compares the responses against patient data from the Centers for Disease Control and other public sources. Using the same kind of triage algorithm as physicians, Symcat presents a list of possible causes and their percentage of likelihood, and recommends next steps that could include self-care, calling a nurse practitioner, or visiting an urgent-care center.

Why not just call the doctor? “That’s great if you have access,” says Monsen. “But that’s the problem–so many people turn to the Internet because the health care system is not optimized for access. Your average wait time to get an appointment is about three weeks, and your appointment is 12 minutes long. The ER is convenient, but that creates another problem.

“There’s a growing recognition that we need to do a better job getting people to the right level of care, or else they will take advantage of the most expensive option, which is the ER,” Monsen says. “It’s not Symcat’s intention to be a substitute for a doctor, but to empower people with actionable information and be a guide to the universe of health care options–a first step to figuring out where you belong in the system.”

BIG IDEA
Your Doctor Is Watching You
How a simple text message can make you healthier.

In health care-speak, compliance means doing what your doctor tells you to do. In other words, after you leave the office or hospital, do you actually get the lab tests and take the medication as directed? It’s a crucial question: Studies have shown that noncompliance causes 125,000 deaths a year in the United States and leads to as many as 25 percent of hospital and nursing-home admissions.

New York City-based Medivo, which raised $7 million in Series A funding in 2011, is trying to help. Launched in 2010, the company aims to close the loop between doctors and patients. CEO and co-founder Sundeep Bhan envisions it as a sort of customer-relationship-management system for doctors, helping them refer patients to labs, collect the results, and send follow-up reminders. The service is free to doctors and patients; Medivo aims to make money via advertising on its platform. “Health care in general is very reactive,” says Bhan, who sold his previous company, Medsite, to WebMD in 2006. “You see a doctor when something is wrong, but there’s no follow-up care between visits. And doctors have no real platform, resources, or incentives to proactively manage their patients. There’s no mechanism to remind a diabetic patient to get his hemoglobin tested every three months.”

The same goes for medications. It is estimated that 70 percent of all prescriptions are never consumed, and 20 percent of all new drug prescriptions are never filled. The problem is especially acute among patients with chronic illnesses with complex drug regimens. The result often is high-cost complications.

New York City-based CareSpeak Communications, meanwhile, uses simple mobile technology to encourage better compliance: a two-way text-messaging platform that sends reminders to patients and people who assist in their care. CEO Serge Loncar founded the company in 2006 and based it on three core beliefs: that the mobile phone would play an increasingly important role in health care; that a patient’s entire “circle of care” should be involved in managing one’s health; and that text messages would be the most nondiscriminatory way of staying in touch. Customers, including pharmaceutical companies and health insurers, pay a monthly per-user fee.

CareSpeak has already demonstrated better outcomes through the platform: A 2009 study published in the journal Pediatrics found that for a group of high-risk pediatric patients getting liver transplants, using the CareSpeak system resulted in a significantly lower rejection rate. Half a dozen studies currently under way are looking at the system’s impact on wellness and chronic and acute diseases. CareSpeak last year signed an agreement with United Health Group, which hopes the platform can help lower the cost of care for the 26 million patients in its coverage network.

Loncar is excited by the wave of innovation in health care, though he acknowledges that any real changes will be driven less by entrepreneurs than by demand from consumers. “The systems that win will be those that get consumers to engage the most,” he says. “If we can come up with apps that the consumer will embrace, then the system will have to change.”

Diagnosing Skin Cancer via iPhone: The Apps to Know

Diagnosing Skin Cancer via iPhone: The Apps to Know

Are you keeping an eye on your moles? Really, though? In light of the shortage of dermatologists, a market has developed to augment DIY monitoring of skin anomalies of all sorts. Instagram filters not recommended.

michellerhee.banner.reuters.jpg
skinofmine.com

Forty-two percent of Americans live in areas that are “underserved by dermatologists,” according to a set of recent and oft-cited journal studies. Long lines for Botox? Hardly. With all the cosmetics hoopla, it can be easy to forget that dermatology is most often serious business. Skin cancer, for instance, is the most common form of cancer in the U.S. When caught early, it’s also entirely treatable.

Here’s where things get interesting: Yes, people get a lot of moles, and moles tend to make people very nervous (with reason!). Yet in truth, while it’s important to closely monitor your moles, most really are benign.

It takes just minutes for a good doctor to do a check, but compare that to the one to four months the average American currently has to wait to get an appointment. Moles aren’t the only dermatologic condition that’s simple to diagnose,
either. Acne has a high cure rate, given just a handful of data points. Rosacea, eczema… the list goes on.

What this translates to is a massive market of conditions so easy to diagnose that they possess relatively low liability, a fact that’s putting dermatology at the forefront of some extremely impressive mobile and telemedicine technology.”Mobile dermatology solutions can help solve the problem of access, and that’s fueling a lot of funding,” says Unity Stoakes, co-founder of the Manhattan-based StartUp Health, an acceleration academy for health and wellness entrepreneurs. “Anyone with a smartphone has access to affordable apps, built-in diagnostic devices, and thereby the ability to connect with specialists who can help them monitor and check their skin.”We test drove five apps and sites heading up the trend:

skinscan.jpg

Skin Scan: The Contagion of mole-checkers, Skin Scan’s website sports a ticker board of how many low, medium, and high-risk moles it’s diagnosed to date, along with an unsettling map showing exactly where in the world each case occurred. The app itself is–thankfully–less dramatic. Take a picture of your mole, upload it, and Skin Scan will, within minutes, use a proprietary algorithm to analyze the fractal patterns of your skin. This, in turn, can determine if a mole is growing according to pattern or abnormally, a sign of melanoma. If a mole appears suspect, the Skin Scan can steer you to nearby dermatologists. Importantly, you can archive your results, meaning you can also track growth over weeks and months. Worth keeping in mind: The service is a bit picky with pics, so take a few shots of each spot. Cost: $4.99 for the initial download, and free thereafter.

Spotcheck.jpg

SpotCheck: For a somewhat more entertaining romp with melanoma (if you find mole jokes funny. And they can be. Sort of…), SpotCheck employs the services of a team of dermatologists who’ve signed on to peer at photos of your moles in their spare time. Impressively, the app lets you know within 24 hours whether whoever looked at your case thinks you might want to consider seeing a live MD. Like Skin Scan, Spot Check provides a list of docs tailored to your location, should you need a follow-up. Props for some good photo-taking tips, as well. Cost: $4.99 to download, and free after that.

Skin of Mine.jpg

Skin of Mine: If there were a beauty contest for derm apps, Skin of Mine would win it. The app offers up a sleek Vitruvian Man-style avatar to which you can add tags linking to photos you upload of a host of anatomical concerns–from moles and pimples to redness, wrinkles, lip plumpness, and even tooth whiteness (fun, or demoralizing, you might ask). Like SpotCheck, Skin of Mine relies on telemedicine; living, breathing health care practitioners analyzing your data. Once you upload your photo, you’re directed to a screen where you can select an expert for your virtual visit, answer some questions, and get a diagnosis in under 24 hours. A word of warning: The site is still in beta, and when we tested, the expert pickings were beyond sparse. Moreover, not all were MDs; important to know, as it means you can’t necessarily get a prescription should your diagnosis call for one. Cost: App is free. Each consult, around $50.

Direct Dermatology:
Live in California? Lucky. Direct Dermatology is hands-down the most developed and comprehensive service in this group. But as yet it’s only been rolled out in the Golden State, where it received a grant from the California Healthcare Foundation Innovation Fund. More regions are coming, though, and you can get on the notification list here. Process is beyond easy: No app yet, but sign up on the website, fill out a medical history form, upload a photograph of your particular concern and get a virtual consult report from a board-certified dermatologist–many, with prestigious and exciting degrees–within two days. If you need a prescription, you can pick it up at your local pharmacy.

Cost: No app, consult is $85. Notably, like Skin of Mine, the appointments offered by Direct Dermatology aren’t covered by insurance, but the site does point out that visits are reimbursable from HSA accounts.

Bonus, an app for acne:

novimedicineappedit.jpg

Novimedicine:
After years of dealing with patient-physician access problems while working at the Mayo Clinic, dermatologist Joshua Spanogle teamed up with his brother Seth, a developer, to take on a single problem: acne. Set to launch this fall, Novimedicine relies solely on a set of detailed questions and three uploaded photo, all of which is sent to a dermatologist for evaluation. Each patient receives a detailed explanation of the hows and whys of his or her new prescription and plan, as well as an archived log of progress to refer to and build on for future visits. In this way, Spanogle believes he can effectively treat up to 85% of all acne cases — with no foot set in the office. And here’s some unusual trivia: In his spare time, Josh writes bestselling “medico-science” thrillers. Make of this what you will, but the feedback report for this site was definitely the most engaging and fun-to-read (acne! Be gone! Not quite that fun, but you get the idea). Cost: App is free to download; $59 per consult ($20 discount if you sign up now).

Doctors on demand: 5 startups wiping out the waiting room

Doctors on demand: 5 startups wiping out the waiting room

The last time I went to the doctor, I sat in the waiting room, tapping away at my iPhone (s aapl) and sighing under my breath, for almost an hour. Maybe that’s extreme (for non-emergency room visits at least) but even the national average, according to a recent analysis, is 21 minutes. And that doesn’t include time spent booking the appointment, waiting for a slot to open up or transporting yourself to the office. Emergency room wait times can be much worse – from more than an hour to four hours, depending on who you ask.But an emerging group of startups is trying to make healthcare more convenient by connecting patients and doctors for phone calls, Web video chats or written replies. The virtual doctor concept isn’t new. Companies like Teledoc and American Well have been giving patients 24/7 access to doctors via phone and video chats since the early- and mid-2000s. But while those companies offer services through employers or healthcare organizations, newer startups are going straight to the consumer or appealing to them with lighter-weight, simpler options.

Virtual physicians certainly can’t replace an in-person counterpart in many circumstances (they can’t take your blood pressure, run lab tests or other simpler tests, for example).  And they may not have a patients’ medical history or the personal context that comes with a doctor-patient relationship developed over time.

But these companies say that for basic questions and ailments – say allergies, skin conditions or sexual health questions – virtual doctors can be enough. Advocates of the concept say tele-health programs save consumers time and potentially money, while easing the burden on a healthcare system that increasingly doesn’t have enough doctors to meet the needs of patients. Skeptics worry that it will compromise the level of care and diminish the value of the doctor-patient relationship. But the trend seems to be picking up. According to a recent Kaiser Health News/USA Today article, tele-health is gaining traction among insurance companies, including Aetna and Cigna.

Many of the startups are local for now, as some state medical boards block the practice of tele-medicine, especially across state lines. But many say they plan to expand nationwide soon. Here are five startups tackling tele-health in different ways:

1. Ringadoc
Just as Netflix, iTunes and Spotify provide instant gratification in entertainment, Ringadoc founder and CEO Jordan Michaels thinks we ought to receive on-demand services in healthcare too. Launched in 2010, the San Francisco-based service charges patients a $40 flat free (slightly more than the average co-pay, Michaels said) to speak with a doctor (who can provide advice, diagnoses and prescriptions) over the phone anytime day or night. This month, it announced that the Founders Fund had invested $750,000 in seed money. The service currently has about 2,000 registered users, who make a couple of hundred calls a month, Michaels said, but he added the company has done very little marketing. Right now, Ringadoc’s network of about 100 licensed doctors is only available to patients in California, but the company plans to expand into more locations over the next six months. Michaels also said that in the coming weeks and months the company will roll out a video chat service, as well as a direct-to-doctor product to give physicians a virtual way to keep in touch with existing patients.

2. Direct Dermatology
The Palo Alto, Calif.-based startup doesn’t provide instant care, but founder David Wong said it cuts down the time patients wait to get a dermatologist consultation from more than one month to two days. For $85 per consultation, users sign on to the site and provide information about their specific question (including their medical history, written description of their skin condition and photographs). Direct Dermatology ensures a response from a board certified dermatologist within two business days, including a prescription if necessary. The service, which has raised $335,000, launched in July 2010, but Wong said it only accepted referrals from primary care physicians until this month. Earlier this year, Direct Dermatology was chosen to be a part of New York health tech incubator Startup Health’s first class of startups.

3. HealthTap
Launched in 2011, HealthTap connects patients with more than 10,000 licensed physicians nationwide, who provide immediate written answers to medical questions for free via desktop and mobile applications. The Palo Alto-based startup aims to give patients a quick way to access reliable health information and physicians a new avenue for reaching new customers and establishing their reputations. Participating doctors must be approved by the service, and once admitted, they can provide answers, as well as weigh-in on the responses of other doctors. To date, the company has raised nearly $14 million and attracted doctors from top institutions such as Mount Sinai hospital in New York and the Cleveland Clinic.

4.  BreakThrough
BreakThrough, a tele-psychiatry service, launched in 2009 at the TechCrunch50 as a direct to consumer service. In the past few years, it’s shifted to provide services through health-care partners but said it plans to support self-pay by September. The Redwood City, Calif.-based startup lets patients search for certified mental-health professionals and schedule appoints conducted via chat, email, phone or a custom HIPAA-compliant video system. At the moment, it only serves California patients, but said it’s on track to be a covered service for three million members by the end of the year.

5. Sherpaa
A newcomer to the field, Sherpaa launched earlier this year to connect people with doctors in New York City. Employers pay the company a flat fee per employee per month and patients receive 24/7 phone and email access to the company’s physicians and specialists (which it calls “guides”) for free. For the past four months, Sherpaa has been working with tumblr with impressive engagement – so far, the company says, 80 percent of tumblr’s employees have used the service. Jay Parkinson, the company’s founder, said it’s still figuring out its expansion plans. Given the local nature of healthcare, he seems to want to take a deliberate approach, but he said once it figures out operations in New York it would make sense to open in other cities.

An Internet Alternative to the Doctor’s Office

An Internet Alternative to the Doctor’s Office

An illustration showing a doctor reaching out of a computer screen to work on someone's arm.

For as long as people have been talking about the World Wide Web, they’ve been talking about telemedicine, or using internet technologies to connect doctors with patients who are in remote areas or confined to their homes. But despite all the talk, little has actually happened in telemedicine. That is one reason we were interested in talking with David J. Wong, a Stanford dermatologist and cofounder and CEO of Direct Dermatology, a telemedicine practice now open for business in California. Dr. Wong was a panelist at the recent Stanford GSB Healthcare Innovation Summit, sponsored by the school’s Program in Healthcare Innovation. Here are excerpts from the interview:

Direct Dermatology is a for-profit company, but its main venture backer is the California Healthcare Foundation, which practices social entrepreneurship by funding businesses that are targeting medically underserved populations. Yet most people don’t think of dermatology as one of the medical issues affecting underserved populations.

Actually, there is a shortage of medical dermatologists. We train a relatively small number of dermatologists each year, and many dermatologists are tending to go into cosmetic dermatology — what people think of as Botox and laser procedures — because of the financial incentives. In addition to this shortage of medical dermatologists, there is also a geographic maldistribution; most of those practicing are in urban areas.

This social mission is what drove the founding of Direct Dermatology; many of our first patients were from poorer rural areas in California’s Central Valley. But we are also looking to build a scalable business. Our belief is that by doing social entrepreneurship, we will simultaneously create something that will have a return on investment.

What are some of the major dermatological health challenges you deal with?

One of the biggest is melanoma, a cancer that has very few treatments. The best thing we can do is screen early, and that requires medical expertise. Another example is severe psoriasis, a chronic condition that can be very disabling and disfiguring. Direct Dermatology also sees patients with any problem of the skin, hair, and nails.

Who can go online and make a Direct Dermatology appointment?

Currently, we are only in California, because of state licensing requirements. All of our doctors are in California. But we will soon be offering our service in other states.

So how exactly does a Direct Dermatology visit work?

The interaction is asynchronous. It’s not a live interactive visit over Web cams. A patient takes a picture of their skin problem, then sends in that picture along with their medical history. And then a dermatologist will review it, and send back a report and any prescriptions that are needed. We have a two-day turnaround. Dermatology is such a visually based specialty that dermatology consultation works well through images.

What’s the cost?

It’s $85. In a big urban area, if you were paying out of pocket, it might be $200-plus.

Has your asynchronous, picture-based approach been tried before?

It’s been done in academic environments. And the military has done it with soldiers in the field.

Clearly, you’re confident that you can provide good care based on, for example, cell phone pictures.

Obviously, there is a certain basic level of picture quality that we need, including a minimum size and resolution. We also tell patients what kinds of images we need. In most cases, we want a distance photo, as well as a close-up photo of the skin problem. Ultimately, we as physicians have to be sure that the pictures we get are of adequate quality for us to give an accurate diagnosis. Nearly all of the submissions are of sufficient quality, mostly because of the education we do with our patients in advance.

Even though it is telemedicine, you are entering into a doctor-patient relationship that has all of the legal and liability issues involved with a traditional doctor’s office. How much of a challenge was that in setting up the business?

There are definitely liability issues you have to deal with, even when you are interacting with a patient remotely. The people who founded Direct Dermatology are all dermatologists. And because of our experience, we know what we can and can’t do. We know our limitations. We have to maintain a high level of care. Our reputations, our licenses, all depend on that.

How is the business doing?

We are excited about the way Direct Dermatology is growing. We continue to reach more of the unmet need for dermatology care, especially in rural and underserved areas.

How many daily visits are you getting?

The number of visits continues to grow rapidly. I’d rather not get into specific numbers.

How is customer satisfaction?

We have had extremely positive responses from both patients and primary care providers. Our customers value the better and more convenient access to high-quality care.

How relevant is your work to other medical specialties?

While some specialties will always require some live interaction, nearly every specialty can provide better access, higher quality care and lower cost by integrating telemedicine in some fashion. Dermatology is a great one to start with as a proof of concept, because it is so visually based. But we believe similar concepts can be spread to other specialties.

In ophthalmology, for example, much of the exam is based on images of the retina. Cardiologists are looking at EKGs and echocardiograms. A lot of those types of images you’d have to first acquire at a lab or clinic, and then send them in. That being said, there is a growing number of home consumer appliances that will take your EKG, for example. And consumers will be soon able to send those in directly to their physicians.

en_USEnglish