Bay Area dermatologist David Wong can\u2019t forget a patient he met during a trip to California\u2019s Central Valley in 2009: a farmworker with a bleeding lesion on his right forearm who died within six months of Wong\u2019s diagnosis of metastatic melanoma. The man lived less than two hours from San Francisco, and Wong says he was appalled by the \u201cmarked difference in the access to care as well as the quality of care patients were receiving.\u201d<\/p>\n
That experience led Wong and a fellow dermatologist to launch an online clinic in 2010. Direct Dermatology uses photos patients upload to diagnose growths, rashes, and other skin problems, usually in less than a day and at what Wong says is about half the cost of a regular doctor visit. The Palo Alto business, which has nine employees and a network of 20 dermatologists, has performed more than 10,000 consultations. Its services are covered by Medicaid and some private insurers.<\/p>\n
Wong is one of a \u201chuge, huge number of entrepreneurs working in health-care IT and services who really want\u201d to improve services for poor, uninsured, and Medicaid patients, says Margaret Laws, director of the California HealthCare Foundation\u2019s Innovations for the Underserved program. Few venture capital firms have shown interest in funding these types of startups, so donors are helping to fill the gap with grants, loans, and equity investments. Direct Dermatology got just over $1.2\u00a0million in 2012-13 from the California HealthCare Foundation and the Kresge Foundation in the form of convertible debt.<\/p>\n
Businesses and nonprofits seeking to improve health care for the poor received more than $81 million in debt and equity investments from foundations in 2012, according to a December\u00a02013 report from California HealthCare, which is dedicated to improving access to care. Although there is no historical data on this type of funding, Law believes the numbers are going up, propelled by the Affordable Care Act\u2019s goal of insuring all Americans. The Obama administration is projecting that in 2014 more than 19 million people will join Medicaid, the national health-care program for the poor, now that 25\u00a0states, plus the District of Columbia, are expanding eligibility criteria for the program.<\/p>\n
Before Obamacare, hospitals and clinics resisted incorporating entrepreneurs\u2019 new products into their systems, says Veenu Aulakh, executive director of the Center for Care Innovations, a San Francisco nonprofit that acts as an intermediary between health-care providers and startups. There\u2019s \u201cnow a sense of urgency\u201d about adopting innovations that make them more efficient, she says.<\/p>\n
Sims Preston, chief executive officer of Morrisville (N.C.) startup Polyglot Systems, says the 2010 health-care law has helped his four-year-old company sign up more than 300 pharmacies, 200\u00a0clinics, and a handful of hospitals as customers. Polyglot\u2019s software, available in 18 languages, prints instructions for taking medicine in formats that patients with low literacy levels can understand. The shift to reimbursing for quality of care, rather than quantity of care, \u201cmeans the mission that we\u2019ve been on now has a business case to support it beyond simply the moral case,\u201d says Preston, whose company has received about $2\u00a0million in grants from the National Institutes of Health.<\/p>\n Propeller Health, a four-year-old startup in Madison, Wis., that makes hardware and software to help sufferers of asthma and other respiratory diseases manage their conditions, is also partially backed by California HealthCare. Asthma attacks are a leading cause of emergency room visits and hospitalizations in the U.S., where 25 million people\u2014many of them children in low-income families\u2014are afflicted, according to the American Lung Association. The 22-person business received a second investment of mostly convertible debt from California HealthCare in June, for a total of just over $1 million from the foundation. Propeller Health co-founder and CEO David Van Sickle says the increase in demand for technology like his is linked to the Affordable Care Act\u2019s efficiency push. Insurance companies are willing to pay for Propeller\u2019s product because it reduces trips to emergency rooms, producing \u201csavings of between $700 to $1,000 per patient, per year,\u201d he says.<\/p>\n Purple Binder, a four-person Chicago startup that helps health-care workers find community services for patients, also credits Obamacare with making its online tools more compelling: \u201cAs health-care providers take on more risk, they need to leverage existing resources to keep their patients healthy,\u201d says Joseph Flesh, the company\u2019s co-founder and president. For instance, using Purple Binder, a pediatrician can connect a needy mother with a local church that\u2019s handing out diapers. The startup makes money by selling subscriptions to providers and through paid listings on its site.<\/p>\n New York-based business accelerator StartUp Health is using a $500,000 grant it received in December from the Robert Wood Johnson Foundation to advise entrepreneurs around the world on how to build businesses that improve access for the poor. \u201cIf we\u2019re really going to solve the big challenges in health care, we have to focus on bringing innovation to the underserved communities\u201d that make up a large percentage of medical spending in the U.S., says Unity Stoakes, president and co-founder of StartUp Health. \u201cIt\u2019s not just a market that needs to be served. There is a real business opportunity.\u201d<\/p>\n That\u2019s why Direct Dermatology\u2019s Wong is confident he\u2019ll eventually be able to raise money from venture capital firms and strategic investors such as health insurers for expansion plans that include hiring at least six more employees this year. \u201cThere\u2019s a lot of financial incentive for adoption of solutions like ours,\u201d says Wong, prompting \u201cinterest not only from foundations but from traditional investors.\u201d<\/p>\n<\/div>\n<\/div>\n [\/et_pb_text][et_pb_divider admin_label=”Divider” color=”#98c137″ show_divider=”on” divider_style=”dashed” divider_position=”top” hide_on_mobile=”on”] [\/et_pb_divider][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n![\"\"](\"http:\/\/assets.bwbx.io\/images\/iN5OU8F63.Ao\/v1\/-1x-1.jpg\")
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