January 7, 2015; Las Vegas, NV; Day #1; Highlights - Draft

Executive Highlights

Today kicked off the Digital Health Summit at CES 2015, with such record attendance that the room was expanded at the last minute (we estimated about 400 people today, much larger than last year’s 200 or so). As expected, the focus was largely on wearable sensors and their future, though we gleaned insight on the trends shaping digital health now and in the future. Some of our best learnings came from visits to the exhibit hall, particularly Dexcom and NeuroMetrix. See below for our top 10 highlights.

1. Signage in Dexcom’s booth showed the Gen 5 mobile app running on an iPhone, as well as CGM data displayed front and center on an Apple Watch! FDA submission is still slated for 1Q15. Dexcom also exhibited two new partners that will integrate its CGM data in the future: Databetes (meal app) and Training Peaks (exercise app).

2. We continue to notice an outrageously high level of excitement about the future of digital health, though little excitement exists in the here and now. Many speakers characterize the field as still at a “very early stage”.

3. VC expert Mr. Wainwright Fishburn (Partner, Cooley, LLP) said that companies focused on efficiency in care delivery and transparency in payment have seen the most impressive funding to date. He broke down the digital health field into three main areas: monitor (collecting data), organize data (where we are today), and act (where we need to go).

4. A running discussion of barriers in digital health came to no clear conclusion about what’s holding the field back THE most. A major cited obstacle was clinical practice and integrating digital health data into EMRs and doctors’ workflow (beyond integration, we’d also point out that so many doctors simply don’t like using EMRs period and there’s not standardization). However, problems like data security, privacy, reimbursement, and regulatory also continue to be raised.

5. Missy Krasner (Managing Director, Healthcare & Lifesciences, Box) astutely noted the three dominant platform efforts in digital health today – Google, Samsung, and Apple. She believes all are in the early stages, particularly regarding EMR integration. 

6. GreatCall CEO David Inns provided what we felt were six really valuable tips for succeeding in digital health with older consumers. He focused on simplicity, solving problems, and moving beyond apps.

7. Consultant Mr. David Schie (CEO, Linear Dimensions) shared his predictions for the future of wearables, including artificial intelligence doctors, morphing materials, and surveillance.

8. In the exhibit hall, NeuroMetrix showed off its new Quell device, a sleek, over-the-counter, FDA-approved, more consumer-friendly version of the Sensus pain treatment device. Shipments will begin in 2Q15 and NeuroMetrix is targeting a price of $249 for Quell and $30 for a one-month supply of the electrode pad.

9. DoctorOnDemand had one of the most impressive demonstrations we saw today. The company aims to make video telemedicine mainstream – it already is at places like Kaiser, of course.

10. We explored the health, wellness, and fitness sections of the exhibit hall, with particularly notable updates from Misfit, Fitbit, Vigilant, and TellSpec.

Top 10 Highlights

1. In the exhibit hall, Dexcom displayed a sign showing the Gen 5 mobile app running on an iPhone, as well as CGM data displayed front and center on an Apple Watch! The Gen 5 app interface looks the exact same as the Share interface, in line with the plan for Share to serve as an interim regulatory step to Gen 5. However, the mockup of CGM data on the Apple watch was the first we’d ever seen – see a picture we posted on Twitter earlier today (follow us at @diaTribenews) here – and quite impressive considering the Apple Watch is not even out yet (launching in March – you can call our office anytime to get an update on this as our CEO follows this news religiously). The ability to view CGM data on a watch is a very friendly form factor for patients, and should be very well received given the popularity of the Nightscout watch display. The timeline for FDA submission of Gen 5 is still slated for this calendar quarter (1Q15), in line with previous estimates. Gen 5 will post data to Apple’s HealthKit, hopefully enabling a whole ecosystem of apps using the data. As we understand it, the Gen 5 Bluetooth-enabled transmitter will be the same size as the original G4 Platinum transmitter.

• Dexcom exhibited two new partners that will integrate its CGM data in the future: Databetes and Training Peaks. Databetes makes a meal-tracking app, Meal Memory, available on both Apple and Android devices – notably, Apple launched today! This app was developed by type 1 patient Doug Kantor and centers on taking a picture of a meal and manually tracking pre/post-meal glucose values. The seamless integration of Dexcom data will make it much easier and more useful for patients. Training Peaks is an exercise training and tracking platform, historically used by elite athletes/coaches. The company was co-founded by type 1 father Gear Fisher. The addition of Dexcom data would add more context to data collected during workouts, such as heart rate, speed, power, etc. We’re very excited to see progress on both and it’s terrific to see Dexcom moving into the “here and now” – we’ll be interested to watch patient opinions form on both.
• A sign displayed Dexcom’s ever-growing list of CGM integration partners, now totaling nine organizations: Animas (Vibe launching this month), Tandem (t:slim G4 at FDA), Insulet (to integrate with Gen 5), Asante (to integrate with Gen 5), SweetSpot (timeline unclear), Tidepool (timeline unclear), Diasend (downloads Vibe and G4 Platinum), Databetes (to integrate Gen 5), and Training Peaks (to integrate Gen 5). This says a great deal for Dexcom’s business development folks, and we’ll be eager to see how the pace of these moves.

2. At today’s Digital Health Summit, we noticed an incredibly high level of excitement about the “future of digital health.” Perhaps the most common sentence openers were, “Imagine in ___ years what we’ll be saying!” (depending on the speaker, the time horizon was three, five, or even ten years). Other comments spoke very positively about all the technology “that is coming” – less optimism was expressed on what the field is presently offering to consumers and the healthcare system – we were glad to hear more realism on this front. Speakers compared the digital health revolution to the personal computer or cell phone revolutions, noting that both took a while to gain traction. The sentiment was perhaps best expressed by Samsung Electronics’ President Young Sohn, who said “we are at a very early stage” at least four times during his conversation with UCSF’s Vice Chancellor for Informatics Dr. Michael Blum. That said, there was clear recognition that the current generation of wearable devices, trackers, sensors, and apps is laying important groundwork for future generation products that will improve on many parameters – accuracy, size, form factor, sensor technology, seamless integration into life, data utility, and clinical/payer value. Mr. Robert Scoble (Startup Liason, Rackspace Hosting) appropriately summarized digital health as an iterative process: “We’re in the Apple 1.0 days. The smartwatches we have now will look rudimentary 10 years from now.”

3. Mr. Wainwright Fishburn (Partner, Cooley, LLP) addressed some funding success stories in digital health and offered a framework to describe the field’s trajectory. He said that companies focused on efficiency in care delivery and payment transparency have seen the most impressive funding to date – see below for a list. Mr. Fishburn cited recent Rock Health data that digital health funding broke $4 billion in 2014, reflecting a whopping 125% growth trajectory from 2013. Despite the massive influx, he does not believe there is a bubble (“digital health is here to stay”), especially given the strength of funders like Google Ventures, Qualcomm, and other heavy hitters like Andreessen Horowitz and Khosla Ventures. Mr. Fishburn broke down the field into three main areas: monitor (collecting data), organize data (where we are today), and act (where we need to go). We agree with his assessment and feel that diabetes is still working on the monitor column (e.g., only a few devices are cloud-connected at this point), and the middle column has much room to grow, though platforms like Tidepool, Diasend, SweetSpot, and Glooko are making progress. The Act column is of course the toughest of all, and one we have not seen huge progress on in diabetes through potential gamechangers like Clinical Decision Support. Dr. Daniel Kraft (Singularity University) postulated that it “may be malpractice in a few years if a physician doesn’t use artificial intelligence to make a diagnosis” – while he was perhaps exaggerating, it does give pause to think about how much care would improve with the help of algorithms.

4. Throughout the day, a running discussion of barriers came to no clear conclusion about what’s holding the field back. A major cited obstacle was clinical practice and integrating digital health data into EMRs and doctors’ workflow. Said Dr. Daniel Kraft (Singularity University), “All this digital health is a bit of a so-what for the doctor.” While that may be true, when patients are voting with their feet, perhaps we’ll see more interest from HCPs (that said, there’s already a big continuum even if average interest is not that high).  Deepak Prakash (Vancive Medical Technologies) added, “You’re seeing the promise. [But] Until you see providers and payers pull more strongly, you’ll slow adoption over the next several years. Think of cell phones 20 years ago. Now everyone has phones in their pocket. You’ll see something similar happen, but healthcare is far more complex.” Others contrasted the slow speed of healthcare and FDA approvals with the quick pace of innovation – the challenge is to find the happy medium. Of course, other barriers like data security, privacy, and reimbursement continue to be mentioned. On the consumer side, many expressed hope for a day when sensors would be embedded into everyday objects and integrated into life, eliminating the need to carry a separate device or do extra things. As an example, Mr. Stanley Yang (CEO, NeuroSky) unconventionally suggested sensors embedded in toilet seats to monitor vital signs or serve as a weight scale. There is certainly some merit to the idea, given how toilet seats are part of everyone’s daily life and pretty hard to lose!  

5. Missy Krasner (Managing Director, Healthcare & Lifesciences, Box) astutely noted the three dominant “platform plays” in digital health today – Google, Samsung, and Apple. She highlighted the potential of these platforms, since they could enable an ecosystem of useful apps that integrate data from many devices. Still, she said we’re at the early stage of platforms, and the state of user-generated data is “very, very disparate from the data structure of clinical systems [like Epic].” Even though Apple’s HealthKit is here, it’s a “very one-way, directional integration with Epic” at this point. This makes us excited about the potential even as we register how slowly it is emerging.

6. In a lightning quick 10-minute talk, GreatCall CEO David Inns provided what we felt were six really outstanding tips for succeeding in digital health with “older” consumers; we felt his advice was applicable to all industries, and have replicated it below.

• You can’t solve today’s problem with apps alone. He noted that the 65+ year-old population is divided into two groups: those who are more active and don’t want help vs. those with high healthcare costs that do want help. The latter group – where interventions have potential to bend the cost curve – has just 5% smartphone penetration vs. ~30% penetration in the more active group. We’re surprised it is as low as this.
• Solve the adoption problem with simplicity and service. Mr. Inns cautioned against over-engineering and implored the audience to minimize barriers of all types, even seemingly trivial ones like product acquisition.
• Focus on solving problems, not technology. “Cool is not cool for the older consumer. They do not buy technology for technology’s sake.” Whether it’s a fear of falling, a fear of leaving house, or a desire to feel more connected, the product needs to solve that issue.
• Engage family caregivers. A RAND study estimated the cost of family caregiving (hours multiplied by minimum wage) at a shocking $522 billion per year. “That’s the economics,” he said, “and it’s only getting worse.” Mr. Inns believes that caregiving is inefficient because technology is often not utilized at all.
• Can you go direct to consumer? You will need capital, but the market is there. Mr. Inns criticized the current trend of “pilot-itis” – “Everyone is piloting and no one is rolling out.” He was a clear fan of going direct-to-consumer, particularly when a product solves a problem and consumers would be willing to pay for it – that last is an interesting point, however, given consumers’ very high expectations about not paying for much.
• Understand it is still early and be patient. To make his point, Mr. Inns tallied the estimated monthly US Google searches in four different categories: caregiving (28,000), independent living (48,000), medical alert (31,000), and baby monitor (450,000!). He said there are 20 million seniors that could benefit from “active aging technology,” as well as 40 million caregivers that want help. Conversely, only four million babies are born each year, lending a shocking paradox to the Google search statistics. Part of the problem, said Mr. Inns, is an absence of awareness that aging technologies are even available to help.

7. Consultant Mr. David Schie (CEO, Linear Dimensions) shared his forecasts for the future of wearables. Some were expected, others were exciting, and some were downright scary:

• Artificial Intelligence physicians. “Borders without doctors.” Pattern matching. Help with continuous monitoring for early detection and prevention.
• The password is “you.” Data security remains a problem, but the human body (and associated wearables) offers a myriad of options for personalized passwords.
• EEG form factors will improve and expand into workplace measurement, especially in developing countries. These systems can monitor how engaged employees are and if they are actively working, for instance, in a call center. Scary stuff – exciting for employers!
• Morphing materials – e.g., devices that can shift shape and have a keyboard rise out of them.
• Machine learning; system rather than component thinking. “Right now, the chip guy is separate from the system guy who is separate from the algorithm guy.” When chips and algorithms work together, data can be sent more efficiently, improving speed and battery life.
• Electronic thread displays will help take the geek factor out of technology. He showed a picture of a glowing shirt; we’re unclear of the applications (there’s too much of this sort of feeling at CES for our comfort), but it sure looked cool.
• Big data will intrude further into our lives as biometric data is used by marketers and governments.

8. In the exhibit hall, NeuroMetrix showed off its new Quell device, a sleek, over-the-counter, FDA-approved, more consumer-friendly version of the Sensus pain treatment device. Shipments will begin in 2Q15 and NeuroMetrix is targeting a price of $249 for Quell and $30 for a one-month supply of the electrode pads (just $1 a day – pretty affordable!). The calf worn device – designed in partnership with IDEO – has many important advances over the prescription/reimbursed Sensus device. Quell has a slimmer profile, measuring about half the size of a paperback book and the thickness of an iPhone 5. Reps emphasized its FDA clearance for 24-hour wear, including during sleep (the device provides pain relief in 60-minute on/off increments). In line with most everything at CES, Quell also pairs with a beautiful smartphone app that tracks treatment time, device usage, and even sleep quality. It was clear from that app demo that IDEO’s design thinking played a major role in the product – e.g., very large font to make it easy for the most likely users of the device, the elderly. Of course, switching from the prescribed and reimbursed Sensus to an over-the-counter device is a major business model change, though one we think is very smart for NeuroMetrix. Consumers are already being asked to pay more out of pocket, and many are willing to invest in connected devices such as these. In addition, competitive bidding in BGM has decimated the Durable Medical Equipment category (of which NeuroMetrix is reimbursed under), and we assume the company saw blood in the water and sought to diversify its income stream. Given Quell’s excellent form factor, the team’s passion, and the unmet need in neuropathic pain, we hope the product does well.

9. DoctorOnDemand, one of the most impressive demonstrations we saw today, aims to make video telemedicine mainstream. CEO Adam Jackson teamed up with Dr. Phil to launch the initiative in 46 states about a year ago. After downloading the app for Apple or Android, a user creates an account. They type in what’s wrong, and within a few minutes, they are instantly connected via video chat to a board certified family physician. The app demo was super sleek (as easy as Skype or Facetime), and it even recovered beautifully when an unexpected incoming call disrupted the live conversation with a patient. We are huge fans of approaches like these that seek to change care delivery through an excellent user experience through efficient technology. There are so many pain points to in-office doctor’s visits, and we hope to see payers become more forward thinking on the cost-benefits and value of these care models. We certainly see little downside, particularly in diabetes, where blood glucose data can be analyzed remotely.

10. We had a fun exploration through the health, wellness, and fitness sections of the exhibit hall, with valuable updates from Misfit, Fitbit, Vigilant, and TellSpec.

• Misfit drew lots of attention given its partnership with Swarovski to make its Shine fitness tracker more attractive. The company drew quite a crowd to see the new crystal encased trackers (including a fully solar powered option!) in a booth about 10 times bigger than its small table last year. We salute Misfit for thinking outside the box and trying to make such tech-y devices more fashionable and useful in every day life, particularly for women that may not like the rubbery/plastic status quo of activity trackers.
• Fitbit gathered a busy crowd with the launch of its continuous heart rate trackers – we had a chance to try them on and were fairly impressed to see the data obtained right from the wrist, no chest strap needed. The company had a highly impressive list of partners that includes Cleveland Clinic, Walgreens, Humana, Alere, and 39 other organizations.
• Vigilant showed a product called the Bee, which attaches to the dial of a standard insulin pen and sends dosing data (via Bluetooth) to the phone (see YouTube Video here). The product is in the FDA approval process now. The company is also working on the VigiPen, its own pen with Bluetooth built right into the dial (patients would fill the pen cartridges manually; a hassle but potentially worth the seamless data stream).
• TellSpec is building a scanner (based on spectroscopy) to analyze the content of food and report the calories, carbs, fat, and protein. The device is very much in beta (about the size of a grapefruit) and it cannot estimate portion sizes (it reports the stats back per 100g, meaning a scale would be required to analyze a random plate of food). However, TellSpec is working to build image recognition into the app, allowing for portion size estimation. That would mean the holy grail of automatic carb counting via an app may be possible some day, however much of a long shot it seems. Our fingers are crossed!
• We didn’t see Glucovation or YofiMeter, two of the companies that garnered relatively more attention last year on the nascent diabetes front – we’ll be trying to get updates on both in the coming 24 hours!

-- by Adam Brown and Kelly Close