Rob McCray remembers the first time the leaders of two important industries got together in a meaningful way in San Diego.
It was spring 2006 and McCray and Don Jones, leaders of the newly formed Wireless-Life Sciences Alliance (WLSA), were organizing its first Convergence Summit, an initiative to bring together two of the city’s largest industries: wireless and life sciences. The problem is the two sides didn’t see why they should converge.
To prevent the invitations from being tossed in the trash, McCray sent them out under the names of Paul Jacobs, CEO of Qualcomm, and Ted Torphy, head of research at Johnson & Johnson. That, he figured, was the only way to guarantee attendees from both industries.
“A lot of these guys, even senior executives from companies on either side, didn’t have a clue as to why (Jacobs and Torphy) would be inviting them for the same meeting for a day and a half,” McCray said. “A lot of people there just didn’t get it. They didn’t see the future as we saw it.”
They do now. The eighth annual Convergence Summit was held in May and no one in the new field needed to be talked into attending.
San Diego at center of new field
Wireless health (also known as digital medicine, mobile health, connected medicine) is exploding, and San Diego’s strengths in wireless and life sciences put it at the center of the boom.
The San Diego area is home to more than 3,000 wireless companies and 600 life science companies. Add the many medical device manufacturers in neighboring Orange County and the assemblage of talent and opportunities for collaboration and innovation are enormous.
Companies are figuring out ways to use wireless sensors to collect data from patients in their homes and in hospitals and nursing homes, transmit the data, analyze it and, in some cases, provide treatment or therapy.
“We found that San Diego is almost the perfect place for us to be in terms of the opportunity to work with partners. Their competitive environment in this space is extremely vibrant and, more importantly, there are a lot of thought leaders that are out here that are adopting a lot of these new models,” said Navin Govind, founder and CEO of Aventyn, a wireless health firm in Carlsbad.
“Earlier on, we had investors that would talk to us and tell us, ‘Why wouldn't you move to the Philadelphia area or to Minnesota or to Pennsylvania or maybe even to the Bay Area?’, and we said, ‘No, this is where we believe the convergence of wireless, life sciences and healthcare is basically happening’ and I think that we made the right choice.”
In many ways, healthcare is an irresistible target for innovation. Everyone uses it, but no one is satisfied with it. It’s hidebound, expensive and stifled by bureaucracy and old ways of thinking.
Ripe for innovation
No one is busier trying to topple the healthcare system than Dr. Eric Topol, director of the Scripps Translational Science Institute in La Jolla and author of “The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care.” A prominent cardiologist voted “Most Influential Physician Executive in the United States” in a 2012 poll conducted by Modern Healthcare magazine, Topol uses his bully pulpit to attack the current healthcare system as wasteful and imprecise. He says wireless health and genomics will not only revolutionize care, but bring runaway costs under control.
The healthcare system is unlikely to reform from within, he said, so it needs radical thinking from the outside.
“Most of the innovations are coming from startups; very few are coming from well-established companies,” he said. “So this is a truly, exceptionally rich innovative space and, obviously, it needs capital and so there’s lots of entrepreneurs and venture capital, angel investors, all sorts of people getting behind these innovations because they can see that they have a particular promise.”
Medicine will have to open itself to innovation from other fields, Topol said.
“I think that the whole way that this space moves forward is by convergence of talent across many disciplines. You need people in medicine; you need people in engineering; you need folks in biocomputing, analytical, artificial intelligence, predictive analytics, machine learning – you need people that really cross many different spheres of talent and a fusion of efforts,” he said.
People like Kian Saneii, a veteran of the wireless industry and now CEO of Independa, a company which offers sensor and monitoring services to allow the elderly to remain at home.
“Five years down the road, when people look back, we will have a brand that's replaced ‘I've fallen and I can't get up.’ And why not have that brand be created by us? There's nothing that's missing from a technology or knowledge standpoint to create that brand, other than the effort and the execution. Because it didn't exist. It still doesn't exist,” he said.
Michael Chi, CEO of Cognionics, is entering the field after earning a PhD in electrical engineering from UC San Diego. The early stage startup is developing ECG and EEG sensors that can be used over clothes, which would make the process of getting readers faster and easier for patients and caregivers. Chi estimated the potential market at “well into the hundreds of millions.
“I think it’s quite big,” he said. “I think potentially this thing could supplant the way EEGs are done currently in pretty much every single application because of the convenience and time factors.”
WLSA is not alone in promoting the new field. Other major players in San Diego include West Health, BIOCOM, Scripps Translational Science Institute and CONNECT.
Of course, not all the players in this new field are startups. Wireless giant Qualcomm recently formed a new subsidiary, Qualcomm Life, complete with its own venture fund. While entrepreneurship generally is not associated with a company the size of Qualcomm, GM Rick Valencia said Qualcomm Life qualifies as an entrepreneurial venture because it’s a new industry with new customers and it’s selling, not chips, but a service – 2net, a device-agnostic network platform for gathering and transmitting wireless data between patients at home and physicians, institutions, labs and other institutions that need the data.
“We’d heard from several companies in the industry that they had the same problem, which is they’re very good at healthcare, they’re very good at health services, but they’re trying to provide these remote care services and that connection between the patient back to their systems was the hard part for them. Well, that’s what we’re really good at,” Valencia said.
Resistant to change
While the entry into digital medicine of a heavyweight like Qualcomm adds credibility to the idea that fundamental change is imminent, the large and entrenched U.S. healthcare system is not easily revolutionized. Radical change has been “just around the corner” for years and, despite the growing financial burden and inefficiencies of the current system, a wholesale restructuring is unlikely. Indeed, the reform that is happening is largely related to expanding access to healthcare, not necessarily improving how it’s delivered.
There are other barriers that digital medicine entrepreneurs must hurdle. Compared to software, medical entrepreneurship is more expensive and time-consuming and sometimes subject to regulatory approval. What’s more, sometimes the intended audience isn’t interested in innovation or change. Consider the fact that the design of the stethoscope hanging around many doctors’ necks is nearly 200 years old.
Topol acknowledged that many physicians are reluctant to change, but said the forces behind innovation are too hard to resist.
“It’s not going to be like a light switch, it’s going to be a wavefront of things. It’s so pervasive that it’s going to be different steps and different aspects,” he said, adding that informed patients will drive the change.
And there are signs of change. According to seed accelerator Rock Health, venture funding for digital health startups rose from $956 million in 2011 to $1.4 billion last year, an increase of 46 percent. More facts? The number of mobile healthcare and medical app downloads was 44 million in 2012 and is projected to reach 142 million in 2016.
WLSA’s McCray is optimistic. “The inertia of going broke or leaving tens of millions of people outside the gates where healthcare is delivered will overcome the counter-inertia from a transactional medicine model that pays for the wrong things and the inertia of the professions that have a total lock on how healthcare is delivered,” he said.
“I think that, at this point, the technology innovation is not the long pole in the tent with respect to the connected health or digital health market. It's actually adoption, and that's more for markets, institutions and consumers.”
To learn more about entrepreneurship and life sciences, visit eMed, a Kauffman Foundation blog.