2009 State Of The Industry
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2009 State Of The Industry



As the break out year for wireless health comes to a close, so too does MobiHealthNews\' first ...

As the break out year for wireless health comes to a close, so too does MobiHealthNews\' first
year of publishing. Please accept this report as our holiday gift to you. Feel free to re-gift it to
colleagues, friends and family. For those scrappy wireless health startups reading, this may be an
opportunity to approach that wealthy uncle or aunt you had hoped would come on as an Angel
investor—N.B. this report contains nearly all of the wireless health market metrics publicly
released this past year as well as a round-up of other startups that received funding in \'09. The
quarter-by-quarter deals charts also read like an industry timeline that chronicles much of the
higher-level activity that took place throughout 2009.



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2009 State Of The Industry 2009 State Of The Industry Document Transcript

  • WIRELESS HEALTH:STATE OF THE INDUSTRY2009 Year End ReportDecember 16, 2009
  • TABLE OF CONTENTSPublisher’s Note and Editor’s Letter 1Industry Metrics: Wireless Health by the Numbers 2Carriers Take the Lead on Wireless Health 7Care Providers Push Pilots, Look for Results 11Alliances and Institutes Accelerate Time to Market 14Reimbursement Rises and Falls 18Consumer Health: The Answer to “Who Pays?” 202009 Wireless Health Venture Capital 232009 Wireless Health Deals 25A Step-By-Step How-to for Wireless Health Regulation 32The Year in Conclusion 35
  • Publisher’s NoteDear reader,As 2009, the first year of publishing for MobiHealthNews draws to a close, our team has beenbusy revisiting the top stories, deals, interviews and event coverage from the past 12 months.After writing more than 700 posts on the MobiHealthNews site, publishing 45 newsletters,attending and covering countless industry events and reading well over 2000 comments from ourreaders, we would like to present the MobiHealthNews Wireless Health State of the Industry YearEnd Report. We would like to thank our sites premier sponsors: MedApps, West Wireless HealthInstitute and AllOne Health for supporting our efforts. We would also like to thank our publica-tions many outside contributors whose perspective has added experience and depth to ourindustry coverage. While this report pulls from some of their work, I would like to point out thatany errors, misconceptions or wayward commentary rest squarely on the shoulders of our editor,Brian Dolan.Thank you for being an active member of the MobiHealthNews community. We look forward toserving you in the New Year.Sincerely,Joe MailliePublisher, Co-FounderMobiHealthNews Letter from the EditorDear Reader,As the break out year for wireless health comes to a close, so too does MobiHealthNews firstyear of publishing. Please accept this report as our holiday gift to you. Feel free to re-gift it tocolleagues, friends and family. For those scrappy wireless health startups reading, this may be anopportunity to approach that wealthy uncle or aunt you had hoped would come on as an Angelinvestor—N.B. this report contains nearly all of the wireless health market metrics publiclyreleased this past year as well as a round-up of other startups that received funding in 09. Thequarter-by-quarter deals charts also read like an industry timeline that chronicles much of thehigher-level activity that took place throughout 2009.We hope that the recaps and summaries contained herein provide a snapshot of much of theactivities that accelerated the wireless health industry these past 12 months. By the looks of it,2010 should see even more action for wireless health. We look forward to serving you in the NewYear.Many thanks,Brian DolanEditor & Co-FounderMobiHealthNews State of the Industry Page 1
  • Industry Metrics: Wireless Health By the NumbersNumbers can be helpful. While industry metrics alone cannot propel an emerging marketforward, they can serve as inspiration to make a change. Many of the numbers pegged in thissection point to opportunity. Here is the summation and aggregation of a years worth of indus-try metrics that have shaped and prodded wireless health strategy in 2009.Sizing up wireless healths market opportunityThe current wireless home health market is $304 million, according to CTIA, the Wireless Asso-ciation. Citing Parks Associates research, CTIA stated that the market is expected to grow to $4.4billion in 2013, with estimated annual growth rates of 96 percent in 2010, 126 percent in 2011,95 percent in 2012, and 68 percent in 2013.ABI Research estimates that the market for wearable wireless sensors is set to grow to more than400 million devices by 2014. Of course health and fitness sensors arent the only use case forwearable sensors but they will likely dominate that market. ON Worlds research views the wire-less sensor market through a different lens: While it does not estimate the market for “wearable”wireless sensors, it believes wireless sensors in general will reach a global market value of $6billion by 2012. That estimate would include wireless sensors installed at home or in managedcare facilities: Certainly a key technology group for home health.ABI Research also estimates that revenue from worldwide sales of WiFi-enabled healthcareproducts, a specific sub category of wireless health that probably includes medical devices insidecare facilities, will reach nearly $5 billion in 2014.Forgetting the specific technologies for a minute: What about a market size for home healthmonitoring of chronic diseases overall? Berg Insight pegs that figure at $11 billion last year forthe US and Europe. That market is growing at 10 percent per year, the firm claims, and some 300million people in Europe and the US have at least one chronic disease that may benefit fromhome health monitoring. Berg believes that about 25 percent of that population would benefitfrom existing home monitoring solutions currently available, while some 50 percent wouldbenefit from integrating or connecting existing medical devices with their mobile phones.No matter how you slice it, the market for wireless health is ripe and growing.Consumer demandSome 78 percent of the US is interested in mobile health solutions, according to a surveyconducted by CTIA and Harris Interactive. About 15 percent of the US is extremely or very inter-ested in learning more about mobile health solutions, according to the survey. Interestingly, 19percent of respondents said they would upgrade their current mobile phone plan to get accessto wireless health services, while about 11 percent said they would even switch carriers to getaccess. Why were they so eager? About 40 percent said mobile health would supplement themedical care they receive from their doctor; 23 percent believe mobile health services could State of the Industry Page 2
  • Industry Metrics: Wireless Health By the Numbersreplace doctor visits altogether. More than half of respondents said mobile health would benefitrural populations the most; just under half of respondents believed people with chronic condi-tions would benefit the most; 41 percent said that retired and or Medicare patients wouldbenefit the most from mobile health. Finally, 38 percent said caregivers would gain the mostfrom mobile health services.PricewaterhouseCoopers conducted a similar survey that found 73 percent of consumers woulduse biometric electronic remote monitoring services to track their chronic condition or vitalsigns. The figure closely mirrors the near three-quarters of the US population interested inmobile health.Saying and doing are two separate things: According to a survey conducted by the National Coun-cil on Aging: One in four people with chronic conditions are delaying care. The percentage ismuch higher for Baby Boomer women (39 percent) and Latinos (43 percent.) Perhaps easier-to-use and more productive tools like some mobile health solutions could help encourage thosewith chronic conditions to take control of their own health sooner.Expected consumer demand is driving wireless health uptake in managed care facilities: A surveyconducted by the Mathers LifeWays Institute on Aging found that senior living communityadministrators expect that smart home and wireless health offerings will attract residents totheir communities. As a result smart home technologies are expected to increase their penetra-tion from 8 percent of senior communities today to 39 percent come 2013.Overburdened healthcare systemWhile the aggregate influx of connected health devices and monitoring services could potentiallyinject a fire hose of new data into an already overtaxed healthcare system, many wireless healthtools can help care providers do their job more efficiently and stretch their reach more comfort-ably beyond their current workload. The numbers indicate that care providers as a group areshrinking while the number of sick and elderly Americans is increasing. Wireless health can playa role to mitigate these alarming trends.At the beginning of 2009 during the height of the economic downturn, 71 percent of hospitalssaid that budget allocations for IT were expected to be smaller in 2009 than in 2008, accordingto a study commissioned by NCR. Because of the economic downturn some 36 percent of hospi-tals said they were being more cautious about IT spending, while 19 percent said they hadalready delayed spending on certain IT purchases. A full 16 percent delayed all non-essential ITproject funding as of February.As IT budgets shrank, the specter of a physician and nurse shortage loomed: The number of USmedical school students who choose primary care has dropped almost 52 percent since 1997,according to the American Academy of Family Physicians (AAFP). The group predicts a shortageof 40,000 family physicians by 2020. The US currently has about 100,000 family physicians, but it State of the Industry Page 3
  • Industry Metrics: Wireless Health By the Numberswill need about 140,000 in ten years. Only half the number of physicians needed are entering thefield today.The shortage of nurses is already taking a toll on those in wards today: Nurses report the short-age impacts their day-to-day job, according to a study conducted by Epocrates. About 46 percentof nurses say the shortage decreases the amount of time they can spend with their patients.About 42 percent say it increases their responsibilities and about 37 percent say it increases theirpatient load.To compound the problem, Americans as a group are getting older. Today, about 12 percent ofthe US is 65 years old or older, but by 2030 about 20 percent of the US population will be 65 orolder. In 2005 the 78 million Americans 65 years old or older accounted for $2 trillion in totalhealth expenditures. The 78 million Baby Boomers, who were born between 1946 and 1964, willbegin turning 65 in 2011. The other group that could add to the strain on the system is the 47million uninsured Americans.Aging aside, the US population as a whole is not fit. The CDC said that the average American isabout 23 pounds overweight and consumers eat about 250 more calories a day than the averageAmerican did two or three decades ago.According to the West Wireless Health Institute 5 million Americans are affected by Alzheimers;20 million are affected by asthma; 3 million are affected by breast cancer; 10 million are affectedby COPD; 19 million are affected by depression; 21 million are affected by diabetes; 5 million areaffected by heart failure; 74 million are affected by hypertension; 80 million are affected byobesity; 15 million are affected by sleep disorders.Our overburdened healthcare system cannot help them all through the old methods, but wire-less remote monitoring tools could help prevent and/or manage these conditions and others.There are many factors that lead to disease, but up to 40 percent of all chronic conditions areattributable to our behavior. Wireless health solutions can monitor, analyze, encourage andultimately change behavior.The tools are at handFor many access to wireless health solutions is a given: Close to 90 percent of the US population,about 276 million Americans, already has a mobile phone. During the first half of the year morethan 740 billion text messages were transmitted in the US. Text messaging is one of the simplestchannels to deliver public health messages like the White House plans to do with its Text4Babyprogram for low income, expectant mothers.The Center for Connected Health estimates that there is about 20 or 30 percent of the popula-tion where text message reminders will be very powerful. State of the Industry Page 4
  • Industry Metrics: Wireless Health By the NumbersBeyond text messaging, close to 19 percent of Americans now have smartphones. By oneestimate there are about 5,000 health and medical applications currently available in the marketfor smartphone users.Smartphone users may include a number of Medicaid patients: According to one “unofficial”study referenced at a wireless health industry event this year, five out of seven Medicaid patientsin New York and New Jersey use smartphones.Of course, healthcare providers are also adopting mobile phones: Manhattan Research foundthat 64 percent of physicians use a smartphone today. Thats 20 percent more physicians than in2008. By 2013, 81 percent of physicians will use smartphones, the firm predicts.Healthcare providers have found that not all their patients are mobile phone or technologicallysavvy, however: About 33 percent of the people the Center for Connected Health works with intheir wireless health pilots need a phone call to have someone walk them through how to usewireless devices.The tools are largely available and in the market. The key is to let the public know that theseservices are available, and then, of course, be sure to support the offerings with adequatecustomer service.Estimates for cost savingsVerizon Wireless recently estimated that mobile broadband solutions improved U.S. health careproductivity at a savings of almost $6.9 billion. That figure is expected to increase to $27.2 billionby 2016. And its not just the carriers predicting big numbers: According to one survey conductedby Cambridge Consultants, 75 percent of healthcare providers, patients, payers and technologyenablers believe that connected health preventative services could cut healthcare expenses by40 percent.The Center for Connected Health sees two key drivers for connected health: Employers want tokeep their health insurance costs low by keeping employees healthy; Insurers want to keep theircosts low by ensuring care providers manage costs.As employers explore ways to help keep their employees in shape and manage their chronicconditions, wireless health service providers need to be there with solutions that have demon-strated efficacy.Insurers are beginning to increase capitation in order to put pressure on care providers to keepcosts low. The Center for Connected Health noted that its parents company, Partners Healthcarehas Blue Cross Blue Shield of Massachusetts breathing down its neck to make sure they are man-aging costs. Capitation is where the insurance provider pays care providers a flat rate for a yearto care for patients and the care provider then has to do its best to control costs within that State of the Industry Page 5
  • Industry Metrics: Wireless Health By the Numberscontext. Partners expects that in the next three years close to 50 percent of its revenue will becapitated. Thats motivation to keep patients healthy and prevent readmissions by equippingpatients with the tools that help them to better manage their own health.At least 125 million Americans are living with one or more chronic diseases. An individual livingwith one chronic disease costs the US healthcare system $6,032 a year on average, according toJohns Hopkins School of Public Health. The total costs of chronic diseases in the US healthcaresystem today top $1.4 trillion.If a wireless health solution can help take a bite out of these figures, there is a business case forit. State of the Industry Page 6
  • Carriers Take the Lead on Wireless Health“We took a run at this five years ago and it fizzled out pretty quickly,” explained Rob Mesirow,Vice President of CTIA, the international association for the wireless industry. “Quite frankly, itjust wasn’t the time, the stars weren’t aligned, wireless data networks weren’t robust enoughand medical data wasn’t there. Now, the next generation of doctors, who are more comfortablewith health IT technology, along with stronger mandates from the federal level and robust carriernetworks are coming together,” Mesirow told MobiHealthNews during an interview this pastspring. “Everyone agrees that the healthcare industry is inefficient — and that’s putting itlightly.... When I specifically asked the carriers which verticals should we be focusing on, carriershave unanimously said that healthcare is one we should go for.”Carrier involvement starts with M2MOne way that U.S. carriers will enable the wireless health market is via machine-to-machine busi-ness units and joint ventures, which aim to support connectivity for devices other than tradi-tional mobile phones. Earlier this year Verizon Wireless announced a machine-to-machine(M2M) joint venture with Qualcomm, called nPhase, which among other devices—will supportwireless remote monitoring company, CardioNets connectivity. Similarly, AT&T opened a devicecertification lab that aims to accelerate the entry of “netbooks, eReaders, portable navigationdevices, utility products, and healthcare-related tracking devices” into the market. Shortly afterthe nPhase and AT&T lab announcements, Sprint inked a multi-year agreement with M2M com-pany DataSmart to help embedded device makers bring their products to market sooner. Sprintcited the demand for sophisticated M2M applications, including "the rapid growth in M2Mhealthcare."Amazons eBook reader, the Kindle has long been referenced as a model that the wireless healthindustry should emulate in terms of working with wireless carriers: “Maybe it’s a little overusedat this point, but the Kindle represents a different model. It’s not carrier-based. It’s notsubscription-based. It’s one example of the kind of creative business models that are coming outof the wireless industry,” Mesirow said. Because of devices like the Kindle and the opportunityfor wireless health devices, Harbor Research predicted this past year that M2M device shipmentsmight top 430 million units by 2013.Verizon CEO Ivan Seidenberg believes that M2M device uptake is set to explode in the U.S. Whilewe are approaching a 90 percent penetration rate in the U.S. for the number of Americans usingmobile phones, the opportunity to reach 500 percent penetration is possible thanks to embed-ded devices and machine-to-machine (M2M) services. Seidenberg specifically pointed toconnected medical devices like a wireless-enabled glucose monitor as an example of an embed-ded device that could push the industry to 500 percent penetration.Does wireless health need a LifeComm anymore?“MVNOs seem to pop up for anything these days,” Mesirow told MobiHealthNews. “So a health-care MVNO? Sure, why not? But I think all of the carriers are interested in offering wireless health State of the Industry Page 7
  • Carriers Take the Lead on Wireless Healthservices over their networks.”Back in 2005 Qualcomm began to publicly discuss plans to launch LifeComm, a mobile phoneservice with wireless health applications and devices at its core, but back then specialized mobilephones services, also called mobile virtual network operators (MVNOs) were all the rage: ESPNMobile, Disney Mobile and AMPd Mobile were among the MVNOs that eventually made it tomarket. These sports and entertainment focused services quickly lost steam and mostlydisbanded within a year. LifeComm never launched officially, but Qualcomm worked on theinitiative for years until deciding in 2009 that the existing wireless carriers, especially VerizonWireless, AT&T, Jitterbug and Sprint were willing to offer wireless health services themselves.Early in 2009, just before MobiHealthNews broke the news that LifeComm was shutting down,Qualcomm presented some of the devices and services that LifeComm was planning to support:A mobile phone with an embedded glucometer for diabetics and a mobile personal emergencyresponse system (MPERS) medallion for seniors. For the MPERS device think "Lifeline onsteroids," a Qualcomm representative said, a medallion small enough for users to wear aroundtheir neck, but it still contains the "guts" of a mobile phone and an accelerometer to detect activ-ity.“Qualcomm is reviewing its options with LifeComm in light of current capital market conditionsthat have prevented LifeComm from raising the third-party capital necessary to fully develop itsinitial launch product,” a Qualcomm spokesperson told MobiHealthNews in July. The devices andservices that were set to launch through LifeComm ended up forming into their own start-upsand companies, Qualcomm said at an event in early December. In a lot of ways, the shuttering ofLifeComm was a good news story for the emerging wireless health industry, Qualcomms ClintMcClellan noted. It meant that wireless carriers were willing to support these devices andservices. Not needing LifeComm should be seen as a bright spot.Carriers establish their own health focused business unitsWhile most of the major U.S. carriers ramped up their M2M businesses in 2009 — business unitsor joint ventures that clearly have a stake in wireless health—a few carriers around the worldactually launched healthcare dedicated business units, too.Both Vodafone Group and Verizon, the two owners of Verizon Wireless (45 percent and 55percent, respectively), launched healthcare focused business units during the fourth quarter ofthe year.“I personally believe that the mobile phone has a very significant role to play in the provision ofhealthcare,” Vodafone Group CEO Vittorio Colao told attendees at the Mobile Healthcare Indus-try Summit in London this December. Colao explained that key use cases for mobile in healthcareinclude: the simplification of clinical work flows, statistical analysis of record keeping, supportingthe chronically ill at home as well as reaching under-resourced and geographically dispersed State of the Industry Page 8
  • Carriers Take the Lead on Wireless Healthcommunities.In the short term, Colao said that many mobile health services can be created without having todevelop new technology. More often than not we think about mobile health as very complexsystems, which may be right for developed markets, but in general technology is not the prob-lem. For developing markets especially, many pilots have shown the power of mobile healthcare,Colao said, but unfortunately there has been little success in scaling these projects. VodafoneGroup recently established a new mobile healthcare unit that aims to work with medical organi-zations, governments and pharmaceutical companies to fully understand what the needs are.“We want to start listening to governments and listening to pharmaceuticals to understand whatthe needs are. It is clear that there is a pressing need for a reevaluation for how we deliver healthservices in the coming year,” Colao said. “It is also clear to us that mobile technology has a roleto play in how we … provide better service and improve healthcare for those in mature — andmore importantly — in developing markets.”Verizon launched its healthcare focused business unit in November: Verizon Connected HealthCare. On the wireless front, the group is working with a hospital in New Jersey to build a collabo-ration service that allows specialists to conduct video consultations via mobile devices:“Also coming are even more mobile capabilities, including taking video collaboration down to themobile device. For instance, Verizon is already working with a hospital in New Jersey, [Verizonsmanaging principle for healthcare, Nancy] Green said, that is building a collaboration servicewith mobile endpoints, allowing specialists to do consultations from almost anywhere.”Verizon offers video consultations for applications like “tele-stroke” which allows physicians toreview patients’ cases via live video to determine whether they should wait for a doctor to visitor be rush to emergency care. Green believes these services will become much more effectiveonce remote patient monitoring of vitals and video collaboration applications come into the mix,too.Jitterbug ramps up wireless health servicesBy any measure GreatCalls Jitterbug mobile phone service for seniors has led the pack of carriersoffering or developing wireless health services for their users. In the past year Jitterbug hasbecome profitable; added Internet capabilities to their phones; switched their network fromSprint to Verizon Wireless; acquired a mobile personal emergency response service start-upcalled MobiWatch; conducted pilots with various wireless health vendors like Meridian and Well-Doc; and launched a Services Store stocked with wireless health services.AT&T develops personal health devices; enables remote medical servicesWhile AT&T is the exclusive US carrier for the Apple iPhone, which has spurred much of the State of the Industry Page 9
  • Carriers Take the Lead on Wireless Healthdirect-to-consumer wireless health market this past year, the carrier itself has also made movesto offer wireless health services directly to its users. For the past year AT&T has worked withTexas Instruments and start-up 24Eight on a “smart innersole” technology that uses wirelesssensors to monitor the users balance and gait. At the end of the year AT&T unveiled a prototypeit called “smart slippers,” which target the senior care market. One analyst estimated the smartslippers and their service package could run about $100 per month.AT&T also announced it was providing cellular connectivity to Vitalitys GlowCaps device, whichis a pill box cap that fits most standard pill boxes and glows when the user fails to take their medi-cations.AT&T is also working with Hollywood-based Wound Technology Network to support the physi-cians groups remote wound care management service. WTN is now using HTC smartphonesrunning on AT&Ts data network to access patient records and view images of wounds. WTNpreviously inked a deal with Verizon Wireless to support laptop data cards for its physicians. Labworkers at AT&T’s quality testing lab in San Antonio, Texas also recently let it slip that the carrieris testing a number of wireless devices and services, including mobile medical tracking systems.Sprint’s varied wireless health approachAlong with Johnson & Johnson company Lifescan, Sprint funded a mobile phone-based diabetesmanagement system pilot conducted by WellDoc. WellDoc found that the pilot led to a 2 percentA1c drop among many of its pilot users.As noted above, Sprint announced this year that it would work with M2M company DataSmartto help embedded device makers to bring their products to market sooner.Sprint teamed up with GE Healthcare update San Antonio, TX-based Methodist Healthcare’s sixhospitals with a converged wireless network platform. The care provider said that since thesystem could more easily centrally manage the groups communications, the number of ITemployees might decrease, which opens up an opportunity to hire more care workers.Sprint partner mVisum announced this year that it was working with the Veteran Affairs to test asystem that aims to get critical medical information to a physician while they are on their way toa patient’s bedside.Conclusion: Carriers are out in frontMore so than any other potential wireless health service provider, wireless carriers are currentlyleading the way for managed wireless health services. Carriers have an engaged user base andthe tools are already at their disposal to offer wireless health services to consumers. It looks likein the year ahead that carriers will continue to dominate as the service providers of choice. In afew years carriers will begin to work more closely with care providers not just to offer services tothe care facilities themselves but also to offer them to the care providers patients. State of the Industry Page 10
  • Care Providers Push Pilots, Look for ResultsKaiser Permanente leads the pack on wireless healthWhile a number of care providers have researched and developed a number of wireless healthservices, the clear leader of the pack in 2009 has been Kaiser Permanente. At the very beginningof the year, Kaiser announced that it had just completed a pilot for text message appointmentreminders with SMS vendor Mobilestorm. The pilot resulted in 0.73 percent fewer “no shows”across one of its care facilitys population, which prompted the care provider to work toward anational rollout of the service.Kaiser Permanentes Director of Enterprise Engineering Carlos Matos told MobiHealthNewsduring an interview at the HIMSS conference that text messaging reminders are just the begin-ning:“On the SMS side we have had some good success with [text message] integration where wesend notifications directly to member [mobile phones] for a variety of reasons,” Matos said. “Ourplan is to stimulate more immediacy for our members and also make these communicationsmore feature rich by integrating Kaiser Permanente’s carepoint solutions. We want to be able toprovide outreach methods that traditionally took the form of mailings and convert those com-munications to kp.org or SMS.”Matos also noted that text messaging could help with the care provider’s population care man-agement. For example, a diabetic who has not had an A1c exam in a certain amount of time maybe notified based on several different elements pulled from his EMR that it’s time to come in foran appointment. (Similarly, Mount Sinai recently announced a pilot it was conducting with Care-Speak to send adherence reminders via text messages to a teenager who had undergone a livertransplant recently. The pilot demonstrated a decrease in the incident of rejection episodes forthe teens.)Kaiser Permanente is also “white boarding” a number of other innovation projects. One of thenext services Matos said to expect coming out of Kaiser’s innovation team may be support forconnected biomedical devices. These would be simple ones like wireless-enabled or USBconnected blood pressure monitors that KP can equip its patients with for at-home use. Thesereally improve clinical outcomes, Matos said, and they let providers capture very granular infor-mation that they can then use to make decisions based on that data analysis. Another examplemay be a connected weight scale that helps providers track a congestive heart failure patient’sweight over time.Kaisers Medical Director of Health Informatics & Web Services Ted Eytan told MobiHealthNewsin an interview this year that the value of mobile "comes back to getting that information in auseful way -- right when you need it. What Kaiser Permanente is very good at is taking really largesystems and making them very accessible and flexible, which is something a lot of Health 2.0companies cant do as well. We watch some of the mobile [health] demos going on and try totake what we can learn from them and apply it to our own system, but our goal, of course, is State of the Industry Page 11
  • Care Providers Push Pilots, Look for Resultsalways to improve the interaction between patient and doctor in order to improve medical care."At Kaiser the focus is clearly not on the technology or wireless in particular, but regardless, thegroup is pushing ahead with more wireless health offerings than most care providers in the US.The US Army and the Department of Veteran Affairs (VA)One of the first wireless health deals inked in 2009 was between AllOne Health and the Army fora mobile phone based communication system that allowed the Armys care givers and physiciansto check-in and remotely monitor “wounded warriors” who had recently returned from the warwith traumatic brain injuries. The Army licensed AllOne Mobile for 10,000 soldiers and is rollingit out on an incremental basis.A key wireless health partner of Sprint and BlackBerrys, mVisum, has also worked with the VAthis year on wireless health solutions. mVisum is equipping physicians with a mobile phone appli-cation that allows them to access patient health information while they are on their way to thepatients bedside.Intel also announced that a regional division of VA was now a customer: The division of the VAhad purchased a number of the companys remote patient monitoring, home health touchscreendevices: Intel Health Guides. Intel also inked deals with Memorial Hospital & Health System anda number of other Indiana-based home health agencies.Apples iPhone: A game changer for care providers?A number of hospitals began to take a look at how they could better integrate Apples iPhone intotheir overall clinical workflow once it became clear that a majority of physicians (64 percent) nowuse smartphones (and a growing number of them favor iPhones.) One of the first hospitals toannounce its infatuation with the iPhone was Pennsylvania-based Doylestown Hospital, whichwas the first to be profiled on Apples corporate site for equipping its care workers with iPhones.The hospital connected the iPhones to its Meditech EMR system. Houston-based MemorialHermann care facilities followed as a second hospital profiled on Apples site. Then, news brokethat Apple was working directly with EMR vendor Epic Systems to integrate iPhones into EpicsEMR solution for a hospital at Stanford University. Rumor has it that the iPhone-EMR solution willroll out early next year and big care providers like Kaiser Permanente are already taking a look.One start-up that has begun to capitalize on the iPhones growing popularity among care provid-ers is Voalte, a Florida-based startup the offers an iPhone-enabled voice, alarm, text service fornurses. The company piloted its application for nurses at Sarasota Memorial Hospital.Care providers begin to court wireless remote monitoringA number of care providers are beginning to develop and launch wireless remote monitoring State of the Industry Page 12
  • Care Providers Push Pilots, Look for Resultsservices for various chronic conditions: Partners Healthcare in Boston even spun out a start-up,named Connected Health, that is initially focused on a service for wireless remote monitoring ofblood pressure through a connected cuff. The start-up just completed a pilot with Boston-areaemployer EMC.A number of care providers are also taking a look at wireless sensors: London-based St. MarysHospital plans to trial Toumaz Holdings wireless sensor for vital sign monitoring. The bandaid-like sensor monitors skin temperature, heart rate and respiration. Wireless sensor-enabledhome-based monitoring startup WellAware inked deals with two senior care facilities: Evangeli-cal Lutheran Good Samaritan Society and Hastin. WellAware will equip the outpatient centerswith wireless sensors for senior care. WellAware inked the deals this fall – only a few weeks afterthe startup launched. Mayo Clinic and STMicroelectronics are collaborating on a wireless cardiacmonitoring service that will monitor heart rate, breathing rate, and physical activity. St. FrancisHospital is testing out St. Jude Medicals wireless-enabled, remote monitoring pace maker, whichtransmits data to the server at least once a day. Finally, Ohio Health has been testing out iShoessmart innersole technology for fall prevention. iShoe is expected to launch in 2010 with a $100pricepoint, according to one estimate.Health insurers offer wireless health servicesHealth insurers have also begun to take an active role in offering wireless health solutions to theirmembers:Significa Insurance Group (Significa) and Erin Group Administrators both inked deals with AllOneHealth to allow their members to view, manage and exchange their health information with theirphysicians. AllOne Mobile works on a wide variety of mobile phones so the offering is easier foran insurance company to provide. When wireless health offerings are tied to a specific device, itmakes more sense for the wireless carrier that supports that mobile phone to offer the service.Harvard Pilgrim made headlines this fall when it announced plans to pilot MedMinderswireless-enabled PillBox for chronic kidney disease (CKD) patients. CKD affects about 26 millionpeople according to the companies and it has no cure. By adhering to the right medicationregimen, however, the disease can be managed. Harvard Pilgrim is piloting the system to deter-mine its efficacy.Blue Cross Blue Shields venture arm has been particularly active in investing in wireless healthstartups this year: The firm made two big investments, one in Myca and another in Phreesia.Phreesia offers a touchscreen device that enables physicians offices to more easily check-inpatients and determine their insurance coverage immediately. Myca powers a physician collabo-ration platform that integrates everything from billing to EMRs to other administrative tasks andallows physicians to interact with patients via email or even text message. State of the Industry Page 13
  • Alliances and Institutes Accelerate Time to MarketWhile wireless carriers and care providers are perhaps two of the most important players in wire-less health after the patient, of course, this past year saw a growing role for industry organiza-tions, academic institutions and non-profit institutes. The groups evangelized the industrythrough events and educational seminars and pushed regulators and lawmakers to ripen themarket for innovation. Their guidance has shepherded start-ups closer to launch and acceleratedthe overall progress of the industry in the past year. Here are the players worth keeping an eyeon:West Wireless Health InstituteIn March the West Wireless Health Institute founded thanks to a $45 million gift from the Garyand Mary West Foundation and support from Qualcomm and Scripps Health. The San Diego-based Institute has since worked to take wireless medicine out of the lab and into the market-place. Don Jones, Qualcomm’s Vice President of Health and Life Sciences serves as the Institute’sFounding Board Member while Scripps Health’s Chief Academic Officer Eric Topol is theInstitute’s Chief Medical Officer. Gary West is the Institutes chairman and Mehran Mehreganyrecently joined the team as the Institutes executive vice president of engineering and chief ofengineering research. The organization is currently recruiting for other leadership positions.At the time of the Institutes founding, Topol noted that part of the Institutes mandate is to helpvalidate the hundreds of wireless health devices that may already have FDA approval but arelooking for clinical validation to make it to the market.By mid-year the WWHI announced that the first start-up it would help bring to market was wire-less sensor-enabled remote monitoring start-up Corventis, which specializes in detecting heartfluid status for patients with heart disease. The company uses a peel-and-stick, bandaid-likewireless sensor that can interface with a wireless device to track and monitor patients’ vital signs.The WWHI is currently facilitating clinical trials for the company.The WWHI has also been particularly effective at educating the industry and others about thewireless health opportunity by evangelizing key conditions that wireless health solutions couldbetter manage and assembling data about the opportunities to lower costs in the overburdenedUS healthcare system through the use of wireless remote monitoring technologies.UCLA Wireless Health InstituteThe Wireless Health Institute (WHI) was established last year as a community of UCLA expertsfrom engineering, medicine, nursing, pharmacology, public health and other disciplines thataims to improve “the timeliness and reach of health care through the development and applica-tion of wireless, network-enabled technologies integrated with current and next-generationmedical enterprise computing.” In 2009 UCLA appointed Dr. Patrick Soon-Shiong as executivedirector of the universitys Wireless Health Institute. State of the Industry Page 14
  • Alliances and Institutes Accelerate Time to MarketSoon-Shiong told MobiHealthNews in an interview that the Institute’s mandate is to not onlyenable the development of these technologies but also to foster wireless health start-ups andtest the wireless health technologies to prove their efficacy: “I believe the only way we can trulytransform healthcare is if we enable both patients and providers to have access to data that istruly ‘outcomes actionable,’” Soon-Shiong said. “Evidence-based, outcomes-driven data at thepoint-of-care is the goal. Those few words have a deep meaning to them — evidence-basedoutcomes based point-of-care. That is the holy grail for healthcare transformation.”Soon-Shiong noted that medication adherence is a key problem that wireless health can work tosolve. He also pointed to a few other wireless health technologies he thinks encapsulates thepotential of the technology: wireless biometric devices; sensors that can help detect developingfoot ulcers before diabetics realize they are getting them; “smart” canes that use accelerometersto notify caregivers a patient may soon fall; and a wireless lens-less microscope that can use aphone’s camera for diagnostics.Continua Health AllianceThe Continua Health Alliance, a consortium of more than 220 wireless and medical companies,which aim to create an interoperable ecosystem of medical devices and systems, has been busythis year. After announcing its first two Continua-certified products, the Alliance also announcedtwo new wireless technologies for its Version 2 guidelines: ZigBee and Bluetooth Low Energy.Since then Continua has announced additional devices have been certified as Continua-approvedand interoperable.The Continua Health Alliance has also been recognized as one of the key evangelists for remotepatient monitoring on Capitol Hill. Continuas lobbying efforts helped convinced lawmakers toinclude remote monitoring in the US healthcare bill.Apart from ensuring interoperability among devices and lobbying the legislature, Continuasrepresentatives have been at most of the wireless health focused industry events in the pastyear. Chuck Parker, Continuas executive director gave a stirring speech at an event in Seattle thispast spring. Parker said that remote patient monitoring doesn’t need to do any more trials orpilots. He said that the Department of Veterans Affairs (VA) has done remote patient monitoringpilots with about 30,000 patients over the past four years. That’s enough pilots, Parker said, wedon’t need to do any more pilots for remote patient monitoring; we need to move to deploy-ments, and look to the VA for their pilots’ findings.CTIA, The Wireless AssociationCTIA is an industry association for the wireless industry that hosts a number of events through-out the year and also serves as the wireless industrys liaison with Congress and various regula-tory bodies. CTIA quickly became a champion of wireless health in 2009 as it made the emergingindustry a focus at its November event in San Diego. Apart from bringing in more than two-dozen State of the Industry Page 15
  • Alliances and Institutes Accelerate Time to Marketwireless health start-ups to show off their wares, the association also successfully courted theAARP to participate in the wireless health discussion.During the summer CTIA organized a wireless health event at the U.S. Senate, which brought thechairman of Intel and other wireless industry luminaries to discuss the opportunity that wirelesspresents to the healthcare industry. CTIA also lobbied the FCC not to enact net neutrality legisla-tion for wireless data networks, because, the CTIA argued, regulating the carriers ability tomanage wireless data traffic could stymie innovation particularly in the emerging wireless healthindustry. Requiring carriers to treat all data traffic the same would make it difficult for carriers toensure critical medical information reaches its destination on time or in tact, the associationargued. CTIA also suggested that the FCC make available more wireless spectrum for carriersciting the growing interest in wireless health services.American Telemedicine AssociationThe American Telemedicine Association (ATA) was created in 1993 by a group of doctors whowere using video conferencing links between larger health centers and rural clinics. The ATA nowdescribes itself as part trade association and part professional association, because its membersinclude clinicians, physicians, nurses as well as hospitals, institutions, government organizations,corporations, providers. The ATA offers educational work, including its annual conference, advo-cacy in Washington and elsewhere. The ATA also has special interest groups, about 15 differentmember groups in various areas that provide networking, and it is beginning to create practiceguidelines related to healthcare.Why is the ATA interested in wireless healthcare? Pike & Fischer recently predicted that themarket for telemedicine devices and services will climb to $3.6 billion in annual revenue over thenext five years largely thanks to a push from wireless technologies, data compression and smart-phones. Telemedicine will be dominated by wireless technologies during that time period: Morethan 70 percent of telemedicine will be wireless healthcare, according to the firm.m-Health Innovation CentreThis winter the GSM Association announced a partnership with the University of Manchester inthe UK to establish an m-Health Innovation Centre in the city of Manchester. The groups said thatthe center will have a UK focus to start and aims to promote healthier lifestyles and early inter-vention through the use of wireless technology, which it believes can improve health outcomes.The Manchester m-Health Innovation Centre plans to conduct multidisciplinary research, bring-ing together researchers, healthcare organisations and industrial partners to conceive, developand evaluate mobile health innovations. A major focus will be on citizen-led health and wellbe-ing, using mobile technology to enable people to play a more active role in determining theirown health, providing a more personalized and responsive interface to public services. The newcenter hopes to provide a forum for sharing ideas, in-depth analysis of the market for wireless State of the Industry Page 16
  • Alliances and Institutes Accelerate Time to Markethealth, facilitation of pilot trials as well as mHealth education and training.mHealth AllianceEarly in 2009, the Vodafone Foundation, UN Foundation and the Rockefeller Foundation officiallylaunched a new joint venture called the mHealth Alliance. By mid-year it appointed wirelessindustry vet David Aylward to helm the international organization as its executive director.The mHealth Alliance has a decidedly global health focus with a particular interest in bringing thewireless health stakeholders to developing markets. Aylward told MobiHealthNews in an inter-view that no group has managed to scale mHealth services—not in developed or developingmarkets. There havent even been large trials yet. Most of what is out there are small, non-sustainable proofs of concept. The mHealth Alliance aims to support and facilitate the integra-tion of services so that rather than having a series of point services these services will becomeintegrated and part of the healthcare system already in existence in that market.Integrating those services is just one mission of the Alliance. Integrating those kinds of servicesinto underlying healthcare systems, e-health to use the short language, is a second. Gettingsustainable economics under both of those is a third. Researching and showing the health andeconomic effect of doing that is a fourth. Underneath those there are more procedural activities,support activities like communications and connecting people together to technology initiatives.The mHealth Alliance recently announced a partnership with the Vodafone Americas Foundationto create an mHealth Alliance Award for the developer of an innovative wireless technology withthe most potential to address critical health challenges, especially in developing regions. Theprize for the award includes cash and benefits totaling $50,000 and guidance from the Allianceabout developing the application. State of the Industry Page 17
  • Reimbursement Rises and Falls“You are not going to get paid for cool ideas,” IntelliDOT CEO and founder of CardioNet JamesSweeney told a group of wireless health entrepreneurs at the Wireless Life Sciences Allianceevent this past spring. “You are not going to get paid for saving lives. You are not going to get paidfor anything unless you can prove that you can save them money.... In the world we’re movinginto, more than ever, if you can’t justify the cost benefits, then you will fail,” Sweeney said. “In myview, getting the FDA’s approval is not nearly as hard as getting the CPTs and insurance reim-bursement approvals.”CardioNet, the wireless remote patient monitoring company that Sweeney founded is perhapsthe poster child for the first generation of wireless health companies. The company has thedistinction of being the only pure-play wireless health company to have offered an initial publicoffering and one of the few to acquire reimbursement from the Centers for Medicaid & MedicareServices (CMS). At the very end of 2008, CardioNet secured a CPT that enabled it to collect$1,123.07 for its Mobile Cardiovascular Telemetry Service.After months of rumors that Highmark CMS planned to reduce its reimbursement rate for Cari-doNet and other MCOT services, the payer did. In July CardioNet announced that HighmarkMedicare Services planned to slash its reimbursement rate for MCOT services to $754 perservice, effective September 1, 2009. Highmark CMS gave no explanation for the cut other thanthat it believed it was the true value of the service.CardioNets reimbursement dip sent the companys stock tumbling and forced it to announceplans to cut back on operational costs to sustain its business.Analyst firm Frost & Sullivan sees a bright future for remote patient monitoring, but the key forthe industry is reimbursement: The market for remote patient monitoring is set to achievedouble digit growth in North America, according to the firm, so long as successful payment strat-egies are implemented. Last year the remote patient monitoring market made more than $98.2million, but the market could top $428.6 million by 2015. Frost points to direct reimbursementas one type of payment strategy that needs to mature for the market to grow at this rate:“At present, it seems very unlikely that any significant progress will be made toward direct reim-bursement in the next two to five years,” Zachary Bujnoch, industry analyst, Frost & Sullivanstated in the firm’s release. “As a result, market participants are forced to seek alternativepayment strategies, and while some of these have proved successful, the huge billion dollarmarket potential this space possesses is unlikely to be reached without some form of direct reim-bursement.”Two to five years before significant progress is made toward direct reimbursement? If Frost iscorrect, then more wireless health start-ups will pursue a direct-to-consumer model or anindirect to consumer model through their employers, who are financially motivated to keep theiremployees healthy and working. State of the Industry Page 18
  • Reimbursement Rises and FallsSome online health services began to see some progress on the reimbursement front this pastyear: New York-based MPV Health Care plans to reimburse for more than 22,0000 physicianswho use McKesson subsidiary RelayHealth’s webVisit consultations with their patients.Mobile health companies, however, remain frustrated by CMS. Chronic disease managementservice provider BeWell Mobiles Vice President and General Manager Greg Seiler believes thatCMS should help wireless health companies better understand the reimbursement eligibilityprocess:“It’d help to have clear support and guidance coming from Washington for how to enter the CMSsystem and get reimbursed for technologies that work,” Seiler told attendees of the Wireless inHealthcare IT event held at a Senate office building this past March. “What are the metrics fordemonstrating the technology works? How can we get them reimbursed? [Answers to thesequestions could help mHealth move forward] and help to mitigate some of the risks that wewould otherwise enjoy taking on.”Even devices that are much cheaper than the ones CMS reimburses for currently have troublegetting an audience with the payer. The New York Times published a feature entitled InsurersShun Multitasking Speech Devices, this past September, that focused on a patient with A.L.S.Since the muscles around her mouth and throat no longer allowed her to speak, she used an$8,000 computer that Medicare approved with software that turns typed words into speech. Inthis patients case, however, a much cheaper ($190) iPhone app called Proloquo2Go served herneeds better as a person living a mobile life. Payers do not seem to be interested in taking advan-tage of consumer devices cheaper price points, which could, ultimately help curb healthcareexpenditures.CMS, however, has yet to answer Seiler, Proloquo2Go and the rest of the industrys calls for aseat at the table. Its a conversation that is not taking place, and if Frost & Sullivan is right, it maynot for a few more years. Until then, wireless health companies need to keep pounding on CMSdoor, while proving their products efficacy and perhaps eyeing a different go to market strategyin the meantime. State of the Industry Page 19
  • Consumer Health: The Answer to "Who Pays?"There are currently 1.2 million people who use mobile fitness products to track their vital signswhile working out. It starts with fitness, but use cases for health and medical wireless healthservices are set to become increasingly popular. A recent ABI report found that 90 percent of thecurrent wearable wireless sensor market is dominated by the fitness industry. By 2014, themarket will swell to 400 million units, thanks in large part to growing use of sensors for health-care and medical uses.With resistance from payers and uncertainty about the stability of a business model dependenton their steady support, a number of wireless health service providers and device makers haveturned to direct to consumer as the best go-to-market strategy. Others never planned to becomea part of the healthcare system and focused on creating personal health devices with an eye onthe consumer market from the outset.During the course of the year a number of breakthroughs occurred for the wireless healthconsumer play: Best Buy invited wireless health startups to pitch it for shelf space and thenlaunched fitness sections in 40 of its stores across the US; App developers created thousands ofhealth, fitness and medical iPhone applications available for download directly from the App-Store; A myriad of personal health devices began selling their services direct to consumer viaonline stores like Amazon.Best Buy begins selling personal health devicesOne of the largest big box electronics stores took an interest in personal wireless health devicesthis past year: At the Microsoft Connected Health Conference in June, Best Buy teamed up withMicrosoft’s HealthVault team to invite device makers to pitch the electronics store’s executives ina private meeting at the event: “If you believe that your product or solution can wow health-conscious shoppers at the largest consumer electronics retailer in the United States, this is yourchance to make it happen,” stated the Microsoft-Best Buy invitation. The invitation alsoexplained that “outstanding solutions providers” would have the opportunity to discuss collabo-ration opportunities with Best Buy during a special dinner later this summer.A few months later Best Buy announced that 40 of its stores in the U.S. had begun offeringpersonal health solutions devices like pedometers, Bluetooth-enabled weight scales and bloodpressure monitors.“New technologies are emerging daily to help people plan, monitor, and enhance their healthand fitness activities,” Best Buy stated in its press release. “Yet finding the ways and the time tostay fit and motivated can seem more complicated than ever before. Starting today, Best Buycustomers in select markets from Washington, DC to Denver can turn to the nation’s largestconsumer electronics retailer for help in satisfying their health and fitness equipment and man-agement needs.” State of the Industry Page 20
  • Consumer Health: The Answer to "Who Pays?"iPhone demonstrates consumer demand for mobile health”Now here’s a class [of services] that we think will be really interesting: medical devices,” AppleSVP of iPhone Software Scott Forstall announced at the sneak peek event for iPhone 3.0. duringthe summer. Forstall then explained that the new iPhone OS will allow application developers tosync medical devices like blood pressure monitors or blood glucose monitors via both Bluetoothand USB. “So imagine the possibilities,” Forstall continued. “We think this is profound.” Forstallthen invited a representative from Johnson & Johnson subsidiary Lifescan who demonstrated aconcept iPhone app that interfaced with a connected blood glucose meter device.Since the iPhone 3.0 event in June, medical device makers and chronic disease managementservice providers have all been forging mobile strategies.iTMP is one startup that was early to market with a peripheral device for the iPhone: SM HeartLink, is a “wireless bridge” that can collect data from wireless sensors like heart rate chest strapsor cycling sensors on bikes and send them to an iPhone for display and tracking. Wireless remotemonitoring company MedApps looks to be integrating its system with smartphones, includingthe iPhone perhaps as soon as next year. Most wireless sensor startups, including Corventis,Sotera Wireless and Proteus Biomedical have all indicated that their sensors would interface withan application on the iPhone. Those startups are not pursuing a consumer health market strategyinitially, but many expect them to create cheaper, consumer versions of their sensors in thefuture.Of course, the market for peripheral medical devices that interface with the iPhone could be abig market opportunity, however, the real success story for the wireless health services viamobile phones in the past year has been the rise of health, fitness and medical applicationsthemselves. No other smartphone app store comes close to iPhones thousands of health-related apps. From symptom navigators to chronic disease management tools; from medicalreference guides to remote monitoring applications; from medication adherence apps to sooth-ing relaxation applications. Chances are if you have thought of a potential health-related applica-tion, theres a version of it already in the iPhone App Store.BlackBerry has also begun ramping up its health-related applications in its App World store andthey include a wide variety of applications – many of them also offered for iPhone. BlackBerry,however, only offers a few hundred health apps compared to the thousands available foriPhones.Examples of other wireless personal health devices in the marketZeo Personal Sleep Coach - The Zeo headband uses the startups patent-pending SoftWavesensor technology to accurately and safely measure the users unique sleep patterns through theelectrical signals produced by the brain. Zeo records those signals and can track which level ofsleep the user is in and for how long based on the data. That data is then transmitted to the Zeo State of the Industry Page 21
  • Consumer Health: The Answer to "Who Pays?"alarm clock, which acts as a gateway to send the data to Zeos server where users can log-in andreview their sleep habits. Zeo is available via Amazon.com or directly from the companys web-site.GlowCap – Vitalitys GlowCap is a smart pillbox cap that can fit the average pillbox. GlowCapglows different colors when users forget to take their medication – it uses an accelerometer todetermine when the pillbox is opened and makes a time stamp. The GlowCap can also alert care-givers when a person forgets to take their medication and can even call the pharmacy to get arefill. GlowCap is currently available via Amazon.com but the company does not believe direct toconsumer will be its most successful distribution channel. Vitality hopes to get pharmaceuticalcompanies or others to subsidize GlowCap for patients use. AT&T recently announced that itwould provide cellular connectivity for the product.Fitbit – This personal fitness device is currently sold out and on backorder, according to the com-pany. Fitbit tracks calories burned, steps taken, distance traveled and sleep quality by using anaccelerometer. Fitbit tracks its users motion in three dimensions and converts this data intousable information about daily into useful information about your daily activities. Fitbit uses awireless base station that is positioned in the home – whenever a user walks near the basesta-tion the data is uploaded to Fitbit.com where users can analyze their personal health data. Fitbitis sold through the companys website but it is currently out of stock and not filling new ordersuntil January 31, 2010.Philips DirectLife – Philips activity monitor DirectLife measures body acceleration in three differ-ent directions and combines that information with the users age, gender, height and weight. Themeasurements are then converted to energy use, or calories burned. DirectLifes online programhelps users establish goals and encourages and motivates users to increase their goals to exercisemore in successive weeks. The device itself is tiny, smaller than a matchbox, and has no displayscreen. Instead it has a half dozen green LED lights that indicate to the user how close they are tomeeting their exercise goal for the day. The service is currently available from the DirectLife web-site. State of the Industry Page 22
  • Venture Capital 2009Wireless Health Venture Capital in 2009There were 15 venture capital investments announced during 2009 and 11 of them were forwireless remote patient monitoring start-ups. The remainder included a start-up working on aconverged platform for physician-patient communications, a smartphone app developer focusedon fitness games, a call-in physician consultation service, and a tablet-based patient check-indevice for physician offices. While there were few, this years investments cover a variety of wire-less health business models and offerings.In September MedMarket Diligence noted that investments and other financings in the medicaldevice sector topped $400 million in July and August. The $22 million round that wireless healthstart-up CardioMEMS secured, led the pack. MedMarket predicted another $400 million ininvestments in medtech for the month of September alone.By October venture capitalists focused on healthcare were hedging their bets based on the direc-tion US healthcare reform was heading: VCs like Psilos and Chrysalis looked to fund companiesthat help people stay healthier and manage chronic diseases, figuring this is one way the govern-ment will ultimately move to take costs out of healthcare.In November following the CTIA Wireless IT & Entertainment event in San Diego, where morethan two dozen wireless health start-ups demonstrated their solutions, wireless industry veterananalyst Chetan Sharma predicted a “lot of investment” would flow into the sector in the comingdays.One venture capital firm, Mohr Davidow Ventures (MDV), which invested in wireless sensorstart-up Corventis in the past, told MobiHealthNews that it was actively pursuing start-ups likeCorventis that collect clinically-actionable data for point-of-care. MDV was chiefly interested incompanies at the 510K level of FDA regulation. Products that require long, multi-year clinicaltrials before getting an FDA regulatory decision were not of interest. For the most part, the list ofventure capital deals in the chart on the next page follow that trend. State of the Industry Page 23
  • Venture Capital 2009 DateCompany Amount Location Announced Investors Company Description Arcapita Ventures, Boston Developer of implantable wireless sensors that Millennium, Foundation track cardiac output, blood pressure and heartCardioMEMS $22.1 million Atlanta, GA 08/26/09 Medical rate (more) Lead Investor: InterWest Partners; Also: Kleiner PerkinsAutonomic Cau eld & Byers, The Developer of implantable devices that aim toTechnologies $20 million Menlo Park, CA 05/08/09 Cleveland Clinic soothe severe headaches (more) Lead Investor: BlueCross BlueShield Venture Partners; Also: Polaris Venture Partners, Developer of an automatic patient check-in HLM Venture Partners and device and service that aims to improve patient-Phreesia $11.6 million New York, NY 02/20/09 Long River Ventures provider relationship (more) Lead Investor: Seventure Partners; Also: ePlanet, Developer of wireless monitoring devices, Enterprise Ireland, and including a motion sensor that detects heart rateBiancaMed $9.8 million Belfast, Ireland 07/20/09 ResMed and respiration (more) Lead Investor: HLM Venture National network of primary care physicians thatTelaDoc Partners; Also: Cardinal diagnose illness, recommend treatment, andMedical Services $9 million Dallas, TX 12/04/09 Partners, Trident Capital prescribe medication over the phone (more) Developer of wireless remote monitoring systems Valhalla Partners, .406 that track the daily activities of cared forWellAware $7.5 million Charlottesville, VA 12/08/09 Ventures. individuals in the home (more) MycaHub combines an EMR, a comprehensive admin system, and the ability for doctors to BlueCross BlueShield Venture communicate with their patients via a variety ofMyca Health $5 million San Francisco, CA 10/06/09 Partners, Sandbox Industries. channels. (more) Investors include Cotswold Echo is developing a wireless blood glucoseEcho Therapeutics $3.6 million Franklin, MA 12/04/09 Foundation monitor for diabetics. BLs platform, TVx, gathers info from Bluetooth- based wireless medical devices at home andBL Healthcare $3 million Foxborough, MA 08/06/09 undisclosed displays it on the TV. Lead Investor: PUK Ventures; Also: Catapult Venture Developer of wireless technology for monitoring Managers, University of the health of expectant mothers and babiesMonica Healthcare $1.6 million Nottingham, UK 04/27/09 Nottingham (more) Carilion Biomedical Institute, Developer of medical applications for wirelessWireless Medcare $535K Roanoke, VA 12/11/09 Optimum Sensor Holdings and web-enabled devices (more) Developer of motion-detecting iPhone tness apps that include peer challenges to keep usersGymFu $160K Hampshire, UK 12/01/09 Lead Investor: Channel 4s 4iP motivatedeCardio Service provider of remote cardiac monitoring forDiagnostics undisclosed The Woodlands, TX 07/01/09 Sequoia Capital arrhythmia diagnosis (more) Developer of a personalized online tness New Venture Partners, coaching system and wireless monitoring deviceMiLife undisclosed Bedford, UK 01/16/09 Unilever Ventures (more) Developer of real-time physiological and biomechanical monitoring technology for defense, rst responder, training and researchZephyr Technology undisclosed Annapolis, MD 06/18/09 Motorola Ventures markets (more)Page 24
  • 2009 Wirelss Health DealsWireless Health Industry Deals in 2009During the course of 2009, MobiHealthNews chronicled 73 business deals between two or morecompanies or organizations active in the emerging industry. We defined a deal as an acquisition,pilot, program, joint venture, or product or service launch in conjunction with another company.“For many global firms, the fastest path to market leadership will be through acquisition,” Invest-ment firm TripleTrees research director Chris Hoffmann told MobiHealthNews. “This consolida-tion may not come in the same flurry as we’ve seen in enterprise software, but some thoughtfulstrategic deals will begin to occur. Because many of the questions surrounding mHealth andWireless Health solutions center on ‘who pays for them’, early M&A activity may be focused onthose solutions demonstrating recurring revenue growth or meaningful end user (or patient)retention.”The 73 deals summarized here could serve as a timeline for wireless health activity in the pastyear. The deals are ordered chronologically, beginning with AllOne Healths massive pilot withthe U.S. Army, which licensed AllOne Mobile for more than 10,000 wounded warriors managingtraumatic brain injuries. The charts on the following pages are testament to the work accom-plished this year by wireless health companies, and it points to many more deals in 2010.Page 25
  • Q1 Wirelss Health Deals DateCompany A Company B, etc. What was the deal? Announced Other details? Army to pilot AllOne Mobile to stay in Army licensed the technology for 10,000 touch with “wounded warriors” soldiers, speci cally those with traumaticU.S. Army AllOne Health, Diversinet through their mobiles. (more) 01/14/09 brain injuries. The Mobile Viewer allows users to view but not edit pro le information as well as Anvita developed a mobile viewer of current prescriptions, existing healthGoogle Anvita Mobile Google Health for Android. (more) 02/05/09 conditions, known allergies and more. KP worked with Mobilestorm for the pilot, Completed a pilot for text message which showed 0.73 fewer “no shows.”Kaiser Permanente Mobilestorm appointment reminders. (more) 02/05/09 National rollout to follow. As part of the announcement, IBM said it IBM and Continua to create had integrated its Information guidelines for wireless medical Management, Business Intelligence and Continua Health Alliance, devices to connect to Google Health. WebSphere Premises Server sensor eventIBM Google (more) 02/12/09 platform into Google Health already. Companies formed, ng Connect, a group for vendors looking to create The group will focus on ve key areas, one Motorola, HP, Samsung, next-gen wireless devices with Alca- being: enterprise collaboration and e-Alcatel-Lucent others Lu. (more) 02/16/09 health. The Foundations teamed up with the The mHealth Alliance aims to bring Rockefeller Foundation to create the together the major mHealth stakeholdersVodafone Foundation UN Foundation mHealth Alliance. (more) 02/17/09 for the developing world. MobilizeMRS taps FrontlineSMS platform for its work in global health. MobilizeMRS rebranded toMobilizeMRS FrontlineSMS (more) 02/24/09 FrontlineSMS:Medic following the deal. Ohio Health pilots the smart Ohio Health expects iShoe to hit theOhio Health iShoe innersole for fall prevention. (more) 02/26/09 market in 2010 with a pricepoint of $100. Edge Health to embed Allscripts EMR Allscripts launched its own iPhone app aAllscripts Edge Health into its iPhone app, EdgeRPM. (more) 03/04/09 few weeks later. Clickatell enables text messaging for AllOne Healths users in the Army look toAllOne Health Clickatell AllOne Mobile. (more) 03/11/09 be the rst to bene t. Signi ca Insurance Group The health plans members can view, and Erin Group manage and exchange their health The deals made AllOne Mobile available toAllOne Health Administrators info with their providers. (more) 03/16/09 more than 400,000 people total. Rady Childrens pilots GIs Pillcam, a Joshua Devine, a high school sophomore, tiny wireless camera inside a pill. swallowed the Pillcam at Gradys – one ofRady Childrens Hospital Given Imaging (more) 03/17/09 the rst patients to do so. Telstra Foundation funded a two year Murdoch Childrens mobile project for mental health The grant was for $285,000 AustralianTelstra Foundation Research Institute services. (more) 03/25/09 dollars. Microsoft to allow personal health devices to connect to HealthVault via ANT+ is an alternative short range wirelessMicrosoft ANT Wireless ANT+. (more) 03/25/09 technology to ZigBee or Bluetooth. Qualcomms Don Jones and Scripps Dr.Gary and Mary West Qualcomm, Scripps GMWF donated $45M to create the Eric Topol join as part of the InstitutesFoundation Health West Wireless Health Institute. (more) 03/30/09 founding board.Page 26
  • Q2 Wirelss Health Deals DateCompany A Company B, etc. What was the deal? Announced Other details? Verizon Wireless launches 4G innovation center with Alcatel-Lucent The center will focus on three key verticals:Verizon Wireless Alcatel-Lucent, Ericsson and Ericsson. (more) 04/01/09 healthcare, utility and security. Intel and GE announce partnership for home health monitoring and GE will market Intels Health Guide as part contribute $250 million to R&D. of the deal, which also focuses on wirelessIntel General Electric (GE) (more) 04/02/09 sensors for the senior care market. CardioNet agrees to buy Biotel andCardioNet Biotel enter clinical research. (more) 04/02/09 The deal eventually falls through. Jitterbug pilots a medication adherence service from Meridian and The services could become part of a diabetes management service from Jitterbugs Service Store – its version of anGreatCall / Jitterbug Meridian Health, WellDoc WellDoc. (more) 04/03/09 App Store. RPM company MedApps connects MedApps currently uses a dedicated devices data streams to Microsofts wireless device to route data fromMedApps Microsoft HealthVault. (more) 04/12/09 connected medical devices. Proteus announces two drug companies will trial its “intelligent Later in the year, Novartis announces a trial Two undisclosed pharma medicine” technology and sensor. with Proteus – unclear if its a separateProteus Biomedical companies (more) 04/14/09 deal. A.D.A.M. announces Medzio, a Medzio continues to add a few new collaborative mobile app suite from partners throughout the year, but the HelloHealth, Norton, the newly formed Mobile Health apps sum does not appear to be moreA.D.A.M. LiveStrong, others Network. (more) 04/21/09 popular than its parts. Doylestown Hospital becomes rst hospital pro led on Apples site for equipping its care workers with The hospital connected the iPhones to iPhones throughout its facility. their Meditech EMR system and alsoDoylestown Hospital Apple (more) 04/30/09 noticed doctors favor Epocrates. The three companies teamed up to The collaboration results in AT&Ts “smart Texas Instruments, work on smart innersoles for fall slippers” for fall prevention, unveiled inAT&T 24Eight prevention. (more) 05/26/09 December. Senior phone service provider Jitterbug worked with phone maker Samsung on its new Jitterbug J phone and Qualcomm to create a more “seamless” data connectivity for Jitterbug added 1xCDMA data to its users. The phone and data phones but it didnt want the users to connectivity enable the companys know they had Internet-enabled phones –Jitterbug Samsung, Qualcomm Services Store. (more) 06/02/09 perhaps too daunting. Remote cardiac monitoring company LifeWatch signed an exclusive agreement with Verizon to use its network to carry its wireless healthVerizon Wireless LifeWatch services. (more) 06/04/09 LifeWatch is a big competitor to CardioNet. The White House is working with a number of industry partners to launch a free text messaging service, Text4Baby originally aimed to launch in Voxiva, CDC, J&J, CTIA, called Text4Baby, for low-income September but has since been delayedWhite House more expectant mothers. (more) 06/05/09 until next year. Interoperability consortium Continua certi ed Nonins Bluetooth-enabled This marks the rst wireless health deviceContinua Health Alliance Nonin pulse oximeter. (more) 06/09/09 with Continua certi cation. Partners Healthcare in Boston spun out a start-up, named Connected Health for now, with an initial service Connected Health just completed a pilot around a wireless blood pressure cu . with EMC, which used the cu forPartners Healthcare Connected Health (more) 06/16/09 corporate wellness programs. The Institute announced plans to conduct clinical trials for Corventis Dr. Eric Topol and other Institute directorsWest Wireless Health and shepherd the sensor to market. demo Corventis monitoring sensor atInstitute Corventis (more) 06/23/09 events all year long.Page 27
  • Q3 Wirelss Health Deals DateCompany A Company B, etc. What was the deal? Announced Other details? Roche inked a deal with diabetes app developer MYLEstone Health to include some of Roches diabetes MYLEstone saw the deal as a baby step for management software into the the industry and was fed up with hype companys Glucose Buddy around meter integration intoRoche Diagnostics MYLEstone Health application. (more) 07/01/09 smartphones. Evangelical Lutheran WellAware to out t the outpatient Good Samaritan Society, centers with wireless sensors for WellAware only launched a few weeksWellAware Hastin senior care. (more) 07/01/09 before the announcement. Centura Health signed on as the rst sponsored listing in Healthagens iTriage smartphone application. Healthagens iTriage helps users determineHealthagen / iTriage Centura Health (more) 07/08/09 wait times at hospitals. Highmark CMS slashed CardioNets reimbursement rate by one third. The move followed months of rumors andHighmark CMS CardioNet (more) 07/13/09 sent the companys stock plummeting. Modavox bought Augme Mobile, a Augme Mobile Health is the start-ups mobile marketing company for an wireless health focused marketing arm.Modavox Augme Mobile undisclosed sum. (more) 07/15/09 Quickly becomes a focus at Modavox. Bayer created “Didget” a blood glucose meter that plugs into Nintendo DS portable game system. The peripheral could spark a healthyBayer Healthcare Nintendo (more) 07/16/09 games movement. CallMD joins A.D.A.M.s Medzio CallMD will license A.D.A.M. SymptomCallMD A.D.A.M. Mobile Health Network. (more) 07/17/09 navigator content, too. The pilot involves getting physicians The pilot became public after the VADepartment of Veterans access to patient data while they are announced it would tighten the belt onA airs mVisum on their way to the bedside. (more) 07/21/09 pilot spending. Digital sales and health marketing company Physicians Interactive (PI) acquired mobile medical content Skyscape has long created mobile publisher Skyscape for an applications for healthcare workers datingSkyscape Physicians Interactive undisclosed sum. (more) 07/27/09 back to PDAs. Verizon Wireless and Qualcomm form a joint venture called nPhase to manage machine-to-machine services, including many wireless nPhase also took over managingVerizon Wireless Qualcomm health o erings. 07/28/09 CardioNets service as part of the deal. Patient at the hospital is rst to receive wireless-enabled, remote The pacemaker connects to the server atSt. Francis Hospital St. Jude Medical monitoring pace maker. (more) 08/10/09 least once a day to make reports.Page 28
  • Q3 Wirelss Health Deals Continued DateCompany A Company B, etc. What was the deal? Announced Other details? The store chain teamed up with Microsoft to invite wireless health Best Buy launched tness sections at its device makers to pitch it to carry their stores with some connected healthBest Buy Microsoft products. (more) 08/20/09 products a few months later. Verizon Wireless certi ed Panasonics The H1 was speci cally designed for Toughbook H1 to run on its network. clinicians and based on extensive researchVerizon Wireless Panasonic (more) 08/27/09 conducted by Intel and Panasonic. Jitterbug switched over to Verizon Jitterbug also announced it was nowVerizon Wireless GreatCall / Jitterbug Wireless network from Sprint. (more) 08/27/09 pro table. Harvard Pilgrim will pilot Chronic kidney disease a ects about 26Harvard Pilgrim Health MedMinders wireless-enabled PillBox million people and has no cure, but it canCare MedMinder for CKD patients. (more) 08/31/09 be managed. The carrier is working with the M2M company to accelerate time to market for healthcare services and According to one estimate: 430 millionSprint DataSmart connected devices. (more) 09/03/09 M2M devices will ship in 2013 Halos myHalo wireless monitoring myHalo wirelessly transmits secure vital o ering now synchs to Microsoft signs, activities of daily living, and criticalHalo Monitoring Microsoft HealthVault. (more) 09/09/09 event info. Novartis has tapped Proteus for a small, 20 patient study to track compliance with a blood pressure Novartis told reporters (inexplicably) thatNovartis Proteus Biomedical drug regimen. (more) 09/22/09 the deal could become exclusive. GE and Sprint installed a converged wireless network at the companys six Methodist may hire more nurses thanks toMethodist Healthcare GE, Sprint hospitals. (more) 09/23/09 the savings from the network, reportedly. AirStrip inked a purchasing Premier Healthcare agreement with the alliance, which AirStrip had more than 100 customers atAirStrip Alliance has 2,200 hospital members. (more) 09/29/09 the time. EosHealth, StratREF, DeviceAnywhere tests the wireless DA noted an uptick in wireless healthDeviceAnywhere Sensei health services for QoS. (more) 09/30/09 services looking to test QoS in 2009.Page 29
  • Q4 Wirelss Health Deals DateCompany A Company B, etc. What was the deal? Announced Other details? Keas is a care program store – care Former Google Health head launches professionals design care plans forKeas Microsoft, Google, others online health site Keas. (more) 10/06/09 consumers to buy. VZW o ers home health care workers application called OnCare, which wasVerizon Wireless Xora created by Xora. (more) 10/08/09 The app costs about $35 a month. Voaltes iPhone-enabled voice, alarm,Sarasota Memorial text service is piloted at Sarasota Voalte becomes a hit with nurses there,Hospital Voalte Memorial Hospital. (more) 10/08/09 looks to move to other wards. AT&T will provide connectivity for GlowCaps light up when a patient needs to Vitalitys GlowCaps medication take medication, send texts and can evenAT&T Vitality adherence device. (more) 10/09/09 call the pharmacy for re lls. USC develops an iPhone game called BeatingHeart, that demonstrates While just a concept app, it could point to Corventis wireless sensor capabilities. opportunities for health games withCorventis USC (more) 10/14/09 sensors. Apple teams up with Epic Systems to integrate iPhones into Epics EMR o ering at Stanford Hospital andApple Epic Systems Clinics. (more) 10/14/09 Expect a full product launch in early 2010. Cinterion powers connectivity for Diabetechs 4th generation wirelessCinterion Wireless diabetes management platform, Diabetes is a key condition targeted byModules Diabetech GlucoMON. (more) 10/15/09 many wireless health start-ups. USC and Boston Scienti c created a demo iPhone app for BSs Latitude Latitude enables physicians to monitorBoston Scienti c USC application. (more) 10/23/09 implanted devices. The two companies create a smartphone speci cally for hospital workers called the Vocera Arkansas Childrens Hospital was a betaMotorola Vocera Smartphone. (more) 10/27/09 user for the device. AllOne Mobile will be packaged with health info on a USB drive company, Connectyxs MediFlash o ering. The deal puts AOM in Walgreens, HarrisAllOne Health Connectyx (more) 11/02/09 Teeter, Krogers and other retail locations. London-based St. Marys Hospital will trial Toumazs wireless sensor for vital The bandaid-like sensor monitors skinSt. Marys Hospital Toumaz Holdings sign monitoring. (more) 11/02/09 temperature, heart rate and respiration.Page 30
  • Q4 Wirelss Health Deals Continued DateCompany A Company B, etc. What was the deal? Announced Other details? Roche will pilot NeurVigils iBrain wireless sensors for clinical trials NeuroVigils iBrain captures the usersRoche Diagnostics NeuroVigil involving CNS disorders. (more) 11/02/09 brains EEG signals wirelessly. Jitterbug acquired mobile personal emergency response service (MPERS) Jitterbug plans to integrate the MPERS into start-up MobiWatch for an its phones for now – no externalGreatCall / Jitterbug MobiWatch undisclosed sum. (more) 11/04/09 medallion. Mount Sinai tested CareSpeaks text messaging adherence program for teenage liver transplant patients. The program remarkably reduced rejectionMount Sinai Hospital CareSpeak (more) 11/05/09 episodes for the patients. Mayo and STM are collaborating on a wireless cardiac monitoring service. The system will monitor heart rate,Mayo Clinic STMicroelectronics (more) 11/05/09 breathing rate, and physical activity. GSMA and the university plan to establish a wireless health innovationGSM Association University of Manchester center in Manchester. (more) 11/11/09 It will have a UK-focus in the beginning. Research In Motion has brought MedAptus, a charge capture o eringResearch In Motion / for physicians, to its BlackBerry MedAptus brought three versions of itsBlackBerry MedAptus devices. (more) 11/19/09 o ering to BlackBerry. Remote wound care service WTN inked a two year agreement with WTN uses wireless networks to access AT&T for connectivity. It also inked a patient records, review visuals and more. Wound Technology deal with HTC to use the Fuze WTN used to work through VerizonAT&T, HTC Network smartphone. (more) 11/23/09 Wireless. Intel announced a number of Indiana- based customers for its Intel Health VA, Memorial Hospital & Guide device for the home health The Health Guide added wirelessIntel Health System, others market. (more) 11/24/09 connectivity this year.Johns Hopkins School of Intel is piloting its Intel Health Guide The devices will run on Clearwires newNursing Intel, Clearwire at JH School of Nursing. (more) 11/30/09 WiMAX network in Baltimore. GE bought LIG for an undisclosed amount. LIGs o ering QuietCare uses infrared sensors to remotely monitor Living Independently patients in senior care facilities. GE owned a minority stake in LIG prior toGE Group (more) 12/02/09 the acquisition. Novartis is working with IBM and Vodafone to bring SMS For Life The service aims to improve availability ofNovartis IBM, Vodafone campaign to Tanzania. (more) 12/14/09 anti-malarial drugs in remote areas.Page 31
  • A Step-By-Step How-to for Wireless Health RegulationFDA may regulate certain mobile phones, accessoriesBy Bradley Merrill Thompson, Partner, Epstein Becker & Green, P.C.It can come as a bit of a shock to people in the consumer electronics, IT and telecommunicationsindustries that FDA might regulate certain equipment like cell phones that companies are plan-ning to put at the center of connected health services. My goal is to outline the factors that FDAconsiders when deciding whether to regulate such equipment.Defining a medical deviceThe natural place to start is with the definition of a medical device. Since it is so central to theanalysis, I’m going to quote the statute verbatim. Section 201(h) of the Federal Food, Drug, andCosmetic Act defines a medical device as:“… an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, orother similar or related article, including any component, part, or accessory, which is … [either]intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treat-ment, or prevention of disease, in man or other animals … [or] intended to affect the structureor any function of the body of man or other animals.”So at a high-level, we look for two things: (1) a device with (2) a medical intended use. The firstprong of the test — that there must be an actual product — means FDA doesn’t regulate, forexample, medical procedures. The thing in question must be a thing, and not information orsomething else intangible. Software can be a medical device if it’s written on computer media, asopposed to printed on paper. The media with the code written on it is enough of a “thing” forFDA to regulate.Continued Online: http://mobihealthnews.com/3177/fda-may-regulate-certain-mobile-phones-accessories/Step-by-step: FDA wireless health regulationIn contrast to components that are simply sold to another manufacturer, standalone medicaldevices and accessories sold to end users may require some form of premarket clearance orapproval. Once you know you have an FDA-regulated device or accessory, here’s how you figurethat out, following a five-step process.Step one. Figure out the most appropriate classification for your product.There is a bit of both art and science to this. FDA has published about 1700 classification regula-tions. Each of those regulations has a description or “identification” of the types of devices State of the Industry Page 32
  • A Step-By-Step How-to for Wireless Health Regulationcovered by that regulation. FDA has a searchable database of these regulations accessiblethrough their website.Some articles of hardware and software are so important that FDA has separately classifiedthem, and you can find them directly through searching. The regulations are organized by clinicalapplication so all of the orthopedic devices, for example, are in one part of the regulations. Soyou might get lucky and find one that directly describes your product. A quick search of the regu-lations revealed that the word “computer” appears in 225 regulations, “software” in 431 and“network” in 43. There is, for example, a classification for remote medication managementsystems in 21 CFR 880.6315.But if you can’t find one that directly describes your product, perhaps it’s because FDA considersyour product to be merely an accessory to a “parent” device. I’ll give you an example. Last monthFDA cleared an updated version of the Polytel glucose meter accessory, which is a small modulethat plugs into the port of a glucose meter, receives data from the meter and transfers it wire-lessly to an Internet capable communication device like a cell phone or an APT. In clearing thedevice, FDA agreed with its classification in 21 CFR 862.1345, which covers all glucose testsystems, including the “parent” glucose meters.Step two. Read the second half of the classification regulation to see how FDA regulates thatparticular article.FDA will assign each product into one of three classifications, cleverly called class I, II and III. ClassI devices represent the least risk, while class III represent the greatest. Associated with thoseclassifications are specific regulatory requirements. Many class I devices will be exempt frompremarket clearance, and some products will be exempt from other regulatory requirementsthat I’ll describe in a minute. Some class I and most class II devices require filing a premarket noti-fication (or 510(k)) with FDA. These submissions are manageable documents that compare thenew device to those lawfully on the market. The specific data requirements are discuss below.The highest risk devices-class III-usually require premarket approval (PMA) from FDA, which cancost millions. Most IT devices can avoid that, unless they are an accessory to a high risk device. Ifyour device is classified as an accessory, it is subject to all of the regulatory requirements appli-cable to the parent device.Step three. Research the requirements.FDA has published scads of guidance documents on its website that cover many different aspectsof the technologies they regulate. There are guidance documents on using wireless technologies,off-the-shelf software, and specific medical technologies such as blood glucose meters. It’simportant you find all of these so-called “special controls” because you’ll need to make sure thatyour product complies with those technical standards. State of the Industry Page 33
  • A Step-By-Step How-to for Wireless Health RegulationSteps Four and Five Continued Online: http://mobihealthnews.com/4050/step-by-step-fda-wireless-health-regulation/How to get FDA to clear a mobile health appIt’s important to remember that medical devices, including software, can be divided into threecategories: (1) standalone devices, (2) accessories and (3) components. Standalone are thosedevices that are intended to directly provide the diagnostic or treatment, while accessories aresold directly to end-users and work with standalone devices. Components, in contrast, arepurchased by manufacturers of standalone or accessory devices for incorporation before sale.Mobile device (e.g. cell phone apps) can be an accessory, as opposed to a component, if they aresold or even given directly to the end-user: the patient. They can also be standalone if they donot connect physically or virtually to any device other than the mobile device platform.Understanding that is important because determines the regulatory requirements that apply. Ifthe app is designed, for example, to facilitate the downloading of information from a bloodglucose meter, the app and maybe even the software environment are accessories and will beregulated in the same manner as the blood glucose meter. The classification and most of therequirements for the submission to FDA will be dictated by how the parent standalone device isregulated. So, the Airstrip OB app is regulated as part of a perinatal monitoring system generally,just as the sensors and other hardware that gather the information.Some apps will not be simply enablers of transmitting data from a medical device, but will actu-ally serve a standalone purpose. From the prior two articles, remember that it’s the claims thesoftware developer/seller choose to make, within reason, that triggers FDA regulation in the firstplace, and the degree of that regulation when it comes to obtaining clearance.Continued Online: http://mobihealthnews.com/5626/how-to-get-fda-to-clear-a-mobile-health-app/ State of the Industry Page 34
  • The Year inThe Year in Conclusion ConclusionWhile this report could not discuss every deal or development in wireless health this past year, itshould serve as a reference point for the year ahead as well as a snapshot of an industry in itsinfancy. Next year will bring substantial revenue growth for the industry, increased capital invest-ment, a number of strategic acquisitions and little progress on reimbursement from payers.Many wireless carriers only recently established dedicated healthcare business units, which maybegin to launch products by the end of next year. Some of the newly founded institutes areworking to fill leadership, while others were only founded a few weeks ago. Care provider groupsare largely experimenting with pilots and looking for signs of efficacy from budding wirelesshealth services. Direct to consumer health products are mostly only available via online stores,but the big box electronics stores are beginning to take notice.These are still early days, but they are busy ones. State of the Industry Page 35