Keynote by Michael Berman, Former President at Boston Scientific and Healthcare IT entrepreneur and innvestor, about US digital healthcare investment trends and opportunities for the mHealth Israel meetup community

1. Mhealth Israel Meet Up
Tel Aviv
Michael Berman
November 10, 2014
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My Background
 MBA Cornell 1986
 Scimed 1986-94
– Head of Marketing
 Boston Scientific Cardio-Vascular 1995-2000
– President
– $1.4B in Revenue in 1999
 Entrepreneur/Investor 2000-Present
– Co-Founder 8 Start Up Medical Device Companies
– Outside Director and Investor in 5 Companies
– Currently on 11 Medical Device Company Boards and Venture Partner with
RiverVest Ventures
– Collectively have raised $500 Million
• Mainly VC Investors
• 2 Angel Deals
– $550 Million in Exits. 11 Companies still in Process.

3. We have come a long way
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4. We have come a long way
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5. Decline in Deaths from Cardiovascular Disease in
Relation to Scientific Advances.
Nabel EG, Braunwald E. N Engl J Med 2012;366:54-63.

6. What will continue to drive this curve
downward?
 Drugs
 Devices
 Better Delivery of Care (Improved Systems)
 Preventive Care
 Lifestyle Improvements
 Better use of sensors and data to improve all of
the above
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7. Behavior Drives Health. Huh?
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NEJM, Sept, 20, 2007, 357:12

8. Ahaaaa….!
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NEJM, Sept, 20, 2007, 357:12

9. HealthCare IT
 Can Better Use of Sensors, Systems and Data:
– Improve healthcare outcomes?
– Improve patient experience?
– Better leverage current healthcare infrastructure; Improve
efficiency?
– Reduce overall costs?
– Reduce costs of particular patient interactions?
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11. HealthCare IT
 Will these products/services be Medical or
Consumer?
 Utilized by hospitals, doctors, patients, or
consumers?
 Will they need to prove better health outcomes or
“just” have satisfied customers?
Huge implications on product design, clinical trial
strategy, 3rd
party reimbursement, distribution
strategy, price point, exit strategy.
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12. Medicine in the Future
 Elias Zerhouni
– Personalized
– Predictive
– Participatory
– Pre-emptive
 Addendum
– Precision
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13. HealthCare IT
Who Will Pay?
 Payors
 Hospitals/Providers
 Patients
 Consumers
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14. FDA vs. Medicare
 FDA
– Safe and Effective
 Medicare
– Reasonable and Necessary
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1. The technology must have final approval from the appropriate
governmental regulatory bodies.
2. The scientific evidence must permit conclusions concerning the effect
of the technology on health outcomes.
The evidence should consist of well-designed and well-conducted investigations
published in peer-reviewed journals. The evidence should demonstrate that the
technology can measure or alter the physiological changes related to a disease,
injury, illness, or condition. In addition, there should be evidence or a convincing
argument based on established medical facts that such measurement or alteration
affects health outcomes.
Opinions and evaluations by national medical associations, consensus panels, or
other technology evaluation bodies are evaluated according to the scientific quality
of the supporting evidence and rationale.
3. The technology must improve the net health outcome.
4. The technology must be as beneficial as any established alternatives.
5. The improvement must be attainable outside the investigational
settings.
When used under the usual conditions of medical practice, the technology should be
reasonably expected to satisfy TEC criteria #3 and #4.
The Blue Cross and Blue Shield Health Technology Assessment
Established 1985

16. The New Reality--2014
 The Product Concept must be “Perfect” to get
fully funded by VC’s
– Big Market
– Proprietary
– Potential High Gross Margins
– Solve a big problem
– Low Technical Risk
– Acceptable Clinical Risk
– Low Financing Risk
– Low Regulatory Risk
– Low Reimbursement Risk
– Many Potential Acquirers
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17. Ideas
 Great Ideas are Sparked by Contact with Reality and a
Desire for Change
 “The reasonable man adapts himself to the world; the
unreasonable one persists in trying to adapt the world to
himself. Therefore, all progress depends on the
unreasonable man.”
– George Bernard Shaw
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18. Be Prepared to Find “Non-Traditional”
Sources of Financing
 Traditional
– Angel Investors
– Venture Capital
– USA Public Markets
 “Alternative” Sources
– Corporate Strategic Investors
– Int’l VC’s
– Asia
– Government Direct/Indirect Support
– International Public Markets
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Life Science VC Funds Raised

21. Factors Cited as Having the Highest Impact
on VC Investment
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22. Financing Risk
 Has become a Paramount Risk, if not THE
Paramount Risk, for most Emerging Companies
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23. Thank you
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