The third quarter of 2015 was another big one for digital health, with $689 million in funding raised by 49 different companies. Read ahead for an exhaustive recap of the quarter with links to MobiHealthNews coverage of notable events throughout. If you’d prefer to navigate to a particular section, here’s where you can find our digital health news round-up section for payor news, pharma news, government and regulatory news, mergers and acquisitions, funding announcements, and survey results, market data, and other industry metrics. Or read on below for our round-up of healthcare provider-focused digital health news.
Healthcare provider digital health news for Q3 2015
The quarter saw a fair about of digital healthcare provider news, mostly consisting of pilots, studies, and trials, including some using Apple's new ResearchKit app.
Patient-facing tools
This quarter, one big name provider, San Diego-based healthcare system Scripps Health, launched an app for patients. Given Scripps Health’s early involvement in digital health, it was almost surprising that the provider waited this long to launch an informational app for patients. The health system's eponymous app, available for iOS and Android devices, allows patients and visitors to find information about Scripps physicians, hospitals, and clinics.
Another provider, Kaiser Permanente, reported usage results for its patient-facing tools in its 2014 annual report. The company found that around 4.9 million members in Kaiser’s 9.6 million member network are using Kaiser’s online health management platform, called My Health Manager. In 2014, through Kaiser’s online and mobile health services, 37.4 million lab test results were viewed online, 20 million secure emails were sent, 4.1 million online appointment requests were made, and 17.5 million online prescriptions were refilled.
Pilots, studies, and trials
A number of providers also announced pilots, studies, and trials that involved digital health tools in the third quarter.
According to a ClinicalTrials.gov posting, Joslin Diabetes Center started a small trial to pilot test a mobile health app and an online nutrition education platform for people with Type 1 diabetes. The web platform will help educate patients about how to optimize their glucose and analyze their after-meal behavior. The app will facilitate data logging to help patients and caregivers track and explain variability in their glucose readings. The system is called “Sugar Sleuth”.
Another diabetes-related venture, this one from two American and two European companies, will aim to use near-field communication (NFC) technology to create new options for diabetes management. The Mayo Clinic and Washington, DC-based medical technology company Gentag formed the American half of the venture, while Dutch medical technology company NovioSense and German R&D firm Fraunhofer IMS will work on the problem in Europe. Both pairs of companies have collaborated in the past.
ClinicalTrails.gov also shed light on another digital health-focused trial. According to the posting, wellness app maker Noom will work with both the Icahn School of Medicine at Mount Sinai hospital in New York and Kaiser Permanente on a 12-week, 200-person trial of a new mobile health app for eating disorders called Noom Monitor.
Utah health system Intermountain Healthcare — and other, as yet unknown providers — started investigating AliveCor’s smartphone ECG device in a clinical context, to determine whether the iPhone version of the device is comparable with traditional 12-lead ECGs.
Beth Israel Deaconess Medical Center in Boston now has five years of data on what happens when patients have access to their doctor’s notes. And from that data, the provider found that not only is the arrangement beneficial to patients, but also to doctors — and to the accuracy and quality of the notes.
Meanwhile, two researchers at Massachusetts General Hospital developed a device that can return a cancer diagnosis in an hour, without an invasive biopsy, using a smartphone.
Apple ResearchKit news
There's also been a few announcements related to ResearchKit, Apple’s open source platform that helps researchers build medical apps and recruit patients for clinical trials.
Yale launched a study for people who have or may develop cardiomyopathy, a disease of the heart muscle, on ResearchKit. The iPhone-based study, called the Yale Cardiomyopathy Index, will offer participants self-assessments about their quality of life and heart-related symptoms.
The Icahn School of Medicine at Mount Sinai and LifeMap Solutions updated their asthma app, called Asthma Health, that they created for ResearchKit. With the new feature, called Doctor Dashboard, LifeMap will push the app beyond the realm of research and into clinical use.
Stanford expanded its ResearchKit-based heart health trial, run from the MyHeart Counts iPhone app, to Hong Kong and the United Kingdom. The app measures activity through the Apple Watch, which offers heart rate tracking through sensors in the iPhone or a third-party wearable activity device linked to Apple’s Health app.
And a report surfaced that Johns Hopkins University is preparing to launch the first Apple ResearchKit study to incorporate the Apple Watch as a data collection device. The study will be designed to help Johns Hopkins researchers learn more about epilepsy, according to the report.
Vendor moves
Some other consumer-focused companies also made news with providers in Q3.
Google Flu Trends, as a website open to the general public, shut down. The Google Flu Trends team will continue to track flu patterns based on search history, but it will now provide that data directly to public health researchers at Columbia University’s Mailman School of Public Health, Boston Children’s Hospital, and the Centers for Disease Control and Prevention (CDC) Influenza Division. Google Dengue Trends is also no longer publishing new data.
Qualcomm Life, the mobile technology company’s subsidiary focused on medical device connectivity, acquired Capsule Technologie, a France-based clinical data management company that currently serves 1,930 hospital clients in 38 countries, for an undisclosed amount. Until the acquisition, Qualcomm’s focus was on connecting the data from home healthcare devices back to the hospital. But with the acquisition of Capsule, the company will also move into the space of connecting devices within the hospital to the hospital’s EMR and IT systems.
Salesforce, maker of the well-known sales and customer support platform, announced that it was launching its first product designed specifically for the healthcare sector: Salesforce Health Cloud. The new offering will be a patient engagement and patient management offering designed to work alongside the EHR and other data sources.
Health insurance company digital health news for Q3 2015
News from payers was sparse this quarter, but some of the bigger health insurers made a few announcements. MobiHealthNews also published an in-depth that delved into the changing relationship of health plans and virtual visit services. This in depth included two partnerships announced in Q3 -- Blue Cross Blue Shield of Minnesota's with San Francisco-based Doctor on Demand and Capital BlueCross's with American Well.
UnitedHealthcare added new access options to its Health4Me app for Medicaid and CHIP beneficiaries in 17 states. Health4Me, which first launched three years ago for members of employee-sponsored health plans, helps users navigate their health plan.
Cigna made two announcements. The first was that Cigna Envoy, the insurance company’s app for American employees living abroad, added a mobile claims function that allows users to file a claim by taking a picture of a receipt. The functionality is mostly unnecessary for the domestic version of the app, MyCigna, because for those users claims are submitted by their provider.
Cigna also shared some data from a wearable device randomized control trial it conducted last year. Cigna found that 80 percent of people were more motivated to manage their health after using an activity tracker. The randomized control trial from March 2014 included 600 patients who are pre-diabetic and morbidly obese. The study lasted six months and used activity trackers from BodyMedia, which has since been acquired by Jawbone.
There were a few employee wellness partnerships as well.
Humana partnered with Kurbo Health, which offers a mobile-enabled program aimed at preventing childhood obesity, to give its employer customers the option to add a 12-month subscription of Kurbo Health as a wellness benefit for their employees. Before offering this option to employers, Humana conducted two internal pilots of the offering.
Fitbit’s Corporate Wellness arm officially became a HIPAA compliant platform and it announced Target as a new client, which will offer Fitbits to its 335,000 US employees. The company showed off a new software offering that will facilitate fitness competitions among employees in large, distributed companies.
In Teladoc's second quarter earnings call, the telemedicine company said it made $18.3 million in the second quarter. Subscription fees, paid to Teladoc by employee and health plan customers, made up about $15 million, while visit fees, paid by patients, made up just $3 million. Interestingly, while subscription fee revenue increased by 70 percent over last year, visit fee revenue jumped 127 percent — suggesting that not only the number of covered lives increased, but the number of visits per covered individual rose as well.
Global human resources company Mercer launched an employee wellness platform, called Health Pathfinder by Mercer, which is powered by Jiff. Clients will be able to integrate Health Pathfinder into their existing benefits programs and employers will be able to access Jiff’s offerings.
Health kiosk company higi examined data for 159,000 people with hypertension over nearly three years, from September 2012 to April 2015 and found that combining health tracking with incentives, rewards, and challenges can contribute to consumers’ lowered blood pressure.
Pharmaceutical company digital health news for Q3 2015
There wasn't much pharma news in the beginning of Q3, but as the quarter drew to a close, several announcements started to come out of major pharma companies. This quarter, AstraZeneca was particularly active in the digital health space and a few pharmaceutical companies made accelerator-related announcements.
Novartis
One of the few early pharma announcements came out of Novartis, which released a new Apple Watch and Android Wear app geared at helping visually-impaired people navigate their environment. The app is one of two Via Opta apps that have been available on the iPhone since August 2014, but a new upgrade adds additional features and brings Via Opta Nav onto a wearable for more convenient navigation.
A few months later, news broke about both connected contact lenses Google and Novartis are working together on: A new patent application shed light on how Google might power its glucose-sensing contact lens, just a week after Novartis told a Swiss newspaper it was on track for human trials in 2016 of an autofocus lens for presbyopia patients.
Roche
Roche Pharma Research and Early Development, a division of Roche Pharmaceuticals, developed a new mobile app to measure Parkinson’s disease symptoms. The app was developed in partnership with Max Little, a British mathematician at the head of the Parkinson’s Voice Initiative, and it will actually be used in a drug development trial with Prothena Biosciences.
Roche subsidiary Roche Pharma France, also partnered with French medical app company Voluntis to develop a mobile-based therapy for breast cancer. Voluntis makes companion apps as medical devices. It has so far focused on the areas of diabetes, hemophilia, and coagulation.
Sanofi
Sanofi and the Joslin Diabetes Center partnered with Google Life Sciences. At the time, the team explained in a statement that the organizations have partnered "to move technology out of the lab more quickly and work on better ways for patients and physicians to collect, analyze, and understand all the multiple sources of information that impact diabetes management."
AstraZeneca
AstraZeneca partnered with mobile-enabled health coaching services company Vida to launch an app, called Day-by-Day, that helps patients who are recovering from a heart attack. The app is not only designed to speed up the patient’s recovery, but it also helps patients deal with trauma that they may feel after experiencing a heart attack. The app is currently part of a trial program at Duke University.
AstraZeneca also partnered with New Zealand-based Adherium Limited, which offers a mobile-enabled inhaler, to incorporate digital health offerings into AstraZeneca’s patient support programs for people with COPD and asthma.
Shortly after this announcement was made, Adherium released data from three small studies of the company’s Smartinhaler system. Data from the studies, all of which involved children and adolescents, indicated a 144 percent increase in adherence for patients using the connected devices, a 14.9 percent increase in lung function and a 37 percent reduction in oral steroid usage, as well as qualitative insights about patient reactions to the form factor.
And towards the end of the quarter, AstraZeneca publicly released preclinical data from more than 50 of its medicines in order to find new drug combinations for cancer treatments. The data AstraZeneca released will be used in a competition it created in partnership with the DREAM Challenge, a non-profit, collaborative community that runs crowdsourcing efforts for biology.
Teva Pharmaceuticals
Finally, Teva Pharmaceuticals announced that it would acquire Cambridge, Massachusetts-based Gecko Health Innovations (previously known as GeckoCap), a smart inhaler company. The terms of the deal were not disclosed.
Pharma accelerators and other news
Two pharma-related accelerators were announced.
Johnson and Johnson Innovation (JJI) announced that it was teaming up with hardware manufacturing company PCH to create Hardware for Health, an accelerator of sorts for companies with a consumer health oriented hardware prototype.
Merck Sharpe and Dohme (MSD), the UK subsidiary of US pharma company Merck and Co, partnered with Wayan Open Future, a digital startup accelerator run by Spanish telecom company Telefonica to create a new digital health accelerator focused on preventative health.
Other pharma-related news included an infographic recently released by German app company SmartPatient that found 66 percent of all pharma app downloads in the United States, the United Kingdom, and Germany, were downloads of the top 10 apps and an app launch from Iodine, the crowdsourced drug review startup that launched last year. Iodine's new app aims to help users document their experience with antidepressants.
Government policy and regulatory-related digital health news in Q3 2015
This quarter saw a lot of action in digital health from both the federal government and state governments, but it was largely scattered rather than centralizing around an obvious trend.
Telemedicine
The one exception, perhaps, was telemedicine, which various forces in government are continuing to grapple with. For one thing, Teladoc's antitrust lawsuit against the Texas Medical Board continued, costing Teladoc upwards of $7 million in legal fees according to the company's first earnings call. Just recently the Attorney General of Texas weighed in on that case on the medical board's behalf, arguing that there is, in fact, state supervision of the medical board which would make it a state agency under law and therefore immune to suit.
Texas wasn't the only state dealing with telemedicine laws. Mississippi’s medical board shelved a rule that would have put strict limits on telemedicine usage, Colorado’s state medical board updated draft guidelines that will determine what doctors are and aren’t allowed to do via telemedicine, and Illinois became the 11th state to adopt the interstate licensure compact that the Federation of State Medical Boards proposed last year. Alabama, Idaho, Iowa, Minnesota, Montana, Nevada, South Dakota, Utah, West Virginia, and Wyoming have all signed the compact already.
On the federal level, the ONC proposed some best practices for consumer telehealth, although we pointed out at the time that the exclusion of consumer telehealth companies from that meeting was problematic. Telemedicine even cropped up on Hilary Clinton's campaign trail, with the former Secretary of State declaring her intentions to "streamline licensing and explore how to make that reimbursable under Medicare" at a campaign stop in Iowa.
Department of Defense moves
The Department of Defense made a couple of big digital health moves this quarter. In July, the DoD announced in a blog post that it may soon start using smartphone-based diagnosis tools to detect traumatic brain injuries in soldiers on the battlefield. The DoD is working with Bethesda, Maryland-based BrainScope to put its FDA-cleared Ahead 200 device into action. The device consists of a headpiece with a number of EEG leads which connects to an Android smartphone, which runs the diagnostic software. It’s FDA-cleared for prescription use by trained medical professionals only.
And in September, the DoD made a big bet on flexible electronics, an area of technology with close ties to mobile health. The DoD will invest $75 million in a public-private partnership called the Manufacturing Innovation Institute for Flexible Hybrid Electronics, which will consist of a consortium of 162 companies, universities, and non-profits led by the FlexTech Alliance, an industry association. That funding will be distributed over five years and boosted by a further $90 million in private and academic funding.
Other government news
In July, digital health came up many times at the White House Conference on Aging, where the White House also announced the launch of aging.gov, an online hub for seniors seeking information about government resources. That was one of two times the White House hosted digital health entrepreneurs this quarter, as they also hosted the first White House demo day, which drew in six digital health startups.
Also in July, the National Cybersecurity Center of Excellence (NCCoE), a division of the National Institute of Standards and Technology (NIST) penned a five-part draft guidance on cybersecurity for mobile devices that connect to electronic health records. The guidance includes a step-by-step how-to guide for improving data security that uses commercially available and open source tools and technologies, as well as sections on standards and control mapping and risk assessment.
Congress held a hearing on the Internet of Things which included some healthcare content. Both Morgan Reed, executive director of ACT The App Organization and Gary Shapiro, CEO and President of the Consumer Electronics Association, spoke about health in their testimonies, encouraging the government to regulate with a light touch.
Arizona introduced a new Medicaid plan which included providing mobile health tools to help Medicaid beneficiaries “avoid an emergency room visit by using an app to look up your primary care doctor or find an urgent care near you, manage chronic illnesses or conduct your own health screenings using an app, receive text alerts for an appointment reminder or managing medication, and manage your account online, including annual renewals, address or income changes or use a chat feature to ask questions instead of waiting on hold or in long lines.”
The FCC faced some criticism after opening up spectrum that had previously been reserved for hospitals. Both the American Hospital Association and a group of 16 Congresspeople sent public letters objecting to the decision.
The Federal Trade Commission charged the marketers of a vision improvement app, called UltimEyes, with deceptively claiming they their program was scientifically proven to improve the user’s eyesight. The company behind the app, Carrot Neurotechnology, and its co-owners Adam Goldberg and Aaron Seitz have agreed to pay $150,000 and to stop citing the claims. Notably, the $5.99 app is still available online and in various app stores — just without the claims the FTC had a problem with.
The National Science Foundation and the National Cancer Institute also gave out some research grants this quarter, with the former allocating $166,000 for a smartphone-connected test, for people with sickle cell disease, that monitors the activity of red blood cells and the latter giving Chrono Therapeutics $2.3 million to fund a clinical trial for its smoking cessation wearable.
Q3 FDA news and clearances
Four of the biggest pieces of FDA news this quarter weren't actually 510(k) clearances. Proteus Digital Health, which has an ingestible-sensor-based digital health feedback system that's already cleared, announced that it had submitted for clearance the mass market drug to incorporate Proteus’s ingestible sensor, a new version of Otsuka's antipsychotic Abilify. The combined pill has been submitted as a new drug application (NDA), rather than as a medical device.
Additionally, Palo Alto-based novel blood test company Theranos was granted a waiver from the FDA allowing the company to offer its first FDA-cleared blood test, its herpes simplex 1 virus IgG (HSV IgG) test, outside of a lab setting. According to the company, it’s the first HSV test to receive the waiver, called a CLIA waiver (CLIA stands for the Clinical Laboratory Improvement Amendments of 1988).
The FDA approved San Diego, California-base
Also this quarter, Israeli medical device company Integrity Applications began the process with the FDA to bring its noninvasive glucose monitoring device, GlucoTrack, to the United States. GlucoTrack allows users to monitor their blood glucose level without drawing blood. The user wears a clip on his or her ear, and GlucoTrack uses a combination of sensors to determine blood glucose level, then sends the data to handheld device about the size of a smartphone.
Read on for four digital health FDA clearances.
In July, Madison, Wisconsin-based Propeller Health secured two new FDA clearances for new sensors that are designed to work with two particular inhalers on the market: the Diskus inhaler from GlaxoSmithKline and the Respimat inhaler from Boehringer Ingelheim. Unlike previous FDA clearances for Propeller, the new clearances actually allow Propeller to market its new devices as improving — not just tracking — medication adherence.
In August, Naperville, Illinois-based PhysIQ received an FDA 510(k) clearance for its personalized physiology analytics system. PhysIQ’s offering is an early warning detection platform that analyzes a user’s physiological data, including heart rate, respiration rate, oximetry, and blood pressure to create a personalized baseline for each user.
In September, Berkeley, California-based Eko Devices received FDA 510(k) clearance for its smartphone-enabled stethoscope, called Eko Core, as well as the companion smartphone app.
And finally, LifeWatch, a Swiss remote cardiac monitoring company that has been connecting to mobile phones since 2009, has received FDA clearance for a new version of its Ambulatory Cardiac Telemetry (ACT) system that will run on Android devices. The initial clearance will allow the system to work with the Samsung Galaxy S4 Mini, but according to a press release the company plans to get clearance for additional Android phones in the future, as well as for a planned Android-compatible cardiac telemetry patch and another product under development, the company’s “universal gateway” which also will run on an Android operating system.
Digital health mergers and acquisitions in Q3 2015
The third quarter saw a number of acquisitions -- we count 12 -- with the last two coming in just under the wire at the end of September.
Fitness app acquisitions
First off, there was a pair of acquisitions in the fitness app space, which continued a powerful trend from the first half of the year. In fact, one acquisition actually occurred in Q2, but MobiHealthNews broke the news of it at the start of Q3. Under Armour quietly acquired Austin, Texas-based Gritness. The acquisition price was not disclosed.
The Gritness app is essentially a search engine that helps people find and join workouts. Through the app or website, users can search for workouts or find friends that have similar fitness interests. Businesses can also use Gritness to make their available fitness programs more visible.
The other big news in the world of fitness app acquisitions came from Adidas, who bought Austrian app Runtastic for $240 million, a move seen by most as a reaction to Under Armour's acquisition spree that started last year. Runtastic will continue to operate as a brand and an independent business unit out of Linz, Austria, Vienna, and San Francisco, Gschwandtner wrote. All four co-founders will stay on board. He also promised a new app by the end of the year.
Provider-related acquisitions
July and August saw a slew of provider-related acquisitions. First, Seattle, Washington-based Numera, a longtime mobile health company that offers mobile personal emergency response devices as well as other telehealth tools, had its mPERS and telehealth assets acquired by Carlsbad, California-based Nortek Security and Control. According to a Nortek FAQ, Nortek funded the transaction, valued at $12 million “plus contingent consideration based on future sales”, from cash on hand. Numera Social, Numera’s relatively new consumer engagement and behavior change platform, was not part of the deal and will remain an independent company with a new brand.
Later in July, Physicians Interactive (PI), the digital health marketing company that offers medical reference apps and resources like Omnio to physicians, acquired Waltham, Massachusetts-based Quantia Communications, parent company of physician social network QuantiaMD. The acquisition, the terms of which were undisclosed, adds the first peer-to-peer network to PI’s platform, which already includes a number of different resources for physicians and, as of last year’s acquisition, patient-facing health company MedHelp.
Then in August, IBM Watson Health made its third acquisition, Merge Healthcare, which it bought for $1 billion. Using Merge’s software and datasets, Watson will be able to scan medical images, like X-rays, brain scans, or dermatological images, and compare them to a database of historical images, in order to detect anomalies or historical correlations.
A few weeks later, Stoughton, Massachusetts-based Medical Specialties Distributors (MSD), a distributor and rental service for home care medical equipment, acquired Verbal Applications, also known as VerbalCare, which has developed apps that allow care teams to communicate better with their patients. The terms were undisclosed.
International M&A
One of the most interesting international acquisitions of the quarter was also the only one we tracked in the pharma space: Israeli pharmaceutical company Teva announced plans to acquire Cambridge, Massachusetts-based Gecko Health Innovations (previously known as GeckoCap), a smart inhaler company. The terms of the deal were not disclosed.
And while the Teva deal saw an Israeli company buying a startup in the United States, that same week brought news of a US company buying a startup abroad: Sharing economy lodging giant Airbnb has acquired Lapka, a Russian startup, that developed smartphone-connected sensor offerings, including a smartphone-connected breathalyzer. It's unlikely that this signals a move into healthcare for Airbnb (though stranger things have happened) and more likely that the acquisition was a talent grab.
Two acquisitions and rumors of another came to us from India this quarter: India-based Practo, which offers a practice management tool and a doctor search engine, acquired hospital data management provider Insta Health in September and rival appointment scheduling company Qikwell a few weeks later. Practo bought Insta Health for $12 million, but the terms of the Qikwell deal were undisclosed. Earlier in the year, the company also acquired digital fitness startup Fitho and Genii, an ecommerce company.
The quarter also saw reports that Netherlands-based Wolters Kluwer, which offers clinical reference information products like medical apps to students and professionals in the medical field, plans to expand its digital health division in India, including via acquisitions. Many healthcare systems across a number of Indian cities already use one of Wolters Kluwer’s most popular tools, a reference app called UpToDate.
Another acquisition, in Sweden, dealt with the diabetes space. Sweden-based company Diabetes Tools, which has developed a mobile, clinical diabetes management service, called TriabetesClinic, acquired a consumer-facing diabetes tracking app for children, called DiabetesGuru, from its developer, Shore Innovation, for an undisclosed sum.
Finally, on a personal note, the quarter saw the conclusion of the acquisition of MobiHealthNews by HIMSS Media. We're excited about the future possibilities that will entail for the publication.
Funding for digital health companies in Q3 2015
This quarter, startups that MobiHealthNews has covered raised a total of around $689 million in venture capital, spread across 49 deals. This is significantly higher than the total funding from the third quarter of 2014, which reached around $392 million. Some of the larger deals this quarter included ZocDoc's $130 million, 23andMe's $79 million, and Grand Rounds' $55 million.
Additionally, very early in the quarter, Dallas, Texas-based video visits telehealth company Teladoc raised $156.8 million in its IPO. At the last minute the company increased both the price of its shares to $19 and the number of shares it was selling to 8.3 million.
ZocDoc gets $130 million: Mobile and online appointment booking platform ZocDoc raised $130 million in the company’s first investment round in two years. Baillie Gifford and Atomico led the round, with additional participation from existing investor Founders Fund. In its statement, ZocDoc says the decision to raise money again now is related to its intention to expand its offering beyond appointment booking. More
23andMe raises $79 million: Mail-order personal genome service and research company 23andMe raised $79 million, in a round the company hopes will top out at $15o million. This is the company’s largest single funding raise to date. It brings its total funding to $190 million plus a $1.4 million research grant from the National Institutes of Health. More
Grand Rounds raises $55 million: Grand Rounds, a company that works with consumers and employers to match patients with specialist doctors and helps provide second opinions, raised $55 million in third round funding from a new, undisclosed global mutual fund investor as well as existing investors Greylock, Venrock, Harrison Metal and David Ebersman. More
Omada Health raises $48 million: San Francisco-based Omada Health raised $48 million in a round led by Norwest Venture Partners with participation from existing investors US Venture Partners, Rock Health, and Andreessen Horowitz as well as new investors GE Ventures and dRx Capital. Omada also received strategic funding from two of its customers: Humana and Providence Health & Services. This brings their total funding to at least $77.5 million to date. More
Quyi raises $40 million: China-based Quyi, which develops medical apps, raised $40 million in a round led by Chinese search giant Baidu, with participation from existing investors HighLight Capital and SB China Capital. This brings the company’s total funding to at least $48.5 million. More
Modernizing Medicine raises $38 million: Boca Raton, Florida-based Modernizing Medicine raised $38 million in equity, security and options, according to an SEC filing. Investors that contributed to the round included Pentland Group and funds affiliated with Summit Partners and Sands Capital Ventures, the company said in a statement. This brings the company’s total funding to around $87 million. More
PokitDok raises $34 million: San Mateo, California-based PokitDok, which offers a healthcare price comparison tool and API-based tools for healthcare developers, raised $34 million. This brings the company’s total funding to at least $37 million. More
Headspace gets $34 million: Venice, California-based Headspace raised $34 million for a meditation app that aims to help users with stress, focus, and anxiety. The round was led by The Chernin Group, with participation from Advancit Capital, Allen & Company, Breyer Capital, Broadway Video Ventures, Deerfield Management, Freelands Ventures, and William Morris Endeavor as well as celebrity angel investors Jessica Alba, Cash Warren, Jared Leto, Ryan Seacrest, and LinkedIn CEO Jeff Weiner. More
Oscar gets $32.5 million: Oscar, a small New York City-based health insurer noted for its individual focus and digital health savvy, secured a $32.5 million investment from Google Capital, one of the search giant’s two investment arms. More
Adherium Limited raises $25.6 million: Adherium Limited, a New Zealand company working on a smart inhaler, raised $25.6 million ($35 million AU) in an initial public offering on the Australian Securities Exchange, including a $3 million investment from its partner pharma company AstraZeneca, which just last month announced a longterm commercialization agreement with the company. More
3D4Medical raises $16.4 million: Ireland-based 3D4Medical, which has developed apps for medical education and fitness, raised $16.4 million from Irish life sciences company Malin, which now owns 38 percent of the company. Malin also has a further call option to increase its shareholding to 50 percent. More
Pager raises $14 million: New York City-based Pager, which offers an app consumers can use to request in-person physician house calls, raised $14 million from New Enterprise Associates (NEA) and Sound Ventures, which was founded by Ashton Kutcher. Existing investors Goodwater Capital, Lux Capital, and Montage Ventures also participated. More
Lumity gets $14 million: Lumity, a data-driven benefits management company, raised $14 million. Social+Capital Partnership led the round, with additional contributions from True Ventures and Rock Health. This is the first round of funding for the company, which was founded in 2013. More
Whoop raises $12 million: Whoop, a Boston-based wearable company working on a device for athletes, announced an additional $12 million in funding as it prepares to officially launch its Whoop Strap device and performance optimization system. Two Sigma Ventures led the round. Mousse Partners, Accomplice, Promus Ventures, Valley Oak Investments, and NextView Ventures also participated. This brings the company’s total funding to $22 million. More
TytoCare raises $11 million: Israeli digital health device maker TytoCare raised $11 million in a round led by Cambia Health Solutions. Existing investors include OrbiMed Israel Partners, LionBird, Walgreens, and Fosun Pharma. This brings the company’s total funding to $18.5 million to date. More
Senseonics raises $10 million: Germantown, Maryland-based continuous glucose monitor device maker Senseonics raised $10 million. Existing investors include Anthem Capital, Delphi Ventures, Greenspring Associates, Healthcare Ventures, and New Enterprise Associates. This brings the company’s total funding to at least $94 million to date. More
DynoSense raises $9.4 million: Sunnyvale, California-based DynoSense, which has developed a mobile-enabled sensor that tracks a number of vital signs and other health biometrics, raised $9.4 million from WI Harper Group, JKOM Cloud Health Technology, Plug and Play Tech Center, Jinmao Capital, and Wilson, Sonsini, Goodrich and Rosati. More
InfoBionic raises $8 million: Lowell, Massachusetts-based remote patient monitoring company InfoBionic raised $8 million led by existing investor Safeguard Scientifics. Other existing investors also contributed to the round, including Excel Venture Management and Zaffre Investments, a subsidiary of Blue Cross Blue Shield of Massachusetts. More
Sleepace raises $7 million: China-based Sleepace, which has developed a sleep tracking device, raised $7 million in a round led by retail chain Luolai Home Textile with participation from ecommerce giant JD.com. This brings the company’s total funding to $10 million to date. More
Owlet picks up $7 million: Owlet Baby Care, a tech startup developing smart socks for monitoring infants’ vital signs, raised $6 million in venture funding and another $1 million in the form of an NIH Grant. The venture funding was led by Formation 8 (F8), with participation from Blake Mycoskie, founder of TOMS Shoes, who recently started a new fund called Carpe Diem VC. Previous investors Azimuth Ventures, ffvc, Eniac Ventures and Peak Capital also contributed to the round. More
Voalte raises another $7 million: Sarasota, Florida-based Voalte, which offers a suite of smartphone-based communication tools to nurses and other hospital caregivers, raised the last $7 million of a $17 million round from Ascension Ventures, the venture arm of the health system, Cerner Capital, an affiliate of Cerner Corporation, and Bedford Funding. More
Zest Health raises $6 million: Chicago-based Zest Health, which has developed an app that helps people view and understand their health benefits, raised $6 million from 7wire Ventures, Lightbank, Zaffre Investments, Martin Ventures, Dallas Venture Partners, and LSAN/Azimuth Ventures. More
Lemonade Lab raises $5.8 million: Boston-based fitness tracking company Lemonade Lab raised $5.8 million in a round led by FIH Mobile, a subsidiary of Foxconn Technology Group. This brings the company’s total funding to at least $10.3 million. More
Kindara raises $5.3 million: Boulder, Colorado-based Kindara, which offers fertility tracking tools, raised $5.3 million in a round led by Boston Seed Capital with participation from SOS Ventures, Good Works Ventures, PV Ventures, MENA Venture Investments, and 62 Mile Ventures. The funding included the conversion of $1.9 million in convertible notes. More
CliniCloud raises $5 million: CliniCloud, which started taking preorders for a smartphone connected medical kit in February, raised $5 million in a round led by Tencent and Ping An Ventures, the investment arm of a China-based insurance, finance, and banking conglomerate. The company also announced that Best Buy will carry its offerings in US- and Canada-based stores starting this holiday season. More
Your.MD raises $5 million: London-based Your.MD, which has developed a health management app that includes a symptom checker, raised $5 million in a round led by Smedvig Capital, with participation from existing angel investors. This brings the company’s total funding to $7.3 million. More
Picwell raises $4 million: Philadelphia-based Picwell, which helps consumers choose a health plan, raised $4 million in a round led by MassMutual Ventures, which is the corporate venture capital arm of Massachusetts Mutual Life Insurance Company. Other investors in the round include Tenent Healthcare CEO Trevor Fetter, Amedisys CEO Paul Kusserow, and Bruce Perkins, former president of health and well-being services for Humana. More
Dispatch Health raises $3.6 million: Denver, Colorado-based Dispatch Health (formerly True North Health Navigation), which developed a doctor house call service, raised $3.6 million from investors including EMP Holdings, which has previously invested in iTriage, which was acquired by Aetna in 2011, and StatHealth, which was acquired by Teladoc in 2015. More
Bright.md picks up $3.5 million: Bright.md, a telemedicine company for non-acute care that uses a software called SmartExam to minimize the time required of its physicians, raised $3.5 million in first round funding. The round was led by Oregon Angel Fund, with substantial participation from Seven Peaks Ventures and Stanford-StartX Fund. The company previously raised a $1 million seed round. More
SkinVision raises $3.4 million: Amsterdam-based dermatology app company SkinVision raised $3.4 million from pharmaceutical company Leo Pharma with contributions from SkinVision’s existing investor and majority stakeholder Dutch investment firm Personal Health Solutions Capital. The company plans to use the funding to move its app’s capabilities beyond melanoma recognition and into other skin conditions. More
Gauss raises $3.3 million: Los Altos, California-based Gauss Surgical raised $3.3 million. The company offers surgeons and their teams FDA-cleared apps that help track blood loss. This latest funding brings the company’s total to about $11 million. It last raised funds at the end of 2014, when Gauss Surgical raised $1.5 million. More
Leaf Healthcare gets $3.3 million: Leaf Healthcare, Pleasanton, California-based wireless patient monitoring company, raised $3.3 million. The company did not disclose investors, but SDL Ventures lists Leaf Healthcare as a portfolio company. More
Limelight Health raises $3 million: San Francisco-based Limelight Health, which has developed a white-labeled health insurance quoting app, announced that it raised $3 million from MassMutual Ventures, the corporate venture capital arm of Massachusetts Mutual Life Insurance Company (MassMutual), and AXA Strategic Ventures. Accelerator Launchpad Digital Health, which was the lead investor in Limelight’s seed round, also contributed. This brings the company’s funding to $3.7 million to date. More
Medfusion picks up $3 million: Medfusion, a patient portal company that was acquired by Intuit and then bought back again by its original owner, raised $3 million and launched a new suite of products. The funding came from two Durham, North Carolina-based venture firms: Bull City Venture Partners and Hatteras Venture Partners. More
Valencell gets another $2.6 million: Raleigh, North Carolina-based Valencell, which embeds its health and medical sensors in some wearable devices, most notably in sensor-equipped headphones, raised $2.6 million in a combination of debt and equity. More
LabStyle Innovations raises $2.5 million: Israel-based LabStyle Innovations, maker of a smartphone-connected glucometer called Dario, raised $2.5 million in common stock from Canadian investor Shmuel Farhi and others. This brings the company’s total funding to at least $12.5 million. More
BrainScope raises $2.5 million: Bethesda, Maryland-based BrainScope, which has developed mobile, non-invasive devices that help medical professionals assess Traumatic Brain Injury (TBI), raised $2.5 million. More
Medical Memory raises $2.1 million: Phoenix, Arizona-based Medical Memory raised $2.1 million, in a round led by Provenance Venture Partners, for a tablet-based app that records office visits so that patients can have access to post-discharge instructions online. More
Curely raises $2 million: Newport Beach, California-based Curely, which has developed a telehealth app that allows patients to ask physicians health and wellness questions, raised $2 million in a round led by Exponential Partners. More
drchrono raises $2 million: Mountain View, California-based drchrono, which offers a mobile EHR, raised $2 million from existing investors Runa Capital and Maxfield Capital. This brings the company’s total funding to at least $8.25 million to date. More
MocaCare raises $2 million: Palo Alto, California-based MocaCare, which has developed a device that tracks cardiovascular health, raised $2 million in a round led by JDM Mobile Internet Solutions with participation from EMB International and Atom Health Corporation. This brings the company’s total funding to $4 million to date. More
SmartSpot raises $1.8: SmartSpot, which has developed an interactive video-based offering for gyms that instructs members how to work out properly, raised $1.85 million from Khosla Ventures and Signalfire. More
1DocWay raises $1.7 million: New York City-based 1DocWay raised $1.7 million in a round led by iSeedVC, with participation from Rock Health, which announced its share of the investment in April, Asset Management, Great Oaks Venture Capital, and Waterline Ventures. More
mPulse Mobile raises $1.7 million: Encino, California-based mPulse Mobile, which offers secure messaging tools to healthcare companies, raised $1.7 million in a round led by OCA Ventures with participation from Jumpstart Ventures and Merrick Ventures. mPulse was created as a healthcare-focused spinoff of secure mobile messaging company mobileStorm at the end of last year. More
Moff raises $1.3 million: Japan-based Moff raised $1.3 million from Japanese video game giant Bandai Namco Entertainment, Orso, and TomyK. This brings the company’s total funding to at least $1.7 million. More
CareDox raises $1.2 million: New York City-based mobile medical record system CareDox (formerly MotherKnows) raised $1.2 million, according to an SEC filing. This brings the company’s total funding to at least $6.1 million. More
eVisit raises $1 million: Phoenix, Arizona-based eVisit raised a $1 million seed round from Alan Ram, founder of Alan Ram’s Proactive Training Solutions, Chris Reap, investor at Northstar Capital, and others. More
SkyMD nets $800,000: New York City-based SkyMD, which has developed a telemedicine service for providers to use with their patients, raised $800,000 from angel investors including Blue Apron founder Matt Salzberg and Livestar founder Fritz Lanman. More
Care at Hand raises $560,000: Boston-based healthcare analytics company Care at Hand raised $560,000. The round was led by strategic investor PCG Public Partnerships, a financial management services firm that helps state, county, and local public agencies to implement a participant-directed service model so they can make personalized choices about which services they receive within their budgets. More
Digital health industry metrics from Q3 2015
As usual, the quarter saw a number of industry market metrics, surveys of patients and providers, and other numerical indicators of the state of the digital health industry. We've rounded them up by category below.
Provider-focused polls and metrics
Just over half of ambulatory practice physicians (52 percent) use a mobile device to access patient records or reference data according to a new survey of more than 6,000 physicians from Black Book Market Research. While 52 percent of surveyed physicians say they use these mobile tools now, 70 percent intend to look to their mobiles for these use cases by the end of 2015.
A July survey of 450 respondents conducted by Validic showed that 59 percent of providers were behind on their strategy or didn’t have one, while 41 percent said they were on track with their digital health strategy. Respondents included hospitals, pharmaceutical companies, wellness companies, and healthcare technology companies.
Epocrates' annual survey of 1,000 medical students demonstrated that 96 percent of students believe having access in the EHR to patient data from other systems is important to care, a figure that closely matches a survey of practicing physicians from last year. Forty-four percent are concerned with their ability to share data within a practice, 73 percent are concerned with their ability to share data between practices and 87 percent would like to see a universal patient record.
Some 46 percent of primary care physicians said they were not aware that they could be reimbursed for non-face-to-face time with Medicare patients who have more than one chronic condition, according to a SmartCCM survey of 500 primary care physicians, which was fielded by Medical Marketing. Those codes are especially important given that 56 percent of primary care physicians said one of the biggest challenges they face when caring for these patients is the complexity of managing multiple conditions and 63 percent said they don’t have time to offer patients with chronic conditions with extra guidance to understand their treatment plans.
A report from healthcare marketing group Ipsos Health shows that 72 percent of 131 primary care doctors interviewed in the UK, Germany, and France have already used or recommended at least one form of digital health technology with their patients. Asked whether mobile technology would replace routine checkups for chronic patients in the future, 26 percent disagreed while 13 percent agreed — most were unsure. Similarly, 21 percent disagreed with the sentiment that “health and lifestyle apps for patients are key to improving patient adherence or compliance”, but only 15 percent agreed with it. A full 37 percent disagreed — and 10 agreed — with the statement that compliance monitoring through apps will be a prerequisite for drug reimbursement in the future
Finally, a small survey of 69 ACOs recently conducted by the eHealth Initiative showed that, while 75 percent used EHRs and 62 percent offered a patient portal, only 20 percent used some kind of telemedicine and 30 percent use electronic forms to capture patient data.
Patient engagement metrics
In a study based on data from the Mayo Clinic's patient portal, researchers looked at 52,373 secure messages in their patient portal and picked out the 624 that contained reports about home blood pressure monitoring, from qualitative assessments like “my BP was a little high” to quantitative reports of actual blood pressure measurements. While patients and doctors found the portal useful and acceptable for discussion, patients didn’t really transmit useful information. When doctors were asked to express their confidence level in prescribing based on the information contained in the messages, they expressed a moderate or extreme level of confidence only 12 percent of the time. Assessed in accordance with AHA guidelines, only 7 percent of messages would be considered to have enough information for clinical decision-making.
A survey sponsored by VMWare in connection with it Most Wired hospitals report found that 79 percent of all hospitals in the survey offered access to their patient portal through an app, up from 47 percent in 2014.
A survey of 1,000 adults, sponsored by Surescripts and conducted by Kelton Global, found that some 51 percent of patients who communicate with their doctor via email or text instead of just by phone said they don’t feel as rushed to ask questions. While 46 percent said they feel more comfortable asking their doctor questions via email or text instead of just by phone, 43 percent said that if they could text and email, they would contact their doctors more often.
An IMS study of health apps found 165,000 apps for consumers and healthcare providers. One in 10 health apps connected to a device or sensor and 34 percent connected to a social network, but just 2 percent connected to a healthcare provider IT system like an EHR. IMS also found that found that 90 percent of downloads encompassed just 12 percent of apps, and that 40 percent of apps have less than 5,000 downloads.
A study in the British Medical Journal looked specifically at commercially available symptom checkers to assess their diagnostic accuracy. It found that on average, symptom checkers listed the correct diagnosis first just 34 percent of the time. They had it listed in the top three 51 percent of the time and listed it in the top 20 just 58 percent of the time. Conditions were triaged correctly 57 percent of the time on average, but the symptom checkers erred on the side of sending patients to the emergency room: 80 percent of vignettes requiring emergency visits were triaged correctly, compared to 55 percent requiring non-emergency care and 33 percent requiring self-care.
A number of studies looked at patient and consumer attitudes toward telehealth.
Some 9 percent of respondents said they have used a telehealth service for a minor illness at least once since these tools became commercially available, according to a Healthline survey of 3,679 people who read Healthline.com, a medical information website. Within this group, 90 percent said their experience using telehealth services was the same or better than their experience at a doctor’s office. And 45 percent of respondents who said they have used a telehealth service also said they were unaware of these services two or three years ago.
One third of CVS MinuteClinic telehealth users actually preferred a video visit to an in-person one, according to a survey of 1,700 MinuteClinic telehealth users conducted by CVS between January and September 2014 and published in the Journal of General Internal Medicine. Fifty-seven percent liked the video visit just as well as an in-person one, and just 10 percent found it worse. Women were more likely to prefer telehealth, as were people without insurance and people who gave telehealth high scores for quality of care and convenience.
CVS's number lines up pretty well with a 504-person TechnologyAdvice study, which found that some 35 percent of consumers said they would likely choose a virtual visit over an in-person one. But the survey also found that 56 percent of respondents said they would be somewhat or very uncomfortable conducting a doctor visit using a telemedicine offering. And 75 percent of people said they would not trust a diagnosis that a doctor made over a video visit, or would trust it less than if they met with a doctor in person.
Meanwhile, a HealthMine survey of 1,200 participants found that 41 percent had never heard of telemedicine. That number goes down for millennials, just 30 percent of whom say they haven’t heard of telemedicine, but it goes up for the 45 to 64 age group, 46 percent of whom hadn’t heard of telemedicine.
Patient and consumer metrics
A report from PushDoctor, a UK telemedicine company, shows that 58 percent of the 1,013 UK citizens surveyed have used some kind of health or wellness technology. Twenty-two percent of patients use a smartphone, tablet, or computer to monitor exercise levels, 17 percent use such a device to establish BMI, 16.9 percent measure heart rate, 15.2 percent establish daily diet and calorie intake, 12.9 percent monitor sleep quality, and 5.1 percent share symptoms on social media to solicit friends’ opinions.
A Parks Associates survey of broadband-connected households found that 40 percent of US broadband households are interested in receiving medical alerts via a smartphone or another connected platform, and that 23 percent of households said they are concerned about privacy and security when using connected health devices. Additionally, 23 percent have security and privacy concerns when using connected fitness tracking devices.
A number of patient and consumer metrics in the quarter dealt with activity tracking. A study from Project Catalyst at AARP looked specifically at how easy older people found it to use consumer activity trackers. The study of 92 adults 50 and older showed that after six weeks of using an activity and sleep tracker, 71 percent of participants reported increased awareness of activity, sleep or eating habits, 45 percent reported increased motivation, 46 percent said they changed their behavior; and 67 percent of participants reported the activity and sleep tracker to be beneficial or of value.
On the other hand, two studies looked at opinions on fitness tracking on the other side of the age spectrum, millennials. Some 65 percent of millennials think its important to track their fitness, according to a survey of 5,000 millennials, aged 14 to 34, commissioned by Technogym, a fitness equipment manufacturer. The survey found that 72 percent of millennials said one benefit of tracking their fitness is that they could do it on the go, while 48 percent said it was helpful for keeping their fitness data organized in one place, and 43 percent said a benefit was more accurate data. Some 29 percent said the ease of sharing data with friends and families was a positive to using fitness trackers.
A Forrester survey of nearly 1,000 adults, broken down by demographic, found that 21 percent of US adults use a wearable device right now, and of those, 36 percent use a Fitbit device. Of the 21 percent that use a wearable device, 34 percent are Gen Z, aged 18 to 26; 35 percent are Gen Y, aged 27 to 35; and 18 percent are Gen X, aged 36 to 49. Just 11 percent are young boomers, aged 50 to 59, while 7 percent are older boomers, aged 60 to 70, and another 7 percent are seniors, aged 70 and older.
Finally, a Nuance survey of 3,000 people showed that 54 percent of young millennials (aged 18 to 24) say they search online for health information and rely on online physician ratings before seeing a doctor. The global average for all patients was just 39 percent. Millennials are also more than twice as likely as people 55 and older to trust others' personal recommendations when it comes to choosing a doctor.
Employee wellness metrics
Just two surveys this quarter dealt with employers. A HealthMine study found that some 46 percent of people who were diagnosed with a chronic condition in the last two years discovered their chronic illness through a wellness program. The survey also showed that 74 percent of respondents said they would participate in vision screenings, 73 percent would complete a blood pressure screening, and 69 percent would participate in a cholesterol screening. Over 50 percent of respondents would also participate in cancer screenings, hearing screenings, BMI screenings, and glucose screenings.
And a survey of 140 employers from the National Business Group on Health found that, while 48 percent of the employers offer telehealth services to employees currently, 74 percent of employers in states where telehealth services are legal plan to offer them in the coming year. The association characterized this spike as a “sharp increase in telehealth”.
Some 81 percent of respondents plan to offer nurse coaching for care and condition management, while 73 percent expect to offer nurse coaching for lifestyle management. About 73 percent offer employees self-service decision-making tools that aim to help become better healthcare consumers.
Market data
A number of assessments and projections about the growth of different markets within digital health were also issued this quarter. Here's a quick roundup.
Kalorama Information pegged the global advanced patient monitoring market at about $31.4 billion in July. The research firm said the patient monitoring market has benefited from the demand in major healthcare facilities and home treatment markets to move to a wireless system. In September, Kalorama reported that the medical app market was worth $489 million in 2015 and nearly 40 percent of sales came from health monitoring apps.
IHS Technology projected that 4 million patients globally will remotely monitor their health conditions by 2020, up from 664,000 patients in 2014. IHS estimates about 1.9 million of these will monitor congestive heart failure, 700,000 will monitor diabetes, and 300,000 will monitor COPD.
The research firm Tractica believes that increased growth of biometric sensors will open up the market for biometric authentication. While the global market for biometric authentication in healthcare is likely to hit just $250 million this year, the firm expects it to reach $3.5 billion by 2024. Its set to generate $12.5 billion in revenues between now and then, Tractica estimates.
The demand for wearable devices, which include fitness bands, smartwatches, smart glasses, and other sensor-enabled devices, decreased this quarter after reaching a high point in January, according to an Argus Insights report compiled from approximately 328,000 consumer reviews since January 2014.
The International Data Corporation (IDC) also released some more specific data on the wearables market. In the second quarter of 2015, Apple shipped 3.6 million units of the Apple Watch globally, just under Fitbit’s 4.4 million units, according to IDC. Fitbit still has the largest market share, 24.3 percent, though it’s share is 6 percent less than it was in the second quarter of 2014. Meanwhile, Apple, which only began shipping its device this year, had 19.9 percent market share in the second quarter.
Finally, from Accenture comes some general predictions about the digital health market. Accenture predicted that half of all US digital health startups would fail within two years of launching. Accenture predicts that in the next two years, another $2.5 billion will be invested in digital health startups. Almost 30 percent of these funds will be invested infrastructure, while 25 percent will be invested in engagement, 25 percent will be invested in treatment, and 21 percent will be invested in diagnosis.
In another report, the firm predicted that by 2018, 8 percent of health systems’ acquisition volume will be made up of digital health startups, up from 1 percent in 2014. They made projections based on an analysis of 1,500 healthcare provider acquisitions between 2006 and 2015.
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