The history of medicine is a history of innovation. Over thousands of years and across world cultures, physicians have been seeking ways to cure disease and improve lives, all through experimentation and invention. While some historic treatments seem incomprehensible to modern eyes (bloodletting, for instance), others look remarkably familiar (such as suturing).
Modern entrepreneurs in healthcare continue this history of innovation. They have revolutionized the ways doctors treat patients, designed medical devices that would have seemed miraculous to their ancient counterparts, and changed the way healthcare is delivered to patients and communities.
As the healthcare industry continues to expand in the U.S. and around the world, opportunities to create new and better ways of doing things grow along with it. Some of these are transformative medical treatments; others leverage the internet and technology to improve care quality; still others are applications that gather and make sense of the ocean of healthcare data generated daily.
What is healthcare entrepreneurship?
Healthcare entrepreneurship is the act of creating a product, process, or service that fills a need or introduces a new development in medicine or healthcare delivery. Healthcare innovators can come from a clinical, science, and/or business background, or have a combination in terms of experience and education. Doctors and nurses are often naturally drawn to innovation and entrepreneurship, since they see firsthand the need for a new way to do something, whether that is a process or a medical device.
Areas of healthcare entrepreneurship fall into the following broad categories.
Medical treatments, techniques, devices, and drugs
Antibiotics. Artificial hearts. Statins. Laparoscopic surgery. These treatments have revolutionized modern medicine so completely that people now take them for granted. Healthcare entrepreneurs who develop new medical devices or drugs follow in this tradition. Some recent examples include:
- Antibiotic envelopes: These devices are used to deliver antibiotics around an implant site, such as a cardiac implant.
- Anti-tremor devices: Gloves or cuffs disrupt signals in the brain to reduce tremors due to Parkinson’s disease and other causes.
- Biologics: Cells, blood components, and growth factors are some of the biologics that aid in speeding up the healing process.
- Heart monitoring devices: These devices can warn patients and doctors of heart failure.
- Rescue inhalers: When used, these devices send data to a healthcare provider.
- Stents and valves: Valves, stents, and other devices can eliminate the need for open-heart surgery and improve patient outcomes after other invasive procedures.
- Surgery tracers: These systems can help identify where cancer has spread in the body, such as to the lymph nodes.
Administrative products and services
Administrators in every healthcare organization, from single-physician practices to large hospital systems operating across several states, need tools to manage a vast array of tasks. Healthcare technology entrepreneurs need to be equipped with cutting-edge strategic planning skills to address administrative needs of healthcare providers. Administrative tasks include the following:
- Scheduling: Patient scheduling is a vital component of healthcare administration. Some scheduling software makes use of chatbots powered by artificial intelligence (AI) to perform patient intake and other scheduling tasks.
- Medicare coding: Proper coding is essential to getting reimbursements from insurance companies and Medicare for physician visits and procedures.
- Patient health records: Electronic health records (EHRs) contain vast amounts of data, much of it regulated by privacy laws. Managing EHRs is a large part of healthcare administration’s responsibilities.
- Finance, billing, accounting, and invoicing: Healthcare finance and accounting software is specifically designed for healthcare administration.
- Medical staff certification and licensing: Ensuring that medical staff are up-to-date on their licensing and certification, as well as continuing professional education, is essential to healthcare administrators.
Smartwatches and similar consumer devices track people’s health data, including their pulse, heart rate, diet, and exercise. These devices are a ripe area for innovation. Entrepreneurs have developed a number of applications that consumers can use to monitor their own health metrics and share the data with their physicians. One promise of these devices is that the data they collect can be used to identify disease clusters or, as in the case of the COVID-19 pandemic, pinpoint outbreaks. While experts say that these consumer devices raise data privacy concerns, entrepreneurs continue to develop apps to meet the growing demand.
Wearable health technology
Similar to smartwatches, wearable health technology is an area with great potential for new applications. Examples include cardiac and glucose monitors prescribed for health conditions. Healthcare entrepreneurs are creating innovative technologies to revolutionize healthcare delivery solutions to take advantage of the growing interest in these devices. Some innovative healthcare solution examples include:
- Biosensors: Self-adhesive patches collect data to help prevent a cardiac or other adverse event.
- Blood pressure monitors: These devices can take several daily readings and alert the user if their blood pressure rises to dangerous levels. This is a highly competitive niche.
- Glucose monitors: These devices continuously monitor blood sugar levels, giving people with diabetes the ability to better manage their health. Many of these devices now connect to smartwatches for easier use.
- Heart monitors: New heart monitor technology is noninvasive and allows patients to maintain their usual daily routines with minimal fuss.
- Jewelry: Rings and bracelets can be used to gather health metrics. In developing countries, a necklace for infants uses near-field technology to monitor the baby’s health and keep track of necessary vaccinations.
- Smart apparel: Smart shirts and other smart clothing monitor sleep, heart rate, and other metrics to provide health awareness.
Technology, data, and AI
Innovation in technology is exploding across healthcare. Examples include uses of AI and machine learning, big data, blockchain, EHRs, and electronic medical records (EMRs). These technological applications have transformed all aspects of healthcare delivery. They promise to improve care quality and patient safety as well as to advance research.
- Big data: The ocean of data currently being used in numerous healthcare applications continues to drive innovation opportunities for healthcare entrepreneurs. Protecting patient privacy, supporting physician diagnostics, and using data to help eliminate racial and other biases in care are just some of the ways that big data applications can fill a need in healthcare.
- Blockchain: Blockchain is best known for its use in cryptocurrency, but entrepreneurs have developed blockchain applications for healthcare as well. Blockchain uses encryption to store data securely. It can be used to protect patient data in accordance with the Health Insurance Portability and Accountability Act (HIPAA) and other regulations. Blockchain is also used in cybersecurity, to protect against hacker attacks and data breaches.
- EHR and EMR: The Affordable Care Act of 2010 led to the shift from paper records to electronic records. EHR refers to patient information that includes identification, address, and medical history. EMR refers to the patient’s chart and physician’s notes. EHR and EMR are meant to be easily shared with other physicians and providers, but because they contain so much patient data, they are highly regulated under HIPAA and Medicare.
- Telemedicine: Doctors were slow to adopt telemedicine for many reasons, citing compensation concerns and the inability to diagnose patients through physical touch, among others. Then, the pandemic happened. There are still barriers to telemedicine, including the lack of broadband in some rural areas. However, it may continue to be a solution as providers seek to lower costs of care, patients with mobility and other issues rely on telemedicine for their healthcare, and the convenience of telemedicine has been noted by patients.
Obstacles to innovation in healthcare
Would-be healthcare entrepreneurs face barriers to drive innovation. Legal and regulatory concerns, the need for capital investments in research and manufacturing, a missing medical or science background, and compensation structures are some of the obstacles that an innovator faces.
Legal, regulatory, and ethical considerations
Drugs and medical devices have a lengthy process of development (bench science) and clinical trials before approval by regulating bodies such as the Food and Drug Administration (FDA). Software applications that manage healthcare data must comply with HIPAA, Medicare, and other agencies’ regulations on patient data and patient privacy. Some of the ethical concerns regarding consumer health gear like smartwatches may also pose an obstacle to wide adoption of a new application.
Investment and capital
The U.S. pharmaceutical market was valued at just over $500 billion in 2019, according to a study by PriceWaterhouseCoopers. The world’s largest drugmakers spend billions on research and development (R&D). Some of that R&D investment goes to individual groundbreaking scientists who are following a promising line of research. Other healthcare entrepreneurs seek funding from venture capital firms or other investors. Drug development takes years and many compounds never make it out of the lab.
Only about 14% of all drugs that make it to clinical trial stages go on to gain FDA approval, according to a study published in Biostatistics. Another study published by the Journal of the American Medical Association estimated the median R&D cost of bringing a new drug to market at about $985 million; the study accounted for expenditures on failed trials.
Healthcare innovators who aim to lower healthcare costs are at a disadvantage, because the medical system is still largely run on a fee-for-service basis. Doctors and hospitals are paid per office visit or by procedure. While U.S. healthcare is slowly shifting to a value-based care model, which focuses on preventive measures, the economic incentives still favor fee for service.
Healthcare is traditionally risk-averse. After all, the Hippocratic oath states, “First, do no harm.” Ideas that challenge the status quo have to overcome this natural reluctance to change.
Examples of healthcare innovators and entrepreneurs
Despite these barriers to entry, innovation in healthcare is alive and well, and entrepreneurs are thriving. These healthcare innovators identified a need and developed a solution, creating a business that has become part of the healthcare ecosystem. In some cases, their creation took years to come to market.
Examples of some entrepreneurs in healthcare include:
1. Fabien Beckers, CEO and Co-founder of Arterys
Arterys is a 4-D flow medical imaging product that uses cloud technology to store and disseminate imaging data straight to physicians’ workstations. The Arterys software products use AI applications to help physicians interpret images faster and more accurately and are used in cardiovascular care, oncology, and other medical fields.
2. Marcel Botha, CEO of 10XBeta
10XBeta developed a simplified “bridge” ventilator to help patients breathe during the COVID-19 pandemic. The device is used for patients who are relatively healthy, freeing up ventilators for critically ill patients. Due to the pandemic, the FDA fast-tracked approval for the device, allowing hard-hit New York hospitals to order it early during the crisis.
3. Julie Taylor Cheek, CEO and Co-founder of Everly Health
Everly Health provides at-home kits for everything from food sensitivity to thyroid testing. Its interface makes using the kits and understanding the results patient-friendly.
4. Mick Correll, CEO of Genospace
Genospace is a platform to help researchers, labs, and pharmaceutical companies run precision medicine initiatives. It is meant to help doctors make individual clinical decisions for each patient, rather than use a one-size-fits-all approach.
5. Judy Faulkner, CEO of Epic
Faulkner pioneered EMRs. Epic is used by the largest healthcare systems in the U.S.
6. Iris Frye, Founder and Chief Innovator, Parity Health Information and Technology
Parity seeks to solve one of the biggest issues in healthcare — disparities and biases in care due to race and income.
7. Petteri Lahtela, CEO and Co-founder of Oura
The Oura ring tracks a patient’s heart rate, motion, and temperature to monitor sleep. Time named it one of the 100 best inventions of 2020 after it was used by the NBA to track players’ health during the pandemic.
8. Chrissa McFarlane, CEO of Patientory
The Patientory app gives users access to their health data through their smartphone, allowing them to track their tests, illnesses, medications, and more.
9. Rodger Novak, CEO and Co-founder of CRISPR Therapeutics
CRISPR is a gene-editing technology. CRISPR scientists Dr. Jennifer Doudna and Dr. Emmanuelle Charpentier won the Nobel Prize in chemistry in 2020.
10. Kishau Rogers, CEO of Time Study
Time Study allows healthcare organizations to track how their employees use their time and make data-supported decisions to improve the employee and patient experience.
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