'Doctorpreneurs' breathing new life into healthcare seed funding
Physicians Jay Joshi and Arlen Meyers have more in common than a medical degree. Both felt the desire to take what they learned from caring for patients and devise new ways to enhance the doctor-patient experience.
For Joshi, a primary care physician in northwest Indiana, that meant designing and developing a device that measures urine output, a common medical procedure. Financed through personal funds and a physician network that he created, the device is now about six months away from clinical trials.
The device, which will require FDA clearance before it can be marketed, could improve efficiencies in the intensive care unit, lower the rate of complications, and reduce deaths in patients with kidney injuries and kidney failure, Joshi said.
Meyers, a professor of otolaryngology, dentistry and engineering at the University of Colorado Denver, has translated his experiences as an ear, nose, and throat surgeon into two medical device companies and a global healthcare referral management platform. His inventions include devices that visually detect surface and near-surface cancers of the upper aerodigestive tract.
Today, Meyers and Joshi are part of a growing wave of “doctorpreneurs" who are diversifying their income and channeling their capital into healthcare startups.
Meyers, who has been inventing and commercializing products for much of his 40 years career, said he soon came to two realizations: “It shouldn’t be so hard and almost every doctor has a good idea, but doesn’t know what to do with it.”
In 2011, Meyers founded the Society of Physician Entrepreneurs, a global nonprofit biomedical and health innovation and entrepreneurship network for which he serves as CEO. Its mission is to help members get their ideas to patients.
The SOPE also welcomes entrepreneurs, investors and industry stakeholders. Today, it has 1,100 dues-paying members and more than 23,000 on its LinkedIn site.
Joshi is founder and CEO of MD Angels, which provides seed funding for physician-led startups. Most of its investments have involved health IT ventures like Joshi’s Outlook Medical, the urine monitoring startup, which raised $650,000, but the group also wants to get into medical devices and biotech, he said. Other seed-stage funding groups include angelMD in Seattle and the eponymously named UK-based Doctorpreneurs.
A classic conundrum: risks versus rewards
The trend is helping to fill a gap in seed funding for healthcare ventures, which can be riskier than other types of startups, experts say. For starters, the stakes are higher, since you’re dealing with peoples’ lives. In addition, healthcare is a highly regulated industry with a long product development cycle, especially if you’re dealing with drugs or medical devices. Products typically have to go through clinical trials before being approved for marketing, and, once they are available, they are subject to payment schemes unlike that in any other sector of the economy.
Recent stumbles by Theranos and Zenefits have demonstrated the difficulty in adapting disruptive IT technologies to the healthcare field. “Instead of building something that works great outside of healthcare, and trying to force-fit it into healthcare, innovators must take the opposite approach — working first with investors or partners who know the ins and outs of the healthcare delivery system, to ensure their business model is appropriate and needed,” Shannon Hooper, senior vice president at RiviveHealth, said in a recent blog.
Meyers — who prefers the term “sick care” to healthcare — said non-sick care entrepreneurs often fail with innovations because “they don’t get it.” The novel ideas and insights drawn from the frontlines of delivering patient care lie at the heart of doctorpreneurship’s unique appeal. “Sick care ain’t Uber,” Meyers said.
Do you have what it takes?
Fueling the movement are several factors, not the least being healthcare reform.
“To be an entrepreneur, you have to have a certain amount of freedom in your professional life, and as a result of that freedom there are risks,” explained Joshi. “I think with physicians, because of all the healthcare reform, they’ve lost a lot of freedom and autonomy and they’re looking for other ways to regain it.”
For too many years, the two main participants in the innovation supply chain — the doctor and the patient — were largely ignored, and the majority of innovations spun out of the medical industrial complex, Meyers said. That has changed with the recent focus on patient-centered care, and doctors are seeking a bigger say in how the system works.
Doctorpreneurship is “not really about creating companies; it’s about creating value,” said Meyers. “It could be a care delivery innovation, a process innovation, an educational innovation, or a policy innovation. There’s lots of ways to create user-defined value without creating a company and without necessarily seeing 20 patients a day for 10 minutes each for 40 years.”
Get doctors involved with innovation
Similar frustrations gave rise to the group, Doctorpreneurs. Fewer benefits and contractual changes between the UK’s National Health Service and physicians have led many to consider changing careers or at least supplementing their medical practices with outside endeavors, said James Gupta, the group’s director. The current generation of doctors is also more comfortable with technology, having grown up with the Internet and digital technologies and social media, he said.
Today’s doctors are also taught how to be in leadership and management positions within their care organizations, and are applying those skills to finding better ways to deliver services, Gupta said.
Healthcare startups require a “greater amount of domain expertise” than ordinary startups, and physicians are front and center in the practice of medicine, Joshi said. Compared with someone who would apply their data analytics IT expertise to an innovation in healthcare, doctors “can conceptualize the innovations that are taking place,” he added.
When it all comes round, doctorpreneurship is a win-win for doctors and patients, Gupta said. “We all know that medical technology is going to be a big thing over the next five to 10 years with digital platforms and EMRs, and promoting this idea that doctors can get involved in innovation helps make sure the technology has real potential for patients.”