By Tina Irgang
If you want to change the way healthcare works, Boston is the place to be.
“It’s ground zero for healthcare innovation,” says Jay Desai, founder and CEO of three-year-old medical alert startup PatientPing. “It’s also a great place to do a startup. There are terrific resources from a talent perspective.”
“Being in the Boston area, we find a highly educated, highly engaged workforce that has kind of the right mix of drive, initiative, empathy and passion,” agrees Steve Auerbach, CEO of healthcare payments giant Alegeus.
Then there’s the existing healthcare infrastructure. “Some of the top names in the world of medicine are right here,” notes Kevin Hrusovsky, chairman and CEO of medical testing company Quanterix. “You’ve got academic institutions, medical facilities and all the large science companies located here.”
While PatientPing, Alegeus and Quanterix all share a love of Boston, they also have something else in common: a drive to change healthcare for the better.
They could hardly have chosen a more pressing problem to solve. Healthcare spending in the U.S. has been growing year after year. In 2014, the most recent year for which federal data are available, spending reached $3 trillion, or $9,523 per person. Yet, according to data from the Organization for Economic Cooperation and Development, average life expectancy in the U.S. lags behind 12 other developed nations.
Where is my patient?
Before Desai founded PatientPing, he was working at the Centers for Medicare and Medicaid Services (CMS), where he helped implement the Affordable Care Act.
“What we were doing was essentially changing the way we pay for healthcare — changing from a volume-based to a value-based payment system,” he says. Basically, CMS was working to establish a system where providers wouldn’t be paid not based on the number of visits and procedures anymore. Instead, they would see bonuses or penalties based on how well patients were doing on certain outcomes, such as hospital readmissions.
However, that kind of change also entailed risk for providers. “One thing we kept hearing was a kind of basic need to know where patients are in real time — in particular when they go to the emergency room, nursing home or a home health agency,” says Desai. He explored various ways to solve that problem within the government, but “after a while I realized there were very few solutions.”
Desai decided to work on the problem in the private sector instead and, after researching the best places to start a healthcare company, settled on a move from Washington, DC, to Boston.
Today, three years after its founding, PatientPing has a network of 15,000 providers in six states. Whenever one of those participating providers sees a patient, an alert goes out to the patient’s other providers in the PatientPing network.
“Every provider will benefit from knowing about all the other providers on the patient’s care team,” notes Desai. Once the providers know about each other, they can exchange information about the patient’s medical history and past procedures.
Going forward, PatientPing wants to make that sharing mechanism even easier. “Right now, we send notifications, but we want to get medication lists and medical record information” so providers can more easily avoid potential medication interactions, allergic reactions or duplicate procedures. Desai also wants to make the system smart enough to detect early warning signs of things like congestive heart failure and opioid addictions. “That way, we can help providers prioritize patients,” he says.
Predicting disease before it shows
In 2014, Kevin Hrusovsky had successfully established and exited several companies, and was for all intents and purposes retired. “But I’ve always had this huge mission for the concept of preventing disease, as opposed to just treating and diagnosing it,” he says. “How can we detect disease before there are symptoms?”
That question had led Hrusovsky to serve on the boards of several different companies whose technologies had the potential to answer it. Then, he was approached by the owners of Quanterix. The company had been founded in 2007 by a noted researcher, David Walt, and had raised $15 million in financing from ARCH Venture Partners, Bain Capital Ventures and Flagship Ventures shortly thereafter. However, the company was having trouble finding the right CEO, with four different ones at the helm over a period of five years.
“[The owners said], we think you’re the only guy who thinks big enough to go after this company and translate it into something that affects your vision,” says Hrusovsky. After taking three months to do due diligence on the merits of Quanterix’s technology, he agreed to join.
It turned out that the company’s work was right in line with Hrusovsky’s mission of detecting disease before the symptom stage.
Quanterix’s technology has the ability to measure the presence of proteins in the blood, at very small concentrations. That’s important, Hrusovsky explains, because the prevalence of certain proteins can be an important predictor of disease. “When there’s a technology that can measure proteins, that can bring a lot more insight into what’s going on in the body,” he says.
For example, when there is damage to a person’s heart, the heart will start to release a protein called troponin and pump it into the blood. “If you had a heart attack 12 hours earlier, the concentration of troponin is at a level that today’s technologies will be able to see,” says Hrusovsky. “Ours can see troponin at a time when the patient is still healthy.”
A better way to diagnose concussions
Quanterix’s technology also can be applied to diagnosing concussions, he adds. Concussions generate protein markers that cross the blood-brain barrier, “but nobody knew, because it’s in such small quantities,” says Hrusovsky. Instead, to diagnose concussions, student athletes are typically asked to count backwards from 10, or to name the president. “That’s archaic, subjective medicine, to do that on the sideline and then put a high school player back into the game.”
To spread the word on Quanterix’s technology, Hrusovsky relies on generating excitement among three key stakeholders: employees, customers and investors. “On a scale from 0 to 10, the goal is to get all three to a 10 in terms of their excitement about the company,” he says. “If I can get the investors and customers and employees to rally behind our mission, that’s the way we get them all to support each other. That’s when businesses grow very rapidly.”
To that end, Hrusovsky and Quanterix organize regular conferences that bring all three groups together. “We start off with the vision for our greater purpose, and then we dive down and have the biggest names in medicine keynote with me,” he says.
Hrusovsky’s strategy has paid off. In March 2016, Quanterix raised $46 million, 90 percent of which came from new investors. That raise pushed the company’s valuation to $210 million. Revenues also have been growing. In 2014, the year Hrusovsky joined, Quanterix made $4 million. “This year, we’re projecting that we’ll get $19 million or greater,” he says.
Making healthcare more user-friendly
“My father said I should be an actuary, because they rule the world,” says Steve Auerbach. He didn’t take that advice, but instead went into the healthcare business, working at giants like United Healthcare as well as smaller, entrepreneurial companies.
In 2014, Auerbach joined Alegeus. “It’s really a unique company. It’s one of the few that really helps consumers figure out how to pay for their healthcare,” he says. “You just have to tie it a family member to understand the struggle people are going through to try and save for their healthcare. It’s probably the number-one challenge for people.”
Auerbach was also attracted to Alegeus because he thought the company had enough size and scale to actually have an impact on the problem of healthcare costs. Annually, Alegeus handles about 30 million consumers and $10 billion in healthcare spending, he says.
The Alegeus platform aims to provide clarity about the options consumers have in covering their visits, procedures and medications. “We build an ecosystem and support network that helps consumers figure out what is the best account to pay for healthcare, and what is the right funding level from employer funds or their funds,” says Auerbach. The system sends out alerts notifying users, for example, when a new claim has appeared or when deposits have happened in one of their accounts.
“If we can tell that you haven’t had a flu shot yet, we may be able to alert you to a free flu shot from a partner,” says Auerbach. “Or in a more extreme situation, if you have a high-dollar claim because you had some medical condition happen, we can talk about our advocacy programs — how we can help review your claim and make sure you’re paying the right amount. We’re really trying to get healthcare to be more user-friendly.”