Medify, Stocked with Farecast Vets, Digs Deep into Online Health Data
Saving money on a flight to visit your sick grandma is pretty easy these days. Finding out whether her doctor is using the latest treatment is another thing entirely. And piercing that veil in the healthcare delivery system is exactly what Seattle startup Medify is trying to do.
The airfare comparison is no accident, by the way—Medify has strong roots in Farecast, the travel price-predicting startup that was gobbled up by Microsoft in 2008 for a reported $115 million and incorporated into Bing’s travel search. Medify co-founder and technology chief Jay Bartot was an early employee at Farecast, and most of Medify’s development team came from Farecast as well, CEO and co-founder Derek Streat says.
Previously incubated at Seattle’s Voyager Capital, which is the company’s main investor, Medify has spent the past year digging deep into big sets of healthcare data. The fledgling company thinks it has a serious chance to make a difference in the market for health search, which the Pew Internet & American Life Project pegs as the third most popular online activity, behind only e-mail and general search.
“A year ago it was literally, ‘We’ve decided to work together, we’ve got some money, and we have a whiteboard,” Streat says. “Now, we think we’re on to something.”
That something is building a huge database of medical information that patients can tap through Medify’s website to search for treatments, experts, and hospitals that fit their own health needs. Medify is getting its data from Medline, an enormous collection of health information managed by the National Institutes of Health.
As you’d expect, there’s a ton of useful descriptions of diseases, conditions, and treatments there. But it’s not structured in a searchable way for consumers, and perhaps worse, it’s mostly rendered in technical language that your average person might not be able to decipher.
Medify’s data-mining process collects the studies and also culls them for useful top-line indicators—what kind of drug or treatment was used, how effective it was, the number of patients in the study, whether it targeted younger or older people, and more. Patients can search through the data to find useful trends, dive deep into the results, and display them in custom data visualizations.
Medify’s data plans don’t end with research papers. Eventually, the company plans to add anonymous data from insurance claims systems and electronic medical records, which will give a better picture on how patients move through the system over time. The company has raised $1.8 million overall in venture financing, and plans to open a new fundraising round next month.
As we wrote in an early profile last summer, Medify’s focus on healthcare data was driven by Streat’s own experience with his daughter, who was diagnosed with a life-threatening kidney disease.
Medify hasn’t started collecting revenue yet, working instead with a small test pool to refine its user product. If Medify can attract a large base of engaged patients, there’s certainly money to be made: Medify estimates that drug makers, health services companies, and heathcare providers spend around $10 billion a year marketing to consumers. And right now, Streat says, there’s not a lot of next-generation targeting behind that spending.
“The way most of that is done today is like in a time warp—it’s very old-line marketing. It’s plastering banner ads across WebMD, it’s traditional media with the big TV ads,” Streat says. “What doesn’t happen in the space right now, which we’ll be bringing to it, is the ability to put the consumer in front of a pharmaceutical company or service provider at the point where the consumer has gotten some good background on them.”
On the way to developing its consumer service—which is still in a beta mode and has some improvements coming in the next few months, Streat says—Medify actually stumbled onto another significant revenue stream in the professional subscription market for medical professionals.
“We’ve had a larger than expected number of professionals—doctors, medical researchers, etc.—look at what we have and say what we have is better than what they pay for right now to get information,” Streat says. “That professional subscription market is a pretty meaningful market as well.” Medify estimates that one competitor in that sector, UpToDate, has a $200-$300 million annual business in selling subscriptions to some 400,000 doctors nationwide.
Streat says working on Medify has given him and his partners a lot of insights into problems with the healthcare system, something the nation is nowhere near done wrestling with as health spending continues to eat up a disproportionate share of the economy and the Baby Boom generation speeds toward old age.
There are many companies out there trying to take on bigger slices of the healthcare system and make huge, systemic changes to things like the incentive systems for doctors and payment structures for insurance companies. Medify is content, Streat says, to tackle its slice—and thinks it can make a real difference.
“What we’ve decided to focus on is where people are already taking things into their own hands, and ground zero is online health search. That’s where the user has at least of a little bit of control,” he says. “And that’s where there’s an opportunity to really make change and do it in a way that people can do something with today, not that they can do something with two presidents down the road and a decade later when people have worked out healthcare reform … we’re about doing a revolution today, not 10 years from now.”