Two trends are driving the current job market: globalization, where everybody is becoming part of the economy, and innovation, which increases productivity and allows fewer people to do the same jobs. These two trends will not slow down during the next few decades. How should students train in college to build careers under these conditions?

The situation is similar to 150 years ago, when 98 perecent of people farmed. Now we need only 2 percent of the population to look after the farms. The other 96 percent are engaged in businesses that did not exist 150 years ago. Similarly, the globalization of the workforce and the concurrent productivity gains will take care of people’s current needs. New graduates over the next decades will be part of businesses that don’t exist today.

What are these new businesses? We know that the world faces several big challenges such as energy, sustainability, poverty, education and healthcare. We need to solve these problems, but no one is sure how they will lead to specific businesses. This is the challenge and the opportunity for new graduates.

New graduates who want to be players in the new economy will need a strong work ethic, rigor in their thought process, and entrepreneurial energy. In the old economy, individuals mastered a specific skill and practiced it over the course of a 50-year career. In the next 50 years, new graduates will probably change their field of practice every 10 years. They need a good work ethic to be able to learn new things. They need rigor in their thought process to learn to learn. They need to be flexible and be entrepreneurial to adapt to new businesses.

No matter what students study, whether it is technology, journalism, art, medicine, business, or law, they will have to be entrepreneurial to survive and prosper in the next 50 years. In universities they learn to solve problems. In addition to solving problems posed by others, students need to learn how to pick problems that they are passionate about solving. A big part of being an entrepreneur is to learn to pick problems that you want to solve.

I am a big believer that students should create experiential learning opportunities during their university years. They should treat the whole world and its problems as their laboratory, as opposed to confining themselves to their campuses. Picking a problem that they feel passionate about and finding a way to solve it builds confidence and gives students a taste of taking charge. New graduates have to be entrepreneurial and innovative in creating opportunities for themselves as opposed to waiting for others to do it for them.

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More than anything, they should be studying math, including statistics and probability, and programming. No matter what the subject, we will have huge amounts of data about it, and will need these tools to get meaning from the data. The areas I’m thinking of include medicine, genetics, nutrition, and neuroscience; human behavior; energy management and consumption; materials science (so that we can use our personal 3D printers more effectively); aerospace and cosmology (so we can find asteroids, whether to deflect them from an earth-bound path, to mine them of valuable minerals or terraform them for human habitation); and of course biology, so that we can enjoy the company of animals, grow food, and ultimately create human-friendly living conditions on other planets and asteroids. It would also be great to get better at modeling and managing economic fluctuations!

But in the meantime, don’t forget to read world literature so you can understand your place in history and know how to be a human being.

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The impact of information-based technologies will continue to grow—probably at an accelerating rate. In nearly every segment of society, we see both quality and productivity improvements because of increased use of automation and digital communication. The impact is obviously huge in some sectors such as finance and publishing. And it will only grow in the laggards, such as education and healthcare, despite the immense challenges due to inertia, privacy, and access.

There will be great change in smaller areas also. I was just reading a journal on digital archaeology, to which I hadn’t previously given much thought, and I was astounded by the role information technology can play. As another somewhat less common application of information technology, Google has sponsored significant Research in the Digital Humanities (using statistical data from our large Books corpus), with the promise of proving entirely new research paradigms. (See Culturomics 2.0 for more.) Finally, the mobile application stores are filled with a surprising variety of applications in a variety of domains, where we might not have thought information technology could play a role.

So, this leads to a natural implication for students: Make sure you deeply understand information technology. This doesn’t mean just understanding how to use a search engine or a word processor. It doesn’t mean that you have spent years playing computer games or using social networks. It means instead developing an understanding of the basics of computer science (which includes at least some programming in a programming language of your choice). It means also that, that no matter what your field of study, you should focus on learning where computer science will hybridize with it to produce great progress. For many years, I’ve argued that the action in most disciplines, X, will be at the front line where computer science meets that discipline: In short-hand CS + X, for all X.

For at least another 50 years, the greatest intellectual challenges and economic value will arise from the hybridization of disciplines. So, by all means follow your passions: study biology, philosophy, medicine, education, economics, music, etc. But combine that study with a healthy portion of computer science.

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I think learning the fundamentals of a discipline is the most important thing that students can do to prepare themselves for jobs both today and tomorrow. That discipline may be biology, bioengineering, chemistry, chemical engineering or others. I also think doing research is great preparatory experience. Furthermore, I believe the opportunities offered by the convergence between biology, medicine, and engineering are rapidly increasing.

Thus, courses and research at this interface may be increasingly attractive. At MIT, for example, training at the Koch Institute for Integrative Cancer Research or the Broad Institute or the Harvard-MIT Health Sciences and Technology Program may be very helpful. At many universities, there are also special programs or activities that students can be involved in that may be useful. At MIT such programs include the $100K business plan competition. At Stanford they have a Biodesign Program. Finally, summer jobs in companies involved in biotech or pharma or medical devices can offer great experiences.

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[Editor's note: As a New Year's exercise, we asked a select group of Xconomists to answer this question: "What's the craziest idea out there that just might succeed?"]

Reinventing the absolutely dysfunctional healthcare delivery system in the U.S. It is a daunting idea, as it requires major changes in 100 years worth of doctor and patient behavior, as well as an enormous shift in our healthcare payments ecosystem. Why might it succeed? We have no choice. If it does not change, the “American Dream” is over – and we now have the tools to do it. What will be the underpinnings of this change? Firstly, turning people into consumers of healthcare—where they investigate, compare, and shop for services with an eye towards the most efficient use of resources (time, money, etc.) for the best outcome; and secondly, evolving the way in which we pay for healthcare from a pay-for-volume approach to a pay-for-outcomes approach.

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Last year about this time of year I wrote a parody of ‘Twas the Night Before Christmas about the coming of healthcare IT and meaningful use. I decided to make these holiday parody songs an annual event. I figure I have years of material, as there are so many ways of ruining an otherwise joyous holiday gem by mixing it with healthcare and public policy.

This year’s victim, Santa Claus is Coming to Town, was written by J. Fred Coots and Haven Gillespie in 1934. The original lyrics to the song can be found here. The song is a little weird because it lets kids know that Santa Claus is watching them all the time like some sort of red velvet-clad big brother machine. If the children aren’t good they won’t get any presents for Christmas, so the song has the extra-added attraction of veiled threat. Kind of reminded me of what’s happening with health reform and the Patient Protection and Affordable Care Act (PPACA). For those in the healthcare industry, there is definitely a feeling the eyes of government are upon them. Insurers, employers, medical device and drug manufacturers had all better watch out or the best thing PPACA is going to leave them come 2014 is a lump of coal.

Note: for purposes of this song, PPACA is pronounced PEE-Packa

PPACA Is Coming To Town

Oh,
The doctors will pout
The Demos whine
The health plans will shout
I’m telling you why
PPACA is coming to town

Hospitals get dissed
By patients checking-in twice
Payers won’t find the profit caps nice
PPACA is coming to town

And all the states are freaking
’bout the individual mandate
Here’s hoping an exchange is good
For the ones health plans forsake

Consumers scream out
“You can’t force me to buy”
Republicans shout
“We’re all gonna die!”
PPACA is coming to town

New taxes mount
On drugs and new knees
Everyone pays
In two thousand fourteen
PPACA is coming to town

Court-watchers doubt
The Supremes can soon find
A way to uphold
And not to unwind
PPACA is coming to town

And CMS is hoping
ACOs will light the way
But CFOs are choking
Bundled payments make them pray

We all better hope
What we get from D.C.
Will drive quality up
And get costs to decrease

PPACA is coming to town!

And in case you forgot the tune, here is a version of the original song sung by the great Frank Sinatra

Happy Holidays everyone! And to all my Jewish friends, sorry about the Christmas song bias…not much you can do with Dreidel, Dreidel, Dreidel.

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“Healthcare is broken. Insurance companies are innovatively bankrupt. There are huge hurdles to entry. The biggest companies in the world can’t solve this problem; even Google can’t build a good personal health record system. Doctors are frugal. Patients are lazy and don’t care about their health. You guys are choosing a very hard path.”

Such was the litany from Ryan Howard, the CEO of San Francisco-based Practice Fusion, who was trying to give some frank advice to a group of budding healthcare entrepreneurs at an event in Mountain View this September.

So, given those harsh realities, what possessed Howard to spend the last six years building a free electronic health record system for small physician practices?

“If I die tomorrow I don’t want my headstone to say ‘Made more money for Wal-Mart,’” Howard says. “I want to have someone, somewhere benefiting from my work, and healthcare felt very powerful for me.”

The idea of digitizing patient records—and, ultimately, connecting them with lab data, prescription systems, and insurance and reimbursement records—is indeed a powerful one. In fact, it’s been beckoning innovators for nearly half a century. One of the oldest multi-user database-driven computer languages in the world is MUMPS, written at Massachusetts General Hospital in 1966 to store health records. It’s still in use today—which tells you something about the power of tradition in this field.

Practice Fusion CEO Ryan Howard

But the pace of change is finally picking up, thanks in part to a system of carrots and sticks built into the 2009 federal stimulus package to spur adoption of electronic health records (EHRs). Doctors who implement EHRs in their practices before 2015 are eligible for up to $44,000 in extra payments from Medicare; if they don’t convert by then, the reimbursements they get from Medicare will be docked by 1 to 3 percent. Dozens of companies, from giants like General Electric to tiny startups like Y Combinator-backed DrChrono, are jumping into the market created by the incentive scheme.

But Practice Fusion may be the fastest-growing of the whole bunch. The company says its Web-based EHR has more than 100,000 users, with a cumulative 25 million patients under their care. The 110-employee company has raised roughly $34 million in venture support—most of it in a big April round led by Peter Thiel’s Founders Fund—and it has nearly doubled its head count in the last six months. In anticipation of further growth, it’s about to move into a huge, 46,000-square-foot space in San Francisco’s Union Square.

The technology so many practices are snapping up isn’t simply a database for patient records—that would be like repurposing Salesforce.com for doctor’s offices, Howard says. The much harder thing to build, and one of the main benefits emphasized by Practice Fusion in its marketing pitches, is its system’s behind-the-scenes connections to pharmacies, labs, and billing services, meaning doctors can get more done directly from the system’s Web-based interface.

But the biggest selling point for Practice Fusion—and the factor explaining its rocket-like growth—is that it’s completely free to doctors. The startup makes money not in the usual ways for enterprise software companies—subscriptions, consulting, training, support—but by showing ads in the browser alongside patient data.

Most of the ads are from pharmaceutical companies, as you might expect, and doctors who don’t like them can pay $100 per month for an ad-free version. But few bother. It turns out that the right price for an EHR system is no price.

Howard says it took some doing to convince his board and investors that the company should make the service free—but that it turned out to be the best decision the company has ever … Next Page »

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I spent the early part of this week attending the Cleveland Clinic Medical Innovation Summit and, despite the fact that the Cleveland Clinic stubbornly insists on holding its conference in Cleveland (aka The Mistake on the Lake), it was well worth attending.

Cleveland is an interesting town. Once upon a time, when old white men roamed the earth in cars driven by chauffeurs, Cleveland was the nation’s fifth largest city and had the highest number of Fortune 500 headquarters of any US city. Today, the Cleveland Clinic is the largest employer in the city, which is known also for a river that used to spontaneously combust and the Rock and Roll Hall of Fame (the perfect song for this occasion is clearly Smoke on the Water). In a way Cleveland is the perfect place to honor aging rock stars, as they can pick up a statuette and an angioplasty on the same trip. By the way, the river doesn’t catch fire anymore I’m told. I was worried because the Clinic hosted a pretty impressive fireworks display over Lake Erie for their 1500 guests and no doubt most of us expected to see even more of a show as the embers hit the water.

Each year the conference has a specific clinical theme. This year’s theme was supposedly cardiology, but that was just a cover. The real theme of the conference, while not explicitly stated, was how the healthcare system is changing and how challenging the environment for innovation has become when it comes to medical devices. Yes, there were several talks about new approaches to treating heart patients and also those with peripheral vascular disease, but the most interesting discussions were focused elsewhere.

The conference audience, in addition to featuring lots of people from the Clinic itself, included the who’s-who of medical device companies, large and small, as well as many healthcare investors and innovators. Because there was so much content at the conference, I’m going to highlight just a few notable discussions and quotes, many of which were made by some pretty high profile folk.

One of the most prevalent themes of the conference was how the confluence of policy changes and economic drivers has changed the locus of control in healthcare from the providers to the payers. It’s not unusual to hear a bunch of doctors complaining how the payers, by which I mean mainly the large insurance companies and CMS, are taking control of the world and ruining medicine. I am pretty sure that this is what physicians who are romancing other physicians whisper in each others’ ears, “Darling, I love you, and don’t health insurers piss you off!?” What was weird was that there was not a single such payer in the room to debate this issue or even defend their alleged hijacking of the system. Not one. No United Healthcare, no Aetna, no CMS (from the payment side-the Innovation Center got to speak at the end of the last day), no one. I thought this was a pretty big oversight.

Moreover, there was not a meaningful acknowledgement by any of the very large employers there, except Xerox and GE, that they themselves are really the large payers that are getting murdered by rising healthcare costs. The CEOs of Medtronic, St. Jude, Pfizer, Abbott and Merck, all of whom were there, must have to fight to keep their own heads from exploding when it comes to how they think about rising healthcare costs. Selling more stuff at high prices grows their top line revenue but … Next Page »

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We are limited, not by our abilities, but by our vision. —Ralph Waldo Emerson

In a world thick with healthcare conferences, MedtechVision, held September 15-16 at the Rosewood Hotel in Menlo Park, CA, stood out, both for its quality of content and for its participants.

“I hadn’t given any thought to the fact that it was theoretically a ‘women’s conference’ before I walked into the room. I’d just promised the organizer, a friend, that I would come,” said Vance Vanier, CEO of Navigenics. “But walking into the room full of women had quite an impact; I realized how much I stood out and it was worth noting. It made me realize what women experience when they go to events like this.”

Vanier was commenting on his experience as a male attendee at the conference, which was intended to provide a platform for the many women executives in the medical technology field to wield the microphone. Some 200 women and 3 intrepid men spent two days in a room hearing from some of the most influential and experienced provider, corporate, government and investment executives representing medical technology organizations nationwide.  If you are a man and reading this article, don’t run away yet. What was most notable about the conference overall was that it wasn’t for women and about women—rather it was intended to give a platform to executives who just happened to be women and who are rarely given a place at the microphone to talk about general medical technology issues that apply to the entire field. No “bikini medicine” here; this was a conference about health and business in a world where bringing new medical technology to market is getting ever more challenging.

Organized by Covidien, Abbott Vascular, and a number of other organizations with leadership roles in the field of medical technology, the conference gave healthcare executives a chance to come together to learn and problem-solve within this highly stressed and rapidly changing field. The presentations and panels covered emerging regulation and reimbursement issues as well as the challenges of nurturing medical technology companies in a rapidly changing healthcare industry. Not only was it unusual to see a conference like this where all of the experts were women, but it was also unusual to see a medical technology conference where the issues of cost and the need for evidence-based medicine were so closely coupled in the context of innovation.

Presenters and panel members, including executive representation from public and private companies, the FDA, numerous hospital systems, insurance carriers, and private equity firms, were all female, but it was their mountain of experience and knowledge that stood out, not their hairstyles. Keynote speakers included Ginger Graham, former CEO of Amylin Pharmaceuticals and former group chairman, Office of the President, Guidant Corp.; Bray Patrick-Lake, president & CEO of the PFO Research Foundation; and, Ellen Zane, president & CEO of Tufts Medical Center. Zane’s message to the audience was right on point: Providers must reduce needless variations in care, insurers must reform their administrative practices, employers must stop offering the world to employees while complaining about costs, governments must pay adequately for needed care, and consumers must take responsibility for their own behavior when it comes to their health. Without great advances toward these goals, Zane noted, the healthcare system cannot evolve beyond its troubled state.

Particularly interesting were the pairings on panels that juxtaposed people on all sides of key issues. The reimbursement panel, featured medtech executives from Sonitus and Covidien, as well as the chief medical officer of CMS Region IX, Dr. Betsy Thompson, and Robin Cisneros, national director of medtech assessment for the Permanent Federation.  A key takeaway from this panel was the rising tension between payers’ desire to reimburse only for new products that demonstrably improve health outcomes and manufacturers’ desire to … Next Page »

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At the first DC to VC health IT forum organized by Morgenthaler Ventures last fall, Aneesh Chopra, the chief technology officer of the United States, called for more prize-based competitions to encourage innovation in healthcare and other sectors of the economy. So it’s pretty appropriate that this year’s edition of DC to VC is all about competition. The main event at the invitation-only showcase on Microsoft’s Silicon Valley campus on September 22 will be a face-off between 11 startups at the seed and Series A stages. They’ll all be vying for the judges’ approval and—even more importantly—the attention of investors.

“The best way to ensure that investments are made in this space is to show people the high-quality companies that are being formed,” says Rebecca Lynn, the Morgenthaler partner who leads the firm’s health IT investing team. “A competition lets us have access to a wide range of entrepreneurs and lets the best bubble to the top.”

On August 24, Morgenthaler published the list of 11 finalists culled from 117 entries, including six seed-stage finalists and five seeking Series A funding. Below we’ve got exclusive in-depth material on each company, including video summaries. They range from a company developing a mobile-phone attachment for inexpensive eye diagnostics to a mobile social network for surgeons to an online platform for cognitive behavioral therapy.

There’s no monetary prize at stake on September 22, but a panel of judges will rank their top choices based on quality of the startups’ presentations. The seed-stage judges include Enoch Choi, an urgent care physician at Palo Alto Medical Foundation; Robert Fassett, chief medical informatics officer at Oracle; Chaim Indig, CEO of Phreesia; Aydin Senkut, managing director of Felicis Ventures; and Jeff Tangney, CEO of Doximity. Series A judges include Brian Ascher, a partner at Venrock; Isaac Ciechanover, a partner at Kleiner Perkins; Tim Chang, a partner at Mayfield (and formerly with Norwest Venture Partners); Alex de Winter, a partner at Mohr Davidow Ventures; and Lynn herself.

“This competition is not so much about winning as it is having the opportunity to present your thoughts and ideas in front of a key audience,” says Lynn. “Even though you might not win first prize, you might be just the thing that some VC or angel investor in the crowd is looking for. Or there might be somebody who could be a great teammate or senior executive or advisor. It’s really all about the exposure and the connections.”

Lynn was part of a five-person committee from event sponsors Morgenthaler, Silicon Valley Bank, StartUp Health, and the Health 2.0 conference who sifted through the original entries in the competition, which was restricted to US entrepreneurs seeking seed or Series A funding. She says she was excited to see the entrants offering genuinely new solutions to old problems in medicine. “I was blown away by the quality” of the entries, Lynn says. “Everyone is talking about ‘How do we pay for healthcare?’ and that’s just the wrong question. What these companies focus on is how to fix healthcare, and that’s a very different question from how to pay for it. A lot of that is driving out the cost inefficiencies and the procedural inefficiencies, but if they can get these tools in the right hands—in some cases doctors, in some cases payers, in some cases patients—then we can actually fix it.”

On to the finalists. The text summaries, videos, and graphics were provided by the finalists themselves and are used by permission.

SEED STAGE

Careticker

Careticker is the world’s first platform that help patients plan in advance for a hospital or outpatient procedure. Patients on Careticker can register with providers, provide advance notice of their visit and coordinate all of the people, medical supplies and services they need to have a safe recovery at home. With Careticker’s web and mobile application, patients also can create group messaging accounts for receiving and sending messages from doctors, nurses and providers. Patients can coordinate with providers, schedule delivery of medical equipment and supplies, and receive pending status updates. Once at home, Careticker helps patients to manage all aspects of their follow-up care.

EyeNetra

Coming from MIT Media Lab, EyeNetra is the most affordable mobile eye diagnostic ever made. A combination of a mobile phone and a clip-on eyepiece, NETRA allows anyone to quickly measure their own eyes and get a prescription for glasses as well as a diagnosis for cataracts. Through mobile connectivity, our system allows users to easily access back end service providers and caregivers for consultation and treatment, enabling a complete solution from awareness to treatment. Our aim is to empower hundreds of millions around the globe by democratizing access to eye care.

Skimble

Skimble is powering the mobile wellness movement with a cross-platform ecosystem of fun and dynamic social coaching applications. Their latest title, Workout Trainer, is ranked top 10 in health & fitness on iPhone/iPad, and helps members get fit with multimedia workouts led by expert trainers. Skimble’s GPS Sports Tracker allows members to keep track of all their sports activities and share accomplishments with friends.

Surgichart

SurgiChart is a mobile, cloud-based, social-clinical network for surgeons to exchange relevant perioperative, case-centric information.

Telethrive

Telethrive provides patients an instant connection to doctors for a medical consultation using any telephone or computer with complete audio and video conferencing. With no appointments, no waiting, and 24/7 availability,Telethrive eliminates existing and systemic barriers to health care access. Telethrive provides its highly scalable and customizable platform to a variety of healthcare organizations looking to cut cost, improve patient access to care, and better manage the time of the healthcare professionals providing services. A prototype of the platform is currently available direct to consumers in 18 states through Ringadoc (www.ringadoc.com).

Viewics

Viewics is an analytics and business intelligence software company focused on hospitals. The Viewics Health Insighter cloud based platform caters to ancillary departments such as the laboratory, radiology and pharmacy which are key drivers of cost and clinical decision making within a hospital. Our solutions enable hospitals to drive enhanced operational, financial and clinical outcomes.

SERIES A STAGE

AbilTo

Started in 2008, AbilTo creates and delivers set-price, fixed-duration behavioral health programs – via videoconference – that address prevalent, treatable conditions – e.g., depression occurring after a heart attack. The company currently offers programs addressing conditions, such as depression, anxiety and ADHD, as well as life transitions – e.g., career return at the end of family leave. AbilTo’s unique approach has clear advantages over traditional approaches. First, providing remote service, improves access and attendance. There are no office visits. Second, quality service is assured. AbilTo recruits its own network of licensed therapists who utilize proprietary manuals that are based on best practices of cognitive therapy and allow for consistent progress tracking. Third, participants make rapid, positive behavioral changes because each participant works worth both a therapist and a behavioral coach. AbilTo currently offers Cardiac Health Forum to Aetnamembers and Momentum (family leave to career transition) as recently reported about in Forbes.

Axial Exchange

When a patient transitions between care settings, information gaps can drive up both costs and patient safety issues. The Agency for Healthcare Research and Quality has cited care transition as the single biggest risk in patient safety today. Axial solves this problem by providing proactive clinical summaries for patients that move into and out of hospitals — from ambulance transport arrivals at the emergency room to patients arriving at a primary care physician’s office for post-discharge treatment. Axial’s technology-approach bears more similarity to that of a modern consumer web startup than to that of traditional health IT vendor. Axial has a cloud-native, open source infrastructure that translates data and presents it via a consumer-like experience that accommodates virtually any device with a Web browser.

Empower Interactive

Empower’s online services deliver proven psychotherapy methodologies via an e-learning platform to greatly improve the economics and accessibility of solutions for mental and behavioral health, starting with depression and anxiety. The underlying Empower platform generates customized learning experiences for each user based on Cognitive-Behavior Therapy (CBT) with content including videos, text, quizzes and interactive exercises. Clinicians can be assigned various levels of access to each user, as appropriate, to track individual progress. Overall, the program’s structure ensures that end users will benefit from cost-effective, evidence-based methods to help them improve their psychological well-being.

Jiff

Jiff, which plans to remain in stealth mode until September 22, has created the first HIPAA-compliant iPad platform for patient communication and education—used by doctors, nurses, patients and more. Jiff chairman James Currier is a serial consumer Internet entrepreneur who co-founded WonderHill, a social gaming company, which registered over 30 million people and was acquired in late 2010. In 1999, James founded Tickle, which became the world’s largest self-assessment company, registering 100 million people. Tickle became the 18th largest website in the world and was acquired by Monster.com in 2004. James also co-runs Ooga Labs, an investment and incubation company in Palo Alto.

YourNurseIsOn.com

YourNurseIsOn.com is a health care staff communications company that allows the health care industry to instantly allocate staff and providers where and when they are needed by two-way phone, text and email messaging. Instead of calling staff one by one, 30 people per hour, YourNurseIsOn.com can contact dozens of providers, and have answers in seconds, saving both time and money while improving patient outcomes. CLICK: Instantly contact and confirm your staff by multiple communication methods, including 2-way text, phone and email on any device. CONTACT: For open shift coverage, routine and emergency communications, compliance communications and continuity of operations. CONFIRM: The YNIO communications platform recognizes staff members’ responses and responds appropriately. RESULTS: YourNurseIsOn.com saves time and money while improving patient outcomes and staff satisfaction

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San Mateo, CA-based Epocrates, a provider of medical reference apps for mobile devices, has long been working on a full electronic health records system for physicians’ offices. This week the company announced that the “first phase” of its EHR system is available. It’s a Web- and mobile-based system tailored for practices with 10 or fewer physicians and includes features such as patient notes, lab results, e-prescriptions, and drug information. Epocrates said that it plans to add features over time that would allow practices using its system to qualify for government incentive payments under the “meaningful use” provisions of the Health Information Technology for Economic and Clinical Health (HITECH) Act.

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A mobile app developed by a pair of former UCSF medical students could help doctors collect more accurate medical histories from patients, even if they don’t speak the same language. Called MediBabble, the free, donation-supported iPhone app lets doctors play common medical questions aloud in five languages: Cantonese, Haitian Creole, Mandaran, Russian, and Spanish. Patients can respond via yes/no answers, gestures, or scrolling on the device. Alex Blau, who began developin the app three years ago with fellow medical student Brad Cohn, says the app can help doctors get through the crucial medical history portion of a patient encounter faster and more accurately despite language barriers. “Ninety percent of diagnoses come from the patient’s self-reported medical history, so the ability to communicate is critical,” Blau says in a feature posted this week at UCSF’s website. “Time is not an asset doctors or patients have. You need that information when you need it,”

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LinkedIn founder and CEO Reid Hoffman likes to say that in the world of social media, Facebook is the backyard barbeque, MySpace is the dark nightclub, and LinkedIn is the office. To continue the metaphor, Twitter is the corner soapbox—and Doximity, a new social networking tool for physicians, wants to be the hospital.

Or so says Jeff Tangney, founder and CEO of the San Mateo, CA-based startup, which raised $10.8 million in Series A funding this spring from Emergence Capital Partners and Interwest Partners. Tangney was the longtime president and chief operating officer at Epocrates (NASDAQ: EPOC), the provider of mobile drug reference tools that raised $86 million in a February IPO. And Doximity is what Epocrates probably would have been if smartphones had existed in 1999, when Tangney started the company: a combination medical directory, list maker, and secure messaging tool that runs on any iPhone or Android phone. He says the service is designed to help overcome the information barriers that currently make it difficult for doctors in different practices or hospitals to communicate about patient care.

“The goal we were trying to solve for doctors with Epocrates was the problem with medication errors,” Tangney told me recently. “No one can keep in their head all 3,000 drugs and how they interact with each other. ‘My peripheral brain’ was how one doc described it. In leaving Epocrates after being there for 10 years and getting the itch to do something entrepreneurial again, my physician friends and I saw that there is this next big problem in healthcare that can be solved by these super-connected devices like the iPhone, and that is the communication problem.”

Jeff Tangney

The average primary care physician in the United States refers patients to 250 different specialists at 117 different practices and hospitals in a given year, according to Tangney. “Keeping in touch with all those specialists is very difficult,” he says. “I would argue that you need a LinkedIn-style directory and a way that you can securely send e-mail to other doctors. Unfortunately, many of the electronic medical record systems out there are very siloed.” To get his son’s medical records from Stanford Hospital to the Palo Alto Medical Foundation less than a mile away, for example, the documents had to be printed out and faxed, even though both organizations use the same electronic health record system, Tangney says. “So I don’t think you can rely on the corporate level to make this work.”

On the up side, nearly 80 percent of U.S. physicians own a smartphone, according to Manhattan Research (and 30 percent already have an iPad). That gives them a platform for bypassing the existing IT infrastructure in their practices or hospitals and communicating with one another directly. All they need is messaging software that complies with the federal health privacy guidelines known as HIPAA—which Doximity does, according to Tangney.

Here’s a video overview of Doximity from Tangney; story continues after video.

… Next Page »

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Talking about health insurance is a good way to clear a room. It is a rare person who is excited to interact with their insurance company or who can understand the explanation of benefits they receive in the mail detailing all of the things that the insurance carrier has decided not to pay on their behalf. According to JD Power and Associates, only four out of ten people fully understand their health benefit plan. No doubt those four are also able to read the Dead Sea Scrolls in their original text.

JD Power also found that consumers rank health insurers at 710 on a 1000-point scale, a number heading downhill faster than Lindsey Vonn. In contrast, consumers rank homeowners insurance carriers at 750 on a 1000-point scale and auto insurers at 837. Nothing like being last place in the league: just ask the Minnesota Twins.

“So what am I supposed to do about it?” you might say. “My employer gives me whatever insurance they want to give me and I have little say in it.” We as consumers have become accustomed to paying (through paycheck deductions and lower wages) for a service we dislike but over which we have little control and even less affection.

Well that world is about to change—maybe not for everyone, but for many. Whereas our selection of what health insurance plan to use has been more like picking which monopolistic cable company to connect with, the advent of healthcare reform, and especially the provisions of the Patient Protection and Affordable Care Act (PPACA) that go into effect in 2014, may well put the consumer in the driver’s seat. In fact, Psilos Group, the healthcare investment firm to which I pledge my allegiance, believes that healthcare reform will have a much greater impact on businesses and consumers than originally predicted, accelerating a sweeping change among health insurers toward consumer-oriented business models and totally different distribution channels, partnerships, and technology solutions. We released a 2011 Healthcare Outlook Report earlier this week that details the expected changes and illuminates the key issues that face the healthcare industry as PPACA becomes reality. You can access the full Psilos Group report for free by clicking here.

One of most significant changes in the health insurance realm will be that more and more Americans—including millions of corporate employees as well as the previously uninsured—will begin shopping for their own health insurance via a new landscape of Internet and call center-based public and private healthcare insurance exchanges. These will function as shopping hubs to connect individual consumers with a choice of insurance products, supported by a broad network of insurance brokers who serve as agents to the consumer. The result is expected to be a doubling or tripling of the market for individual insurance today from about 10 percent to between 20 to 40 percent of the commercial market in coming years, according to industry experts such as McKinsey & Company.

Given this backdrop, health insurers will have to shift their approach from a traditional business-to-business sale to a business-to-consumer model to garner a share of this new market. Like other consumer-oriented companies, health insurers will need to differentiate their offerings based on cost, quality, customization, and service. To survive this paradigm shift and introduce the operational efficiencies essential to avoiding the fate of Blockbuster in a Netflix world, health insurance leaders are going to need to make a quantum leap forward in the use of technology to transform their businesses.

Healthcare and information technology were rarely uttered in the same sentence 10 years ago, unless eye-rolling was involved. While all of the large insurance carriers have a plethora of information systems within their walls, they historically have not been viewed as … Next Page »

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When is too much information worse than none at all? When it comes to health advice on the Internet, apparently. Databases like PubMed, health-oriented social networking sites such as PatientsLikeMe, and consumer sites like WebMD, HealthCentral, and RevolutionHealth offer an enormous flood of data about diseases, symptoms, and treatments. Yet according to a study last year from the Pew Internet & American Life Project, 60 percent of healthy adults feel that they get either minor help or no help when they search for health information online. The percentages are even worse among adults with chronic health conditions—67 percent say the Internet offers minor help or no help.

Ron Gutman, a serial health entrepreneur based in Palo Alto, CA, thinks he knows what the problem is. He says the previous generation of health websites fails to help most visitors because they aren’t personalized. (Gutman’s last startup, Wellsphere, was purchased by HealthCentral in 2009.) “Ten people can go to Google or Wellsphere, and they’re all very different—one is old, one is young, one is a woman, one is a man, one might have cancer, one might be healthy—and if they all ask the same question they are all going to get the same results,” Gutman says. “Which doesn’t make any sense. Although there is an overwhelming amount of information, it is never personalized to them, so they just get more confused.”

Gutman is trying to bridge the personalization gap with his latest venture, HealthTap. Opened to public beta testing today, the site is built around a massive tree of increasingly specific questions about users’ symptoms. As visitors answers more questions, they’re ultimately guided to potential diagnoses and relevant health tips authored by the site’s network of physician contributors. To increase the accuracy of the system, users can also upload information about their age, gender, allergies, medications, and other health conditions. All of this information remains private, and can be removed at any time.

The idea behind HealthTap isn’t to help visitors self-diagnose that ache in their side or that lump under their skin, Gutman emphasizes—it’s simply to help connect them with trusted physicians and prepare them to ask smarter questions when they get to the doctor’s office. “We are not building technology to replace physicians, but to empower patients to find information in collaboration with physicians,” says the CEO. In fact, a big part of the site is devoted to Facebook-like profiles for individual physicians, who can answer questions and upload short health tips. Users can contact doctors directly through the site, and doctors can refer patients to their pages on the site for supplemental information—which turns HealthTap into a combination lead-generation engine and pamphlet counter for medical practices. In an essay for Forbes, published yesterday, Gutman calls the site a harbinger of a new era of “interactive health.”

At launch, HealthTap’s resources are geared toward a very specific population: pregnant women and moms with infant children. The extensive question-and-answer trees that the company has prepared—which help users zero in on specific health concerns by asking them the same types of questions a doctor might—pertain entirely to pregnancy and the first year of life, and most of the 550 physicians the company has recruited to answer health questions are obstetricians, gynecologists, and pediatricians. So if you’re not pregnant, nursing, or under 1 year old, you probably won’t get much out of the site until it expands to cover other groups and conditions. (Gutman says it’s a huge task to recruit physicians and to convert state-of-the art medical knowledge from peer-reviewed research papers into the decision trees. Basically, if the startup had tried from the outset to cover every health problem imaginable, it would never have launched.)

There’s a lot to explore in the HealthTap site. For a quick overview, I recommend watching this short video walk-through of the site, which I recorded last week with Gutman. (Article continues after video.)

In three separate interviews with Gutman, I’ve gotten a pretty good look inside HealthTap, and I think the company can justifiably claim, as it does in the announcement today, that it has built “the first interactive expert health companion.” By using Hunch-style decision trees to … Next Page »

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If your name is Borya Shakhnovich, people tend to make assumptions about you. One, they don’t want to play you in competitive chess. Two, they wouldn’t be terribly surprised if you introduced yourself by saying something like, “I am scientist.”

OK, I’m stereotyping here (a real time-saver, I know), but at least one of those assumptions has some basis in fact. Shakhnovich is the founder and CEO of Brookline, MA-based iAMscientist, a global community and resource site for researchers and institutions in science, technology, and medicine. He has raised $1 million in seed financing from angel investors including George Whitesides, the famed Harvard University chemist and co-founder of more than a dozen companies including Genzyme (which was acquired last week by Sanofi-Aventis for some $20 billion).

What iAMscientist does is give researchers and institutions some interesting new tools to connect with each other. The idea is to create an online community and directory of top-tier people so that research teams, companies, and other organizations can find the right person to answer a difficult question, decipher a new paper, or lead a research project. All of this is especially important for interdisciplinary ventures—like when biologists team up with physicists, computer scientists, or electrical engineers to model things like genetic pathways or disease mechanisms, and then someone wants to commercialize the findings.

“We provide an organization with the ability to find that one person who is the foremost expert in an obscure area—our value is in that matching mechanism,” Shakhnovich says. Some of the most valuable knowledge and experience that researchers have “isn’t really in their papers, it’s in their heads,” he says. “You want to get in touch with them and maintain a relationship.”

Academic social networks are not new, of course. Services like Academia.edu, Epernicus (Boston-based), Labmeeting (founded by a Harvard grad), Nature Network, Pronetos, ResearchGate (which started in Boston but recently moved to Germany), and, to some extent, LinkedIn, all help … Next Page »

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Redwood City, CA-based AcelRx Pharmaceuticals, which filed paperwork last November for an initial public offering on the Nasdaq exchange, set its IPO terms in an updated regulatory filing yesterday. The company, which is developing oral pain-control medications as a replacement for patient-controlled intravenous pain treatments in hospitals, said it hopes to sell 5.77 million shares of common stock for $12 and $14 per share, bringing in up to $81 million in working capital. Alta Partners, Kaiser Permanente Ventures, Pinnacle Ventures, Skyline Ventures, and Three Arch Partners have put more than $66 million into the five-year-old company.

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Sproxil has been a bit of a darling of tech business plan competitions in the last six months. We first heard about the company, which started in Somerville, MA, and has developed technology to intercept medicine counterfeiters in developing nations, when it won IBM’s SmartCamp competition in June, taking home 12 weeks of mentoring from Big Blue and coaching from TechStars.

The startup, founded in 2009, went on to the global version of the competition in Dublin last November, where it nabbed an honorable mention, chief financial officer Alden Zecha told me. It also made it to the final set of 26 companies in the inaugural MassChallenge competition, and took away $10,000 for the people’s choice award at the Accelerate Michigan Innovation Competition last month.

Sproxil’s mobile product authentication technology aims to help consumers spot the fake versions of medications they’re about to buy, a rampant problem in developing nations. It provides pharma customers with product packaging codes, which prospective customers text to Sproxil. The company then confirms the validity of the medicine with a product description if it’s the real thing or with a warning message if the code doesn’t match up. It launched its pilot program in Nigeria last February with Biofem, Merck KGaA’s sole distributor in the country.

Now, less than a year later, it’s about to roll out its service with more of the globe’s five big pharma companies, and is expanding to a few more developing nations in Africa. The company isn’t yet ready to announce either its partner companies or new markets, as the product is still being finalized and it doesn’t want to give potential counterfeiters the heads up on which companies to target. Zecha says, though, that we can expect to get specifics in the next one to two months.

The company has become a go-to name in medication authentication in Nigeria, Zecha says. He can tell because the Sproxil customer service reps abroad have gotten calls from consumers concerned over the fact that a medication they’re about to buy is missing a code, flagging the fact that it’s counterfeit. “We sent inspectors who took appropriate action regarding the counterfeit product,” he says.

“Clearly consumers are aware of our solution and of the service we are providing,” Zecha says. “We’re definitely the market leader in this space and plan to stay the market leader as we expand.

Sproxil, which has operated off of founder money and prize winnings to date, has also “been out there pounding the pavement looking for investment funding,” Zecha says. If the Series A money comes in, it would like to add to its eight-person team, particularly in sales and marketing, developing, and customer service roles, he says. Sproxil, which has been enjoying the fruits of free office space from MassChallenge, is also looking for permanent space in the Boston area.

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It’s the beginning of the year—an opportune time to forecast how 2011 will unfold in healthcare. We are likely to see some surprises, such as the sharply rising importance of primary care physicians.

Here are some predictions about the new year:

• More consolidation is on its way in healthcare under Obamacare, which heightens the pressure to improve the efficiency of healthcare delivery. As part of this, more and more healthcare provider groups, even the small ones, will feel compelled to go electronic once and for all.

• Valuable new, cost-effective medical tools will begin to be widely embraced. One is telemedicine. Just imagine how much more effective doctors can be if they interact with patients remotely via cameras. The technology exists now, has been successfully used in a number of situations, and is not expensive. Soon insurance reimbursement models will permit and remunerate physicians for telemedicine “visits,” and then this will take off.

• The use of genetic testing to segment patient populations and better target therapies will be one of the fastest growing segments of healthcare as a new wave of accurate, clinically actionable tests hits the market.

• As health reform increasingly kicks in, there will be heightened emphasis on the importance of primary care physicians—a sharp contrast to the elevated importance of specialists for so many years. They will become the lynchpins of health care and make more pivotal care decisions as more than 30 million more people enter the healthcare system and require access to them.

• Time-saving technologies that lead to measurably better outcomes—such as shorter hospital stays, faster surgeries, and fewer complications—will fare well in 2011.

• Contrary to the opinion of countless skeptics, new California Governor Jerry Brown will be surprisingly effective and will fix many of the state’s woes. Under Brown, taxes will rise and spending will be far more controlled, and much of the crisis will finally be resolved. Why? Brown has been governor before and knows the ropes. And at the age of 72, he cares primarily about his legacy. What better legacy could he leave than being the man who fixed California’s seemingly insurmountable problems?

• I gleaned additional insight into Jerry Brown shortly after he was elected mayor of Oakland. He came to a reception hosted by Nat Goldhaber and to celebrate the IPO of startup Cybergold. Nat is another founder of Claremont Creek Ventures. I brought one of my children, then a baby, and asked Brown to pose with him for a picture. “I don’t do babies,” he responded. That was telling, and in a very good way. Brown is iron-willed man who does what he wants and what he thinks is best, not what he is told. He won’t be dissuaded from fixing California.

[Editor's Note: This is part of a series of posts from Xconomists and other technology and life sciences leaders from around the U.S. who are weighing in with the top surprises they've seen in their respective fields in the past year, or the major things to watch for in 2011.]

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Mountain View, CA-based Omnicell (NASDAQ: OMCL), a maker of systems that restrict and automate access to medications and anesthesia in hospitals, said today that it has acquired Pandora Data Systems of Scotts Valley, CA. Pandora makes software that analyzes hospital records to detect “medication diversion,” i.e. theft, and meet regulatory requirements. Terms of the deal were not disclosed. “Our partnership with the Omnicell team will allow us to continue our commitment to patient safety and help hospital systems meet the increasingly stringent requirements of the DEA,” Pandora CEO Jim Felich said in a statement.

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