MEMS Enable Distributed Healthcare
May 24, 2012, MEMS Business Forum, Santa Clara, CA—Shahin Farshchi a principal at Lux Capital Management looked at MEMS in healthcare. The MEMS has an evolving role in improving care, health, and well being.
Lux started in ’00 with a focus on health and energy. They have funded 20 companies and have 3 funds for early round funding. The total VC industry has been down since ’08, but is starting to come back, to the tune of $20B in funds raised in ’11 by 200 venture funds. Most of these funds are for later stage investments to reduce risk and increase returns. Venture investors want to see a 15-20 percent yield over a 5 year period.
The venture firms are looking for business opportunities that require a technology enabler. Healthcare is one area where costs in absolute terms and as a percentage of GNP are growing very fast. The aging of the population implies more diseases, and the overall population is exacerbating the situation. In the US, over 25 percent of the population is overweight, and one result is that diabetes and its attendant costs are skyrocketing.
In ’09, the US spent over $1T for chronic disease care. The top 5 percent of the ill cost half of that amount. As a result of those costs, the government is on a drive to change healthcare to a prevention focus and change treatments to reduce cost incentives and risk factors. Diabetes care costs 10 times what a healthy person costs for medical care.
The lower level of health is one contributor to the increases in healthcare costs. To put the cost increases in perspective, in ’66, Medicare spent $3B. Projections for Medicare costs in ’20 are $861B. The government is hoping that accountable care organizations will lead to cost reductions of $8B over 5 years. This will change the medical industry from a fee per procedure to a wellness focus with a percentage of the savings going back to the provider.
Now HMOs are evolving to become an ACO (accountable care organization) structure. The new structure needs more reports, and evaluations of procedures and chronic care results. The change will go to a payment per person from the older pay for a procedure. There are many regulations that need to be satisfied to become a ACO.
Some of the technologies for the new healthcare structures include electronic heath records to enable easier cross doctor information transfers. By sharing information on wellbeing and other related information, the physicians can anticipate and prevent diseases from becoming severe. One potential platform for these new records and functions is the smart phone.
By adding some additional sensors and diagnostic apps, the phone can host health and wellness monitoring and feedback functions. This capability will enable data-driven health decisions that are proactive versus the reactive responses available today. Tracking key body and fluid parameters on a continuous and real-time basis will improve diagnoses. The value of data comes from the sensors and communications. The next generation of bio-MEMS will be simpler to use, with increased accuracy and reliability.
Healthcare is broken, and the costs of treating diseases is growing too fast to manage. More data from sensors will help rein in costs. We are still developing metrics and have to deal with the provider and insurer issues, but technology-inspired savings are easily shared with both groups. The providers and payers need to map expenses to specific problems and costs.
