Eyeing big $$$, tech titans Microsoft, IBM plunge into health care with snazzy startups; but will the docs buy in?

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The News:

Microsoft recently joined other tech giants IBM, Apple, and Alphabet (think Google) heralding a new initiative called Healthcare NExT which will combine work from existing industry players and its Research and AI units. The ambitious launch aims to help doctors reduce data-entry tasks, triage sick patients more efficiently and ease outpatient care.

@Microsoft launches new initiative called Healthcare NExT to increase doctors efficiency Click To Tweet

“I want to bring our research capabilities and our hyper-scale cloud to bear so our partners can have huge success in the healthcare world,” said Peter Lee, a Microsoft Research vice president who heads Healthcare NExT.

Steve’s Take:

My introduction to the healthcare industry began back in 1975 when I started working for the IRS division responsible for regulating nonprofit hospitals. It didn’t take long to figure out who was calling the shots when big-ticket items were being purchased, all the way from the latest (and hugely expensive) breakthroughs in technology to bottles of aspirin and bandages.

Hospitals, now as then, are fundamentally operated through a mostly benign relationship between two core constituencies: the administration and the medical staff. Both have their distinct roles in running a successful endeavor to care for patients.

But when the rubber meets the road, the doctors usually win the day. Not always, but usually. It’s crucial for hospital administration to keep the medical staff “happy,” or defections can lead to major reductions in the patient’s they may take with them and the associated billings that can wind up with arch rivals.

Pharma companies learned this lesson decades ago when trying to sell their products. Unless you’ve got a stranglehold on the market via an FDA monopoly, if there’s competition among several drugs to treat a particular illness, it’s all about persuading doctors to write the prescription for your offering and not a competitor’s.

Let’s look briefly at IBM’s experiment with Watson, which Microsoft and other tech icons are following closely to hopefully piggyback on its initial success.

Jo Best at ZDNet reports on a real-life situation typifying IBM Watson’s system for helping doctors diagnose the most rare and elusive illnesses faster by scanning through mountains of medical records to pull out only the relevant data.

“We don’t need more physicians, we need more IT power” says Dr. Jürgen Schäfer.

Dr. Jürgen Schäfer is in charge of tackling the most mysterious conditions that arrive at Germany-based Marburg Hospital’s Centre for the Rare and Undiagnosed Diseases. And he’s accustomed to solving seemingly intractable problems.

But now, Best relates, rather than identifying the illnesses that have baffled numerous doctors before him, Schäfer–sometimes called the German ‘Dr. House’–has worked out how to solve another thorny medical problem: how to treat a spiraling number of patients, each with a lengthy and complex health history, without employing a whole new team of doctors.

The answer, it turns out, is IBM’s cognitive computing system. Not long after its headline-making Jeopardy! win, Big Blue began retooling Watson for the healthcare industry, and it’s since been put to work on a number of healthcare applications, from cancer diagnosis to diabetes analytics.

Now, Marburg’s Centre for Rare and Undiagnosed Diseases has begun evaluating whether Watson has a role to play in helping identify conditions that doctors may only come across once in their careers.

Typically, the patients arriving at the centre may turn up with inch-thick medical records stuffed with unstructured data–X-rays, lab results, doctors’ notes, scans, and more–and have already passed through the hands of countless medical professionals before reaching Marburg. It could take the centre’s doctors days to probe through such records, trying to digest all the information they contain in order to arrive at a diagnosis.

“Once patients show up [at the centre], they are highly complex to get a handle on and we are busy for a couple of days just reviewing the paperwork,” Schäfer said. “It is clear to us that either we keep that old way of huge amounts of information on paper and work through it for days and days or weeks, or we set up a new system, where IT support screens the findings and gets out the information.”

The objective in the future is to feed all that information into Watson, and let the system crunch the data before arriving at a differential diagnosis–a list of potential illnesses that all fit the patient’s symptoms–which will be handed to human medical staff to work out which of those conditions the patient has. And, if Watson spots a seemingly anomalous result amidst all the data, it can highlight it so that doctors can follow it up (or disregard it and carry out the test again).

While Watson could theoretically aid further in the diagnosis by weighting each of the illnesses that make up the differential diagnosis according to their likelihood, Schäfer says there may be pitfalls to such an approach.

“We need to be sure that if Watson would supply the [likely condition], there is a concern that at the end the physician gives up thinking. ‘It’s 90% that it’s a myocardial infarction, that’s good enough’ but if it’s a one percent chance that it’s an aortic dissection, which is also a deadly disease, you take the risk that no one thinks about this. We are discussing currently if we want to use this feature.”

In the future, the system may also be used to make suggestions of further tests that could be carried out to pinpoint the diagnosis by ruling in or out certain conditions.

Currently, the system is being tested retrospectively on patients who have already visited the clinic and had their conditions identified to see how it performs.

The pilot will last for 12 months and if it proves successful it could be rolled out further across the five sites that Rhön Klinikum owns–including the University Hospital, the healthcare provider is responsible for 5,300 beds–in fields potentially including neurology, oncology, or emergency care.

Potentially, such remotely managed IT systems could be used as a starting point for the treatment of patients from remote areas where medical personnel are scarce, or locations that don’t have the right specialist for their conditions. Schäfer maintains however that IT systems are a support for highly-trained, enthusiastic physicians, not a replacement for them.

“We wouldn’t say Watson is better than a physician, we would say Watson is a good help for us, but we are in charge at the end of the day. We have to take care of our patients” says Schäfer.

On the other hand, Microsoft has tried to expand in health care before, with mixed results, Bloomberg points out. It had a Health Solutions Group for many years, but combined that into a joint venture with General Electric Co. Last year, it sold its stake to GE.

Microsoft unveiled its new effort ahead of the 2017 Healthcare Information and Management Systems Society conference, according to Bloomberg. The University of Pittsburgh Medical Center and Microsoft want to use things like speech and natural language recognition technology to replace manual data entry by doctors, Lee said.

Microsoft’s Israel office has taken the company’s chatbot technology to create a “triage bot” for digital health provider MDLIVE Inc. In a demo, a Microsoft researcher tells the bot her leg hurts. She connects the bot to her personal health account where it finds her prescriptions and confirms she’s taking birth control pills. It pulls up a picture of a leg and asks her to click where it hurts. The bot notes recent exercise from the researcher’s wearable device, while a scan of her calendar spots a recent airplane trip. The system calculates there’s a good chance she has a blood clot in her leg, and connects her to a nurse. It can also suggest doctors and answer insurance questions.

There’s also a new Microsoft project called HealthVault Insights that works with fitness bands, Bluetooth scales and other connected devices to make sure patients stick to their care plan when they leave the hospital or doctor’s office.

Many companies, like tech goliath Apple are developing similar technology. Last April, the company launched CareKit, an open software platform that can help people manage various medical conditions and share information with their doctors. Among the four apps released last spring is one that helps users manage their diabetes and one that people can use to track symptoms of depression.

“I think it’s the future,” says Arthur Caplan, a biomedical ethicist at New York University.

Apps that help people manage their health conditions, and provide information to their doctors or hospitals are almost inevitable–and that’s not a bad thing, he says.

But Apple may find that the healthcare management field is different from any of the other fields it attempted to shake up.

“The biggest challenge will be quality control and convincing doctors to use these apps,” Caplan says.

Physicians tend to be skeptical about anything that pegs itself as a way to reduce the time that patients have to meet with doctors face-to-face.

“Doctors are not the most tech savvy folks,” Caplan says. “So I think Apple had best be advised to go slow.”

Entrenched, legacy systems and rigorous regulation are also obstacles, said Malay Gandhi, co-founder of Ensemble Labs, which invests in healthcare startups, Bloomberg points out.

“The industry wasn’t built as a tech-enabled industry,” Mr. Gandhi said. Some large tech companies “are trying to sprinkle AI or machine learning over the top of existing systems and I view that as misguided.”

“We know health care will become more patient-focused, more cloud-based and that AI will make health care more data-driven. We just don’t know when and how it will come together,” Microsoft’s Lee said. “But we can position Microsoft to be there when all these changes happen.”

In closing, I’m reminded of the tech mantra, “fail fast and pivot faster.” Tech startup history is littered with pivots–when a company chucks its original product offering and changes direction, says TechCrunch.

And while too much pivoting can be a sign a startup is “thrashing in the shallows of the deadpool,” it can be the start of something big. In the healthcare industry, big means eye-popping riches.

The overriding question for these immensely successful technology powerhouses remains: how do we reach the doctors with our marketing message?

Steve's Take: For @Microsoft to succeed, they will have to reach and convince doctors Click To Tweet

Yes, direct-to-consumer advertising is incredibly popular. Everyone spends million on it. The caveat in healthcare, however, persists: if you can’t sell the docs, you’re products are DOA.

Having all learned their own, hard lessons in the healthcare startup arena, I wouldn’t count out any of the companies mentioned in this piece from becoming moderately to highly successful. They’ve each signaled a long-term commitment with their capital and none of them will take failure lightly.

On that you and your portfolio can rest assured.