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start companies in this field. Piyxs, a San Diego company that DeGheest invested in, was sold to Cardinal Health for more than $900 million in 1996. The concept was to set up medication dispensing machines in hospitals that reduced medication errors, she says.
Most of what people call Health IT today is really about getting electronic record systems that run seamlessly together inside the hospital. Most of that effort involves things the patient never sees, DeGheest says. Healthtech, she says, will involve some of the mobile devices that are everywhere, like the iPhone or iPad, and combine their hardware and software with applications that can monitor patients with chronic health conditions to avoid the most costly interactions with the hospital.
All this, naturally, is much easier said than done. Actually making smart investments in a field like this, which crosses a number of boundaries, relies some heavy-duty networking across disciplines. It requires people who understand the medical aspects of certain diseases, the healthcare reimbursement landscape, enabling technologies in devices like smartphones, and consumer marketing. People from all these walks of life reside in a diverse innovation hub like Silicon Valley, but they don’t often network together, or even know much about each other’s issues, DeGheest says.
Healthtech Capital got started last June, DeGheest says. It has already recruited more than 40 members, and made its first investment. The typical angel group makes five to 10 investments per year, and she notes “we expect to do that, and more.” The group, like the well-known Life Science Angels, allows each member to decide if he or she wants to invest in a given company.
It’s obviously too early to say whether “Healthtech” will catch on as the preferred term for that whole 84 percent of the healthcare system that involves delivery of care, other than drugs and devices. I’m not sure DeGheest convinced me to give up my day job of covering these innovative new products for healthcare. But it will certainly be something to watch, as everyone gets powerful mobile phones that can run apps that can allow medical professionals to keep better track of patients on the go. Biotech evangelist extraordinaire Steve Burrill often likes to say we are moving into a “spit on your BlackBerry” world, referring to one idea for transmitting real-time data on gene expression to your physician.
Silicon Valley, the hotbed of biotech, consumer electronics, and entrepreneurial risk-takers, is one of the very few places with potential to create a “spit on your BlackBerry” kind of healthcare world. DeGheest and her cohorts are betting it will happen sooner rather than later.
“We can change the system and capitalize on a revolution in healthcare. We can’t afford to keep doing what we’re doing,” DeGheest says.
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