GE Backs Evidation Health to Tackle Digital Health

Xconomy San Francisco — 

[Updated 3/5/14 5:17 pm. See below.] Digital health is an amorphous category that can encompass everything from electronic health records to fitness apps. It’s been hard to grasp the real value of some of these technologies, as Xconomy’s Alex Lash examined in detail in October.

GE Ventures is trying to address that problem. The firm announced today that it is launching a new business called Evidation Health with a $6.2 million Series A investment. Evidation tries to use data and analytics about digital health products to show the actual value of those products, in comparison to the hype, according to newly christened CEO Deborah Kilpatrick.

GE Ventures, which itself launched in 2013, invested the Series A along with Asset Management Ventures and Rock Health, and first made the deal in January, according to a regulatory filing.

Not everything about Menlo Park, CA-based Evidation is new. The creation of Evidation has roots in a company called The Activity Exchange that was seed funded by Asset Management and Rock Health. GE created Evidation in 2014 and has merged it with The Activity Exchange. GE is now the majority shareholder. [Updated to clarify the relationship between The Activity Exchange and Evidation.]

Now, there are some new faces, such as Kilpatrick, an engineer by training and most recently the chief commercial officer at CardioDx. People from The Activity Exchange are staying on at Evidation, such as Christine Lemke, a cofounder and the head of product at The Activity Exchange, who will be the chief product officer.

The Activity Exchange “brought with them the ability to do predictive analytics around deploying successful digital medicine,” Kilpatrick said. “We brought with us our healthcare expertise and our relationship with GE Ventures.”

GE is naming Stanford Health Care, the university’s namesake academic health system, as a partner in the launch of Evidation, though it did not contribute financially. The idea for the company came out of a discussion between GE and Stanford Health Care, a spokeswoman said.

Founded in 2012, The Activity Exchange has been helping large health systems and drug developers such as Humana, Biogen Idec, and Sanofi, use predictive analytics to identify and deploy patient management strategies. Those clients are moving on to Evidation Health, Kilpatrick said.

Evidation is trying to quantify and validate the savings that digital health tools—from mobile health applications to wearable devices to smart phone attachments—actually generate when used by customers of its clients, said Lemke, the chief product officer. [Updates the description of what Evidation will do for clients.]

“We have digital technologies being deployed into the Humana population today to understand how you can influence healthy behavior and how you can deliver digital intervention in a way where their effectiveness is maximized in the population,” Kilpatrick said. Evidation will help its clients understand which digital health tools are best for their customers, and will also help the clients use them, she said.

Evidation will seek out further partnerships with both small and large businesses, Kilpatrick said. (See here for one of the few features written about The Activity Exchange.)

In 2014, digital health attracted $4 billion, according to Rock Health, the San Francisco seed investor and data provider. In that October article on the subject, my colleague Alex Lash sought out evidence of the value that digital health products bring, and had a tough time finding it. [Updated to provide full-year 2014 numbers.]

That digital health can be difficult to define is something that Kilpatrick says she and GE and Stanford wanted to help resolve.

“It’s sort of trying to describe the shifting sands of the Sahara,” Kilpatrick says. “We’re out trying to rationalize the digital health space in a way that actually provides value based on clinical and economic data backing up the marketing claims.”

For its part, GE Ventures launched to deploy more capital into startups—$150 million a year, to be exact. It was received with much fanfare, hiring notable venture capitalists, including Rowan Chapman, a former Mohr Davidow VC who is now joining Evidation’s board. GE Ventures currently has more than 60 portfolio companies in industries such as healthcare, energy, software, and advanced manufacturing, Chapman wrote in an e-mail.

“The advantage of being a part of GE is that you are able to gain a broader global perspective through multiple industries within GE,” Chapman wrote in the e-mail. “This has been very helpful in building out new and innovative business models, like Evidation Health.”

Kilpatrick said she was attracted to Evidation because of the commitment GE has shown.

“I am fully aware, in some ways having competed with it in part of my career, of the power and the breadth of the GE healthcare business,” Kilpatrick said. “GE brings a lot of institutional knowledge and expertise about healthcare systems around the world.”