Nikki Festa sits down with Nick Dougherty and discusses MassChallenge, digital healthcare and its growth and development in the Boston area.

Nikki: Hi I’m Nikki Festa, vice president at PAN Communications. I’m here with Nick Dougherty, program director at PULSE@MassChallenge, to discuss the evolution and growth of digital healthcare in Boston. Nick, thanks so much for taking the time to connect today.

Nick: I’m so excited to be here.

Nikki: To kick things off, we’d love for you to give a brief overview of MassChallenge for some of our listeners who may not be familiar with the organization.

Nick: MassChallenge is a global startup accelerator program. Traditionally, we’ve accelerated companies across every industry, every vertical, we mostly work with “idea stage” and “early stage” startups to help them really get off the ground. I went through MassChallenge in 2013 with my startup VerbalCare and in a lot of ways it was like my crash course MBA program, but I still have so many of those mentors that were a part of my life then and are part of my life now. Ultimately, when we got acquired it was clear to me that challenge was just an incredible resource for us to be able to get off the ground. It’s just this amazing program that doesn’t take any equity from entrepreneurs, gives out millions of dollars every year and it’s really in the service of helping entrepreneurs.

Nikki: That’s excellent. What did VerbalCare do and who acquired them?

Nick: VerbalCare is a patient communication platform. We began by helping nonverbal patients communicate, and the organization that acquired us is MSD out of Stoughton, Massachusetts. They supply a lot of the home, fusion and oncology business out of the United States, and so it was a really fun opportunity to transition our products from a purely hospital solution into something that worked in the homes of people, where they could reorder their medical supplies, which is a real pain to do when you’re taking care of a complex condition and be able to communicate more effectively with the people that are caring for you.

Nikki: Would VerbalCare be good for ALS Patients?

Nick: One of the initial target markets for us is helping those with ALS. We first began by helping stroke patients who suffered from Aphasia to be able to communicate while in the hospital. After we were acquired, however, that part of the product was no longer supported, so it no longer does that. But it’s something that I’m still very passionate about and would be excited to see happen again in the future.

Nikki: That’s great. That was before Pulse at MassChallenge. Do you think that VerbalCare is part of the inspiration for them to create that cohort?

Nick: I don’t know and I think that would be a little presumptive of me to think that it was because of me. I absolutely don’t think that. How Pulse at MassChallenge came together was a lot of different members of the community coming together to make this a reality. So, you had the Mass Competitive Partnership MACP that is really excited about making Massachusetts a world leader. What they wanted to do was identify if there was an area where Massachusetts could really excel. They helped kick off the life sciences cluster. We’ve seen what that’s done to our local economy. And you know the amazing work that’s coming out of the Kendall Square area they said, OK, is there something else that we can do that is going to really set us apart? That’s something that we can do extremely well, that we have the resources, and the talent, and the institutions to be able to make this a leader? And they identified that digital health was that sector that we should focus on. So, Pulse is more of a manifestation of both what the state was looking for, and identifying digital health as an area where we could really excel. And I also think MassChallenge recognizes that traditionally starting a healthcare or healthcare technology company is challenging and maybe more challenging than some of the other companies that go through the program. So, having this as the first industry vertical program made a lot of sense.

Nikki: Definitely. And being a Boston-based company there’s no question that that’s what we’re known for. When do you think that the digital healthcare really started to grow? The digital component of healthcare is the new word on the street. So, can you give us a high-level overview of when that shift started to take place? And what do you think digital healthcare is?

Nick: I think that it began in earnest, or at least the most modern version of this definition of digital health. We used to have health IT and mHealth and all of these. I really think that it started when we mandated that everybody get electronic health records, and said that this is how we’re going to capture this information. When you had all these incentives available to adopt electronic health records, it really shifted the workflow, shifted the paradigm, shifted how we captured information, and how we build. It created this infrastructure that enabled digital health to be a reality. I remember when I started working on VerbalCare in 2011, we would talk with hospital CIOs and they would tell us, “Never in this hospital would there be a cloud-based technology.” That was in September 2011, and now you’d be hard pressed to find hospitals that don’t have cloud technologies on their roadmaps, or they’re not thinking about integrating with cloud technology. So, I’d say that even just the past couple of years we’ve seen a pretty amazing transformation in how the healthcare community looks at this kind of technology. I think you’ve heard digital health come up a lot more in the last 3-5 years, because it’s becoming something that your hospital CIOs and executive teams are realizing that they’re going to need to adopt it, and that there is an infrastructure in place to be able to support this. We’re still at a fairly early stage with digital health. I still think that we’re looking for a lot of great wins here. And, frankly, what’s been so cool about the Pulse program is that we’re seeing demonstrable wins and cost savings and revenue drivers that traditionally are lacking. You see a lot of really great stories, great solutions, and things that seem very obvious but they haven’t really been properly vetted or tested. So, I’m excited about where we’re at. We’re at a very early stage for what the potential is here, but the fact of the matter is, we’re starting to see some early wins, which is fantastic.

Nikki: That’s great. I didn’t want to interrupt you, but I think it’s actually crazy that hospitals in 2011 said they would never use cloud technology. That’s not that long ago, and every company in the world uses cloud technology – that’s bizarre to me.

Nick: So, maybe it is an anecdote. But we heard it a couple of times and the fact is that we’re clearly in a very different place. What we’re seeing is this exponential adoption of these kinds of technologies. We continue to move along this path towards value-based care and value-based purchasing, and the Affordable Care Act gets a lot of flak. But there’s a lot in Macra and MIPS and a lot of these other you know huge pieces, the Cures Act and all that, that is really geared toward driving these kind of alternative payment models. And what it means is that you have to be more efficient with the care that you’re delivering. It means that you have to deliver higher quality care and you have to measure it and report it. So, there’s a huge emphasis on data capture and using the data to drive higher quality care. And it’s not feasible by just throwing more humans at it. It’s not feasible by just throwing more paper and process at it. It just becomes really difficult to manage. The only way to unlock that is by using this technology that’s enhanced to a lot of other industries that we know of. With a lot of folks, traditionally where I’ve seen the challenges when it comes to adopting new technologies is that you’re drastically forcing the people that are delivering care to change their workflows, and that’s really where a lot of these technologies can fall flat. But if you’re enhancing an existing workflow, or you’re enabling people to deliver care better than they had previously been able to deliver care, then they’re super thrilled to use this technology. So, for the past five years we’ve been trying to figure out where digital health can really fit, and how digital health can be used to help solve some of these challenges. We’re right on this cusp of all this stuff actually working, and it’s starting to work and it’s really exciting to see that we’ve figured out some of these kinks – both with the infrastructure the underlying support network of the electronic health records – as well as the maturity of the technology that’s being built on top of it. It’s a really exciting time.

Nikki: Absolutely. I think it is a really exciting time from a location perspective, why do you think Boston is the epicenter for digital healthcare? And do you see other cities rolling the same way?

Nick: I see Boston as an epicenter because we have so much of the healthcare community all in one place. We have world class academic medical centers. We have incredible educational institutions. We have amazing industry leaders. We have this incredible startup community. So, you have all of these different components that come together that really drives change. And then on top of that, you have a government that is traditionally very excited about driving healthcare reform and healthcare change. You have this mass of people that are excited about healthcare, life sciences and delivering better care. In a lot of other cities, healthcare is important, but not the number one industry. If you go out to Silicon Valley, you’ll say OK that’s a tech tap. Yeah you have a lot of amazing healthcare in that town, but nobody would say Silicon Valley is the healthcare mecca. It’s the tech mecca – that’s what you would say first about that region. You go to New York – amazing healthcare technology that’s down there, but you wouldn’t necessarily say New York is a healthcare town. You’d say that it’s media, but probably more so it’s the financial sector. Whereas, if you come to Boston or Massachusetts, it’s pretty clear that healthcare is the industry. That is the thing that we’re most famous for, it’s the thing that we take the most pride in, and I think that cultural acceptance of healthcare and excitement around healthcare is something that not many cities really have. You could look to Nashville, and Minnesota, there’s some pockets there, but for the most part I would say that Boston, Massachusetts is the healthcare town and that is very much at our cultural roots.

Nikki: I always think it’s funny how Minnesota has the life science alley… why Minnesota?

Nick: I need to make a trip out there and I need to figure out more about it. I’ve met some incredible people from Minnesota doing amazing things. I’d love to get to know that area.

Nikki: Definitely. I know we talked a little bit about how things have changed over the years for digital healthcare, especially with cloud adoption. How much do you think even something as simple as the iPhone and apps growing, has changed the way we approach healthcare technology?

Nick: I worked at the Apple store around the time that the iPad came out, and for me what we would see is that people who had iPhones were then buying Macs, and once they bought Macs, they would refer their business to also purchase Macs. And then it would lead to these business sales. It’s not necessarily something that happens overnight. It takes time for those things to happen. I think what you see are these people that are growing accustomed to technology being a part of their everyday lives. People assume that their technology should work the way they expect it to. And, to this point, healthcare is lagging behind from a user experience, user interface perspective, to what they are used to in their outside world, and the types of functionality and speed at which they can access this kind of high quality technology. As a result, you’re seeing people that are asking for better technology and it’s creating a need. Not only do you have a market need you also have users that are demanding it.

Nikki: Absolutely. What’s great about it too, is that now the healthcare industry is really grabbing onto these kinds of technologies and realizing and looking for that user experience on the front end. But on the back end they’re also getting much better about how they use the data that they receive and using a much more data-driven healthcare approach – specially to help inform decisions they’re making with their patients and make predictive calls for the patient versus reacting. They already have that historical information from a data perspective. What do you see happening in the future with that kind of ability to have action-oriented data? And what do you think is next? There’s a lot of talk about artificial intelligence, machine learning, blockchain, which goes back to the data point.

Nick: So, to me I think a lot of it will help when we educate everyone in what artificial intelligence and machine learning truly means. I think a lot of people think that AI and machine learning is something that you just set and it learns on its own, and it just gets better, and then it will fix all of the problems. A lot of machine learning is teaching the machine to learn. It’s a very active and collaborative process to make it work for your institution and your workflows. I think the best solutions are the ones that are continuously updating with help from real life humans that help educate the machines on how to better perform. So, what’s exciting for us – having sat down and interact with these 31 amazing companies – some of them have really strong data components to what they’re doing and them going live with their pilot at the beginning of program versus what their technology is capable of towards the end of the program is night and day. A lot of that is because they have the right amount of data that can teach the program to be even better. So, my word of caution to people that think that AI and machine learning will solve all their problems, is that it’s just absolutely an unrealistic expectation that what you have to do is bring this machine through elementary school and then take them into middle school and high school and college and then they get to go to grad school. A lot of these technologies are in that early stage where they’re adding value, but they’re not adding their totally optimal value. And yes, it takes a little bit of risk to adopt some of this technology – but I’d say it’s worth it. The only way that technology is going to be able to add the value that you want it to add, is if you become an active participant and you teach this technology how to be better, and how to better serve you.

Nikki: I think that makes a lot of sense, and it is a bit of a foreshadowing piece as well, in terms of what’s going to be next for the healthcare industry.

Nick: Well we have to automate a lot. I remember when we were looking at some of these new regulations and new alternative payment models – if you want to capture some of this revenue, let’s say that your call center that has to validate a thousand patients a day and you’ve got three people on your staff. How are you going to do that? How are you going to validate those number of orders? There’s literally not enough time in the day to make the phone calls, let alone qualify them. Either you need to hire a ton more people, or you have to find a solution that really works for the patient. A lot of these patients that you’re calling are working 9:00 to 5:00, and you want to work 9:00 to 5:00. So, they don’t want to pick up the phone even when you’re making the phone calls – nobody’s picking up. It’s a bad experience on both sides, it’s costly, you’re not necessarily working the top of your certification, having a nurse making all these phone calls. There’s things that we just need to do better. Having an algorithm or something that can optimize who needs to get this phone call, what kind of content do they need to get, when should we deliver it to them, once we follow up when should we alert the nursing team, when do I need to bring in a nurse versus a doctor versus a pharmacist. All of these things we can teach a machine to be able to do, and it will free us up to work at the top of our professional certifications. How can we make that something that technology can really enhance for all of us? It’s right around the corner and a lot of it is existing right now – we just have to take that leap of faith and start working.

Nikki: Tell us about some of the 31 participants and the Pulse at MassChallenge cohort this year. I mean, maybe some of them are tackling this?

Nick: Yes, I’d say that it’s pretty much impossible to pick one to talk about. Which one would you want me to dive in on?

Nikki: Well, can you bucket them at all? Are there, per se, three types of winners?

Nick: Honestly, it’s super difficult for us to categorize it. I think for our showcase we ended up with five categories and every single one of the startups was like, “this is not the right category for us.” It was really challenging for us to identify how to group them. We have a company that has a head cap with electrodes on it that can both measure your brain activity and stimulate your brain to treat things like epilepsy and other neurocognitive conditions.

Sitting next to a company that makes games that educate patients on their conditions and how to properly utilize their medications. Sitting next to a company that provides virtual reality experiences for the elderly. Sitting next to a company that has a chip that can measure your blood and let you know whether or not you’re at risk for a heart attack. I mean you have such a diverse set of companies that are working here, that all are making an incredible impact in their own way. But it’s tackling a different part of healthcare, and I think one of the misnomers that people have about digital health is that it’s a vertical. I don’t think that digital health is a vertical. I think it’s a horizontal, and its tech-enabled healthcare. It is the entire spectrum of discovery to delivery, and post-delivery, and pre-discovery. It’s, “how do we enable healthcare from a technology perspective?” To me that’s digital health. I think it’s inaccurate to describe digital health as a vertical. It’s an enabler of the horizontal. It’s what’s going to enable us to unlock the future of how we deliver care, treat patients and take care of the people that serve these patients. So, it’s very difficult for me to categorize these startups because our definition of digital health in that horizontal. We have companies that really represent that entire spectrum. We have VR companies, but we have a category for virtual reality and none of our startups selected themselves into that category. One of them is in consumer, one of them is working as a treatment tool, and one of them is working as this great biomarker for concussions. It’s just incredible.

Nikki: That is a great way to describe it for our listeners too. It has a nice a visual component, knowing that you’re looking out amongst the participants inside the office building, working away and gaining knowledge from the other folks at MassChallenge and their mentors. I think I heard a winner or two in there too, but I won’t identify who they are yet.

Nick: Yes, there are winners in there. And we’re very excited about the winners. I know that we’re recording this before post-analysis, so I can’t spill the beans, but these companies are absolutely incredible.

Nikki: I couldn’t agree more. We have great interviews set up with the winners after the event. Good luck at the event, we’re looking forward to seeing you there and all of the 31 participants

Nick: Nikki, this was such a pleasure. Thank you for having me on.

Nikki: Same here, Nick. Thanks so much.