Musculoskeletal Startups & Personalized Health Tech

Reflections on Public Health and the Evolution of Care

As the current pandemic continues with varying impacts, Emily Melton, founder and managing partner of Threshold VC, draws parallels to the Spanish flu pandemic of a century ago.

She notes that the response to that earlier crisis spurred the development of interventional medicine – a practice focused on treating illnesses through surgical or pharmaceutical interventions after symptoms appear.

Currently, this approach dominates healthcare in Western countries. However, Melton, a prominent investor in health tech companies like Livongo, Tia, and Calibrate, believes this care model remains robust.

The Rise of Chronic Disease and a New Approach

“Our society is grappling with a surge in chronic diseases, including chronic pain, diabetes, and obesity,” Melton explained.

These conditions often necessitate more than just a quick fix like a pill or surgery; they frequently require therapeutic interventions, behavioral adjustments, and ongoing support.

This need is driving the emergence of personalized medicine, a concept gaining traction within Silicon Valley startups.

Personalized Medicine: A Holistic View

Personalized medicine represents a shift towards more comprehensive care, considering a patient’s multiple symptoms and co-existing conditions.

For instance, in hormonal health, this approach could lead to more precise birth control prescriptions based on individual data, moving away from the traditional trial-and-error method.

In essence, it stands in contrast to the reactive nature of interventional medicine.

“We must recognize that individuals are not simply isolated body parts or defined by a single condition,” Melton stated. “The focus should be on treating the whole person.”

Addressing Musculoskeletal Conditions and Chronic Pain

Several companies are now applying this holistic approach to revolutionize care for patients with musculoskeletal (MSK) conditions and chronic pain.

These conditions are often managed with potentially addictive opioids, presenting a significant public health challenge.

With an estimated 50 million Americans experiencing chronic pain, entrepreneurs are developing alternative solutions that deviate from conventional practices.

The market potential is substantial: the global MSK medical market was valued at $57.4 billion in 2017, and the chronic pain market is projected to reach $151.7 billion by 2030.

The Convergence of Factors Driving Innovation

“Success in MSK medicine isn’t necessarily about entirely new concepts,” Melton observed. “It’s often the combination of various factors at a specific time that fuels exponential growth and enables a startup to thrive.”

Today, we will examine three startups – Clearing, PeerWell, and Hinge Health – each employing distinct strategies to alleviate chronic pain and address MSK-related issues.

These companies represent the forefront of innovation in a rapidly evolving field.

Clearing: A Novel Approach to Chronic Pain Management

According to Avi Dorfman, a direct-to-consumer model represents the most impactful strategy for addressing chronic pain, leading to the establishment of Clearing.

This digital health startup collaborated with a distinguished medical advisory board, comprised of physicians and researchers from institutions including Harvard, Johns Hopkins, and New York City’s Hospital for Special Surgery, to formulate a pain management solution that avoids opioid use.

Recent Funding and Investment

Clearing successfully secured $20 million in seed funding last month, with Bessemer and Founders Fund leading the investment round. Melton also participated in this funding initiative through Threshold.

Clearing’s Product Suite

The company’s offerings encompass a range of four distinct products designed to address various aspects of pain management.

• Prescription compound cream utilizing FDA-approved components.
• CBD cream formulated for localized discomfort relief.
• Nutraceuticals intended to support and enhance joint health.
• A comprehensive directory of prerecorded exercises for at-home use.

Currently, Clearing’s services are accessible to patients residing in California, Florida, Georgia, Illinois, New York, North Carolina, Ohio, Pennsylvania, Tennessee, and Texas.

The Patient Intake Process

Patients within the service area can initiate the process through a virtual intake form. This form utilizes a series of asynchronous questions to gather detailed information about their pain experience.

Dr. Jacob Hascalovici, Clearing’s co-founder and chief medical officer, was instrumental in developing this form to facilitate quicker and more accurate diagnostic assessments by clinicians.

Understanding Pain Types

“Pain can be broadly categorized into three primary types: neuropathic pain, muscular pain, and bone/joint pain,” Dorfman explained.

“Individuals typically experience one of these types, or a combination of two.” Following a thorough pain assessment, patients are presented with personalized treatment plans, varying in strength and concentration.

These products are then delivered directly to the patient, accompanied by ongoing clinician-led follow-up care.

Subscription and Cost

Clearing provides both monthly and semi-monthly subscription options, with pricing ranging from $30 to $70 per month.

“We acknowledge that our approach may not be universally effective, given the subjective nature of pain and individual responses,” Dorfman stated. “Ultimately, a patient’s personal experience is paramount.”

Differentiating Factors: Direct-to-Consumer Healthcare

A key distinction for Clearing lies in its direct-to-consumer approach, a model gaining traction in healthcare, as exemplified by companies like Ro and Hims and Hers.

While those companies primarily focus on general primary care, Clearing aims for a more specialized niche, concentrating on the complexities of chronic pain conditions.

Patient-Centric Approach

“Developing solutions for self-insured employers and payers often dictates what patients receive,” Dorfman noted.

“Conversely, a direct-to-consumer model prioritizes understanding and addressing what patients truly need.”

PeerWell

PeerWell, a San Francisco-based company that secured $6.5 million in Series A funding in 2019, is dedicated to providing comprehensive care for musculoskeletal (MSK) conditions. Their approach covers the entire patient journey, from initial pain management through preparation for and recovery from surgery.

According to CEO and co-founder Manish Shah, the company strategically chose to collaborate with in-network healthcare providers. This decision was made in preference to a direct-to-consumer model relying on out-of-pocket payments.

Shah explained that many individuals experiencing pain and limited mobility lack the financial resources for immediate out-of-pocket expenses. While offering services for direct cash payment is simpler to implement, it restricts the company’s ability to reach those who could benefit most from their care.

Over the last three years, the startup has been developing PeerWell Health, a new clinical practice that launched recently. This full-stack healthcare provider centers its services around five key areas: physical therapy, nutritional guidance, pain and wellness management—including non-opioid symptom relief—life management (addressing mental health), and health literacy.

Shah clarifies that “personalized” care extends beyond simply utilizing AI. He emphasizes the importance of focusing on the individual needs of each patient.

PeerWell begins by thoroughly understanding a patient’s unique circumstances and goals. They then tailor their five core pillars to address those specific needs and obstacles. This patient-centric approach, Shah believes, should be a standard within the health technology sector.

Concurrent with the clinic’s launch, PeerWell welcomed Dr. Jonathan Slotkin to its board of directors. Dr. Slotkin currently serves as the vice chair of neurosurgery at Geisinger and the chief medical officer of Contigo Health.

“A successful approach to patient care requires a balance of technology and human interaction, combining virtual and in-person visits.” Shah agrees with this sentiment, noting that in-person care should be available for patients requiring a higher level of support. PeerWell is currently exploring the possibility of establishing its own physical therapy facilities.

The company recognizes that factors like obesity, smoking, and diabetes significantly impact MSK conditions. Addressing these areas is crucial for delivering optimal patient outcomes.

• PeerWell focuses on a holistic approach to MSK care.
• The company prioritizes accessibility through in-network provider partnerships.
• Personalized care is central to their clinical practice.

Hinge Health

Based in San Francisco, Hinge Health stands as a prominent startup within the musculoskeletal (MSK) sector. Its latest valuation reached $3 billion following a $300 million funding round spearheaded by Coatue and Tiger Global. This represents a sixfold increase in valuation, indicating substantial investor confidence in the company’s value proposition.

Reports suggest Hinge Health is considering an initial public offering (IPO) in 2022.

Like PeerWell, Hinge Health primarily targets U.S. employers and health insurance plans for its services. To date, the company has extended its reach to over 150,000 individuals.

While predominantly utilizing virtual and asynchronous care delivery methods, Hinge Health also incorporates elements of what’s been termed “tech and touch.”

The company provides each patient with a tablet and a wearable device to enhance access to, and the collection of data for, MSK care. Advancements in technology and increased bandwidth have led to smartphones frequently serving as substitutes for these dedicated tablets.

Daniel Perez, the CEO of Hinge Health, anticipates a future need for in-person care options.

“As you strive to become a comprehensive musculoskeletal solution, and encounter the limitations of digital care, the question arises: how can in-person care be effectively integrated?” he stated. He projects that Hinge Health will establish physical locations – “some bricks and mortar” – within the next five years.

Currently, the primary focus remains on delivering personalized virtual health services. Last July, Hinge Health announced plans to launch a digital MSK clinic offering a complete range of care, encompassing prevention, acute treatment, chronic condition management, and surgical interventions.

“The treatment plan for a warehouse worker, whose job involves physical strain or prolonged inactivity, should differ significantly from that of someone who sprains an ankle while hiking with their children,” explained Daniel Perez, CEO of Hinge Health.

“The breadth and complexity of musculoskeletal care often hinder scalability, as many companies underestimate the diverse modalities required.”

Perez emphasized that this complexity is a crucial consideration for new health tech startups. Regarding the decision to operate within insurance networks rather than relying on out-of-pocket payments, Perez concurred with PeerWell’s Shah, asserting that an in-network approach enhances accessibility.

“Few individuals undergoing knee replacement surgery prefer to pay cash,” he noted. “The vast majority, approximately 99%, utilize insurance coverage. Most healthcare expenses should be managed through insurance, as a cash-based system would be financially unsustainable for the nation.”

The Future Landscape of Musculoskeletal (MSK) Medicine

A demand exists for tailored MSK medicine solutions, however, significant hurdles remain for any new company aiming to establish itself within this competitive field.

The businesses highlighted represent only a portion of the MSK medical market; numerous startups have entered this space, including companies such as Kaia Health, SpineZone, Physera, SWORD Health, and Reflexion Health.

Naturally, some of these entities will likely merge to provide insurers and patients with a more comprehensive suite of services in a single location. For instance, Omada, a diabetes management company, acquired Physera last year. This provides prospective clients with a choice: a dedicated MSK company like Hinge Health, or Omada, which addresses pre-diabetes, diabetes, behavioral health, hypertension, and MSK conditions.

Challenges for MSK Startups

While the COVID-19 pandemic spurred increased acceptance of digital health technologies, in-person treatment remains crucial for many MSK ailments. However, collaboration with existing providers isn't straightforward for startups. A specialist, speaking anonymously, indicated that providers often prioritize MSK-related surgeries due to their higher revenue potential.

Consequently, approaches like PeerWell’s, which focus on preventative care, could potentially conflict with a traditional provider’s financial incentives. This may necessitate startups establishing their own physical locations to overcome these limitations.

Signs of Maturation and Innovation

Historically, many MSK applications lacked input from qualified healthcare professionals. The startups currently operating demonstrate a shift, with all incorporating clinical advisory boards into the development and oversight of their products. This indicates a growing level of sophistication within the sector.

Clearing aims to deliver accessible healthcare for chronic pain, offering both products and virtual exercise programs alongside guidance from a health coach. PeerWell is actively pursuing in-network status, concentrating on five core elements of care: physical therapy, nutritional guidance, pain and wellness management, life skills (including mental health), and health education.

Hinge Health is adopting a holistic perspective on MSK health, addressing the entire spectrum of needs – from preventative measures and acute injuries to chronic conditions and surgical interventions.

The Path to Mainstream Adoption

Personalized healthcare requires substantial evidence of effectiveness before it can become a standard care pathway, moving beyond the realm of experimental medicine. The healthcare industry still has considerable progress to make before concepts like fully digital clinics, personalized health plans, and on-demand, direct-to-consumer solutions become commonplace.

Despite these complexities, a new generation of entrepreneurs in MSK medicine is dedicated to realizing this vision.