the health data transparency movement is birthing a new generation of startups

The Emerging Era of Healthcare Data Transparency

During the early years of the 21st century, Jeff Bezos delivered a noteworthy TED Talk, “The Electricity Metaphor for the Web’s Future.” He posited that the internet would catalyze innovation mirroring the transformative impact of electricity.

Currently, the healthcare sector finds itself at a comparable turning point. The increasing emphasis on data transparency is fostering a new wave of innovation and the emergence of numerous startups.

Navigating the Dual Challenges of Transparency and Privacy

Observers of the healthcare landscape have likely identified two concurrent movements. One centers on expanding transparency regarding provider and payer data, including data anonymized to protect patient identity. The other focuses on reinforcing the protection of individually identifiable patient information.

The key distinction lies in accessibility: anonymized data is becoming increasingly accessible, whereas personal data is subject to stricter controls, a necessary response to regulations like GDPR, CCPA, and similar laws globally.

This trend toward greater availability of anonymized data is empowering a new generation of vendors and services, ultimately aiming to improve healthcare quality and transparency for everyone.

The Foundations of Increased Data Availability

The creation of these novel companies would have been impossible just a few years ago. The Affordable Care Act represented an initial step toward greater access to anonymized data.

It mandated that healthcare organizations, including hospitals and integrated health systems, publish data concerning costs and patient outcomes. This included the dissemination of detailed information about healthcare providers.

Subsequent legislation broadened disclosure requirements, compelling biotechnology and pharmaceutical companies to report payments made to research collaborators. Furthermore, every physician practicing in the United States is now listed in the National Practitioner Identifier (NPI) database, a publicly accessible resource.

Empowering Patients and Providers

These developments have facilitated the development of companies that provide enhanced data control to both patients and providers. Consider the following examples:

• New platforms are emerging to help patients compare costs and quality metrics across different providers.
• Tools are being developed to assist providers in analyzing anonymized data to improve clinical decision-making.
• Services are appearing that enable patients to securely share their health data with researchers.

These innovations represent a significant shift in the healthcare ecosystem, driven by the increasing availability of data and a commitment to greater transparency.

Empowering Patients Through Consolidated Health Data Access

A central benefit of recent advancements in patient access to health information is the ability to gather all personal health data into a single, unified location.

Consider the frequent scenario where healthcare providers lack awareness of prior treatments or completed tests performed at different facilities. This often leads to unnecessary repetition of diagnostic procedures due to incomplete medical histories.

The advantages of a centralized health record are significantly amplified for individuals managing rare conditions and consulting with multiple specialists. Having comprehensive, accessible data offers substantial improvements in care coordination.

Several companies are actively developing solutions in this area:

• PicnicHealth provides a platform for patients to consolidate their medical records. This capability was largely enabled by legislation within the Affordable Care Act, mandating the creation of electronic health records by hospitals. Prior to this, patient information was often fragmented and stored in paper format within individual physician offices.
• AllStripes focuses specifically on assisting patients with rare diseases in managing and centralizing their health records. Their methodology mirrors that of PicnicHealth, but with a dedicated emphasis on the unique needs of the rare-disease patient population.
• Apple’s Health app is rapidly evolving into a widely adopted standard for personal health data management.

This represents a significant paradigm shift, granting patients greater control over their health information and dismantling traditional data silos.

Real-World Evidence and Data Companies

A burgeoning field known as real-world evidence (RWE) and real-world data (RWD) is emerging as a valuable resource for life sciences organizations and the Food and Drug Administration. Its primary function is to facilitate the monitoring of drug safety and the identification of adverse events following market release.

This type of data proves beneficial across a range of applications, including informing regulatory choices made by the FDA.

• It aids in the identification and enrollment of patients for clinical trials, addressing a significant challenge as approximately 50% of trials struggle with recruitment.
• RWD supports the design of both clinical trials and observational studies.
• It assists in the development of coverage policies and clinical guidelines for medications.

A particularly noteworthy development is the potential for the FDA to permit drug developers, possessing sufficient RWD demonstrating performance, to bypass or expedite clinical trials. This could accelerate the availability of treatments already proven effective in real-world settings.

Companies Operating in the RWE/RWD Space

• Clarify: This platform provides analytics for life sciences companies, enabling them to monitor patient groups, analyze healthcare costs, and track patient journeys within the U.S. healthcare system.
• CareJourney: Focused on assisting payers in reducing overall healthcare expenditures, CareJourney leverages RWD analysis. The company was founded by a former Chief Technology Officer under President Barack Obama, with extensive experience in healthcare technology.
• Aetion: Aetion empowers life sciences companies to utilize RWD in clinical trials and commercial endeavors. It accelerates drug market access by analyzing real-world patient data and a pharmaceutical company’s drug performance.

The success story of Keytruda, a now-leading drug developed by Merck, illustrates the power of RWE.

Initially, the drug remained largely undeveloped within Merck, having been acquired through multiple mergers. However, its trajectory changed dramatically in 2010 when a competing drug demonstrated positive results in a clinical trial.

Merck strategically utilized its own RWE to pinpoint advanced melanoma as the most promising area for expedited FDA approval through the agency’s Breakthrough Therapy program. This allowed for a faster approval process and enabled Merck to gain a competitive advantage. Subsequently, lung cancers were also added to the drug’s approved uses.

The Transition to Value-Based Healthcare

Within the United States healthcare system, expenditures consistently surpass those of other developed nations by a factor of two to three, yet health outcomes frequently lag behind. Value-based care (VBC) represents a healthcare approach centered on wellness and proactive health management, rather than solely reacting to illness.

A strong emphasis is placed on preventative measures, and research consistently demonstrates that VBC leads to substantial long-term reductions in overall healthcare expenses alongside marked improvements in patient outcomes. Financial incentives are often aligned with performance, rewarding providers when pre-defined outcome benchmarks are met, while conversely adjusting reimbursement for instances where those benchmarks are not achieved.

Several organizations are actively contributing to the acceleration of the shift towards VBC:

• Innovaccer provides solutions for evaluating risk associated with value-based agreements.
• Arcadia assists healthcare organizations in attaining financial stability within the framework of value-based care.
• Abacus Insights concentrates on dismantling data silos within the healthcare industry, empowering both patients and physicians with enhanced decision-making capabilities.
• SymphonyCare streamlines value-based care delivery through integrated applications designed for providers, payers, and patients.

The core principle of VBC is to reward quality of care over quantity of services. This is a fundamental shift from traditional fee-for-service models.

By focusing on preventative care and improved outcomes, VBC aims to create a more sustainable and effective healthcare system. This approach benefits all stakeholders involved.

Key Benefits of Value-Based Care

Implementing a VBC model offers numerous advantages. These include reduced costs, improved patient health, and increased provider satisfaction.

Furthermore, the emphasis on data analytics and risk assessment allows for more targeted interventions and personalized care plans. This leads to better resource allocation and more efficient healthcare delivery.

The Rise of Precision Medicine

Precision medicine represents a transformative approach to healthcare, focusing on tailoring treatments to the unique characteristics of each patient and their specific illness. A comprehensive understanding of a patient’s health, coupled with insights into treatment efficacy for similar profiles, is paramount. This is where healthcare data transparency becomes critically important.

Key Companies Pioneering the Field

• Insitro is a prominent startup leveraging advanced machine learning techniques. Their work assists pharmaceutical and biotechnology firms in developing and bringing more promising drugs to the market.
• Notable Labs concentrates its efforts on precision oncology, aiming to personalize cancer treatments.
• Nference utilizes artificial intelligence and machine learning to accelerate drug discovery processes through the analysis of healthcare data.

The emergence and sustainability of these companies were previously impossible. Access to the necessary data was limited, and the required computational resources were unavailable. The advent of cloud computing made the rapid and cost-effective analysis of massive datasets a reality.

These relatively young companies have already achieved collective valuations in the billions of dollars and generated thousands of employment opportunities. Their growth demonstrates the potential of this new approach.

Established industry leaders, including IBM, IQVIA, and Veeva, are also adapting to this data-driven landscape. IBM, for example, has recently introduced a blockchain-based healthcare solution. Other significant players in the healthcare sector include Optum and Mede Analytics.

This sector remains in its early stages of development, representing the initial phase of innovation. However, the combined valuation of these startups already reaches billions. As data accessibility increases and cloud computing becomes more affordable and powerful, technological advancements will continue, and this field will command a larger share of the overall technology market capitalization.

A historical parallel can be drawn to a 1917 Sears advertisement promoting electric appliances, which encouraged customers to “Use your electricity for more than light.” Similarly, healthcare stakeholders – patients, providers, and payers – are now encouraged to utilize healthcare data beyond its traditional role in record-keeping.

The valuable insights derived from this increasingly accessible data are already enhancing convenience and improving lives in numerous ways. The potential for further advancements is substantial.