On September 27, 2019, SVTC + Constellar Ventures hosted its third annual Silicon Valley Science and Technology Forum at the venerable Computer History Museum in Mountain View, CA. Seventeen Silicon Valley-based veterans from the field of biomedical technology were invited as speakers to discuss the impact of new technologies on the healthcare industry.
Following the keynote speech delivered by Dr. James Wall, practicing pediatric surgeon and Director of Stanford University’s Byers Center for Biodesign, the conference launched into its first panel to start drill down into the various topics of AI + Healthcare. First panel began with the topic “Healthtech + Diagnostics” moderated by Lake Dai (Partner of LDVP) with Savan Devani (Founder and CEO of BioTrillion), Biao He (Managing Partner of Tsingyuan Ventures), and Todd Kimmel (Managing Partner of Montage Ventures) as panelists.
Below, we have summarized the key takeaways from this panel.
“From the perspective of technology, the current trend is the integration of technology and expertise in the diagnostic space, and the synthesis of laboratory technologies and software applications (such as AI) with hardware. The application of technology from other fields to that of healthcare will spur development in the field.”
- Biao He, Managing Partner, Tsingyuan Ventures
“The line between medical care providers and diagnostic companies will become blurred as diagnostic companies trend towards becoming clinics and care providers themselves. This shift will influence the underlying technology stack of diagnostic companies as they try to provide high quality and affordable medical services to patients.”
- Todd Kimmel, Managing Partner, Montage Ventures
“Diagnostics is about analyzing information from life, while treatment is about effecting change upon life. When it comes to the digital revolution and computation with the ability to handle information at an exponential scale, AI has greater potential to disrupt diagnosis than treatment.”
- Savan Devani, Founder and CEO, BioTrillion
From left to right: Lake Dai, Savan Devani, Biao He, Todd Kimmel
1) What are the latest trends in medical diagnosis?
Devani answered that the healthcare industry should not be broken down by industry stakeholders but rather along the continuum of time, at the level of individual consumers: from left to right, the field should be divided into prevention, detection, and intervention. For centuries, the healthcare industry has been focused on intervention, but the current trend is towards the left, towards prevention. It is the middle phase of detection and diagnosis that is underserved at present.
The current trend, He explained, is the integration of technology and expertise in the diagnostic space, and the synthesis of laboratory technologies and software applications (such as AI) with hardware. The application of technology from other fields to that of healthcare will spur development in the field.
Kimmel added that it is difficult for payers to persuade their members to use certain diagnostic services, so providers have a difficult time bringing solutions to the market. Thus, the line between medical care providers and diagnostic companies will become blurred as diagnostic companies trend towards becoming care providers themselves. This shift will influence the underlying technology stack of diagnostic companies as they try to provide high quality and affordable medical services to patients.
2) Will AI and big data have a bigger impact on diagnosis or treatment?
Devani expressed that diagnostics is about analyzing information from life, while treatment is about effecting change upon life. When it comes to the digital revolution and computation with the ability to handle information at an exponential scale, AI has greater potential to disrupt diagnosis than treatment.
Kimmel and He both agreed with the above sentiment, with He drawing attention to two points:
Digitization: Digitization in pathology is still underdeveloped; to utilize AI and computation to improve diagnostics, the digitization of pathological images must first be accomplished.
Standardization: By standardizing certain medical procedures, more accurate and meaningful images can be preserved for better data for computers to analyze.
3) Does the healthcare industry need more data than other industries do?
Devani said that more data is always better, but at the same time, one must be aware of the classical problem with information, in which there could be more noise than signal. As long as the signal is stronger than the noise, then more data is always better.
In addition, Devani expressed that language, since it is qualitative and subjective, may be the least effective form of information exchange. Data, especially medical and health data, need to move from language-based generation to quantitative, measurement-based generation in order to be used for computation.
4) What are the differences for innovation and opportunities in the US and Chinese healthcare industries?
With investment experience in both China and the US, He said there are broad similarities but minor differences in the medical diagnosis fields of the two countries.
China is similar to the US in that there is rapid development in the R&D and application aspects of new technologies. However, it is more difficult to innovate in China than in the US: once something becomes popular or profitable, a lot of people will flock to enter that market. For example, when sequencing businesses started to get into the clinical testing field a few years ago, He heard that as many as 2,000 companies were doing sequencing testing in China.
The US adopts new innovations to market more easily than China does. Unlike in the US, there are no LDTs in China, so all medical tests of domestic third-party laboratories have to be approved by China’s equivalent of the Food and Drug Administration (FDA), which prevents many new technologies from being used clinically. Although the Chinese government has identified this problem and started to formulate new regulations to alleviate it, it will still be a long time before the situation improves. Thus, to bring innovation to the market in China, the most reliable way is to develop products.
5) What are the key elements of investing in healthcare startups?
Kimmel, with fifteen years of investment experience, discussed the two healthcare startups in which his fund invested, which were both acquired but failed to fully enter the market. He explained that it has always been challenging for medical diagnostic companies to promote new technologies to medical institutions, doctors, and patients, even if the technology can double the diagnostic rate.
The best solution, Kimmel believes, is to let diagnostic companies be care providers or to promote greater cooperation between medical institutions and diagnostic companies. For that reason, Montage Ventures’ investment strategy is to look for companies that use diagnosis as a tool to enable patients to receive better care services. Sollis Health, a concierge urgent care clinic, is one such startup in which Montage Ventures invested. The company has a clinic in a radiology center, so that patients can easily receive X-ray diagnosis and healthcare services in the same place.
6) What is the biggest bottleneck for the development of the healthcare industry? Is it the payers, data, or something else?
Devani said the bottleneck is multifactorial; unlike in other sectors, in the healthcare sector, superior solutions do not immediately reach consumers (patients) and achieve mass adoption. The primary reason is that there are many stakeholders, such as payers, providers, pharmaceutical companies, with conflicting interests and incentives between innovation and consumers.
Thus, it is too reductive to regard the payer as the single biggest bottleneck in the healthcare industry. At present, in order to achieve adoption by the consumer for your product, startups must appeal to the incentives of at least one stakeholder, but Devani hopes the healthcare industry will soon take after other industries.
After forty minutes of insightful discussion moderated by Dai, the panel opened up to take audience questions. Audience members were eager to ask questions of our panelists and engage them in discussions, helping to provide ideas for further innovation and development in the healthcare industry.
This year’s forum was full of lively dialogue and insightful discussions, many of which, unfortunately, cannot be conveyed here. We will continue publishing articles summarizing and analyzing topics from the forum, as well as reports from other relevant forums from time to time. If you are interested, we invite you to follow us on our social media.