The CURE/Yale BioHaven Entrepreneurship Series, in association with Crossroads Venture Group, launched its current season of seminars November 15 with a panel presentation devoted to "Healthcare IT: Challenges and Opportunities."

Panelists included James Staten, Executive VP, Corporate and Financial Services, YNHHS and CFO and Senior VP for Finance, Yale-New Haven Hospital; Matt Walton, CEO, MyCare LLC; and Wallrick Williams, Associate, Galen Partners.

Kip Bergstrom, Deputy Director, Connecticut Department of Economic and Community Development, also addressed the audience, speaking on the recently announced plan for Jackson Laboratory to locate facilities in Farmington, CT.

Moderating the panel was Paul Hughes, Partner, Wiggin and Dana. Introducing the proceedings were Paul Pescatello, President and CEO of CURE; and Liddy Karter, Executive Director, Crossroads Venture Group.

Before introducing the panelists, Paul Hughes said, "We're in a long-term trend where growth in healthcare spending has outpaced growth in the economy. That’s led to lots of proposals, some governmental, some private, around quality efficiency initiatives, and increased pressure for reduction in provider compensation.

"We’ve seen government regulation to alter patterns of care and there’s talk about putting new regulations in place. A proposal is out for creating the kind of care organizations that look a lot like capitated organizations. And you’ll see where that all ends up.

"But the one that we’re really going to focus on this afternoon is the $20 billion in healthcare reform to fund healthcare IT initiatives. We have a provider/consumer of IT solutions in Jim Staten. We have a provider of healthcare solutions in Matt Walton. And we have an investor in healthcare services and healthcare IT in Wallrick Williams from Galen."

James Staten explained that the Yale New Haven Health System includes three hospitals — Yale-New Haven Hospital, Greenwich Hospital, and Bridgeport Hospital. A fourth hospital, St. Raphael in New Haven, will soon join the system. YNHHS also includes the Northeast Medical Group, which joins physicians together as employees, freeing them of the burden of private practice. The system includes about 1,600 beds and had net revenue of $2.1 billion in 2010.

Matt Walton of MyCare said he wanted to focus on his company's product called SAMI: Smart Access to Medical Information. He related how a patient named Sam had died in hospital because, although various units of the hospital had a lot of information about him, there had been no simple way, or incentive, to bring all the information together to inform his treatment. According to Walton, Sam's son said, "instead of lobbing bricks at each other, let's try to fix this." Thus was SAMI and MyCare born. The company's approach is based on the premise that existing software such as used for PriceLine and other Internet travel agencies, together with existing web browsers, can be efficiently and effectively adapted for medical information retrieval.

Wallrick Williams explained that Galen Partners is a healthcare-focused late-stage venture capital fund. The fund invests in healthcare IT, medical devices, and specialty pharma. The fund looks for revenue-generating companies poised to grow quickly.

Asked about trends and events driving the hospital as provider and consumer of healthcare, Staten observed that current healthcare legislation will take $155 billion, which would otherwise have been available, out of the system. Consequently, hospital administrators are taking a hard look at costs.

The Yale New Haven System has made a substantial investment in a system called Epic, Staten said, including hiring additional personnel familar with the system and its implementation. (View Epic website.) Soon over 800 physicians in the Yale Medical Group will be using the system for such tasks as e-prescribing, Staten noted.

Staten pointed out that adoption of smart phones by U.S. physicians exceeds 70 percent compared to 20 percent in the general population. He said that 96 percent of medical students today use some type of smart phone, and that remote patient monitoring will grow 25 percent per year in over the next few years.

Staten also said that there was a huge shift under way to outcomes-based medicine. Hospitals will need to demonstrate successful outcomes both to attract patients and to justify reimbursements.

Matt Walton agreed that the shift from fee for service to outcomes was a game changer. "This is going to change the old model based on silos," he said. "There are going to be a lot of opportunities for companies that come up with solutions that look across silos." He said that recently the annual IT spend has been in the neighborhood of $5 billion to $7 billion per year, and that an additional $4 billion to $6 billion per year was going to be pumped into the space during the next few years.

Wallrick Williams mentioned some of the companies that Galen Partners is investing in. One is PeriGen, which is marketing a product called the PeriBirth clinical decision support system (View PeriGen website.) According to Williams, this type of product can lead to an immediate saving in malpractice costs, so it represents a significant value proposition for the investor.

Another company of interest to Galen is lifeIMAGE. It's a software service platform that allows one to share diagnostic imaging information across silos, Williams said. "You literally can open up Internet Explorer or Firefox or a number of supported browsers and you’re able to view the imaging study and move around in it just as you would be able to if you were onsite working at the original institution where it was taken." (View lifeIMAGE website.)

"When you think about roughly $120 billion a year spent in the US on imaging studies, 900 million imaging studies done each year, of that $120 billion we estimate $10 billion to $15 billion is from redundant images that absolutely don’t need to be taken," Williams said. "So you look at that and you say, 'That’s another area where we can significantly improve the way things are being done and save quite a bit of money as well.'"

But the real money, Williams said, will be made not just from consolidating information, but from enabling decision making based on that information. "For example, you want to identify potentially high cost patients early, so you can send them an email or otherwise intervene."

More about Jackson Laboratory

Following the panel discussion, Kip Bergstrom spoke to the audience about Connecticut's success in convincing Maine-based Jackson Laboratory to establish facilities in Farmington, CT. The opportunity presented itself after Jackson did not reach suitable terms with the state of Florida. Connecticut's commitment to bioscience, including a major investment in the UConn medical school, got Jackson's attention, Bergstrom said.

"This overall commitment is an unbelievably fundamental transformational opportunity in Connecticut’s life science research infrastructure that will change our position globally," Bergstrom said. "If you look at what’s going on in personalized medicine at Yale, what’s going on at UConn and what they can build, and what Jackson Labs will build with its 60 new research teams, it can put us on the map."

The BioHaven series is presented by CURE and the Yale Office of of Cooperative Research, with Wiggin and Dana and PricewaterhouseCoopers as lead sponsors. The series is also sponsored by Elm Street Ventures and the Economic Development Corporation of New Haven, with additional support from the Yale Entrepreneurial Institute and the Yale Healthcare & Life Sciences Club. The November 15 panel was jointly sponsored by the Crossroads Venture Group.

The next BioHaven presentation will be by Thetis Pharmaceuticals on January 25, 2011 at 4 pm at the Anylan Center, Yale University, 300 Cedar Street, New Haven.