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mHealth In The Era Of Obamacare : A Once-In-A-Generation Opportunity For Mobile And Digital Startups

Levi-Shapiro - 10

The Affordable Care Act (“Obamacare”) represents the most systemic, transformative change in over 40 years to America’s largest economic sector: healthcare. This is a once-in-a-generation opportunity for mobile and digital startups to disrupt an inefficient industry. Even the government (CMMI- Centers for Medicare and Medicaid Services) predict health expenditures will continue to outpace economic growth, jumping 7.4% in 2014 to reach 20% of GDP by 2021. These recent regulatory changes create opportunities and challenges for mHealth and eHealth startups that are worth considering.

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A few basics about ACA:

1)      The insurance mandate will cover most Americans

–        Individuals can purchase from state-based health insurance exchanges

–        Insurance companies will bid to be included in exchanges

2)      Expansion of Medicaid (the federal-state program that provides health insurance to low-income Americans)

–        Until ACA, an individual had to be both low-income and “categorically eligible”

–        ACA will require states to cover all low-income Americans (earning up to 133% of the Federal Poverty Level) under the age of 65

3)      Insurance reforms

–        Insurers can no longer deny coverage based on pre-existing conditions; no annual or lifetime limits on coverage


clinically integrated delivery system

 Clinically integrated delivery system

Good News for Healthcare IT Startups: Increased Government Funding & Partnerships– Payers are incentivized to transition from volume-based payment (fee-for-service) to value-based payment. The Center for Medicare & Medicaid Innovation (CMMI) will evaluate and select programs that improve or maintain quality but reduce costs. Startups take note: CMMI and the Medicaid Waiver Authority are explicitly tasked with deploying new demonstration / pilot programs. In particular, the Affordable Care Act mandates vendor selection criteria to include Minimum Medical Loss Ratio (MLR):


Pilot programs demonstrating improved health quality, increased likelihood of desired health outcomes (with objective measures) that is grounded in evidence-based medicine will have a high likelihood of broader deployment.

According to Susan Berson, Managing Partner for Mintz Levin ( and an expert in Healthcare regulation, “Obamacare changes the equation. Health IT companies need to demonstrate value to providers, health systems, and insurers. FDA approval is not enough to be competitive. Specifically, how is your company addressing value in R&D, trials, and marketing”?

mobile ECG_McKesson

Clinically integrated delivery system

Great News for Pharma- More Insured Customers: In 2011, 48 million Americans had no health insurance (15.7% of the population). Roughly 32 million previously uninsured Americans will become insured thanks to Obamacare, representing $115 billion of new business for pharmaceutical companies over the next 10 years. In this environment, reimbursement will be tied to therapeutic outcomes that lower costs. Even startup Pharma and biotech companies should add payer/reimbursement experts to their management teams. Across the product development cycle, reimbursement approval will favor the companies that can quantify how their product generates savings, reduces hospital admissions / outpatient visits and limits potentially expensive side effects.


Bad News for Apps- Some Medical Applications Now Regulated Like Medical Devices: the The Apple and Google application stores are teeming with more than 100, 000 mobile health applications, making it the #3 category. For those that transform the Smartphone into a medical device, new guidelines issued on September 23rd by the US Food and Drug Administration (FDA) require 510(k) application and approval like a medical device. Although 510(k) is the least stringent of the device approval pathways, and usually does not require clinical trials, the time, cost and complexity of this process is substantial. Companies that don’t comply will have their product banned in the US.

Even the big guys, who are skilled at FDA approval, face challenges with mobile applications. Tomer Levy, VP of Cardiology and CEO of McKesson Israel, discusses their first mobile product. “It was not a success. In our second attempt (Mobile ECG), we needed to jump over the gimmick hurdle and understand where can technology really add value? We used a dedicated development team, with UX consultants, and frequent release cycles. Our users wanted a creation tool, not just for consumption, and they didn’t want to refer to their desktop”.


Get ready entrepreneurs, the market is in transition. Meet some of the Israeli mHealth startups addressing this opportunity:

Early Sense (, Aerotel Medical Systems (, MobileOCT (, MediSafe (, Treato (, Medivizor (, Zoeticx (, Wellness Layers ( TeleSofia (, Dario (, American Well (, Biolert (, Biogaming (, PhysioHome (, Vaica Medical (, Healarium (, KitCheck (, MST- Medical Surgical Technologies (, Kyma Medical (www., Kytera (www., Flometrica (, MedTrix (, Azure PCR (, Sport Tracker (www., LifeBEAM Technologies (, Hello Doctor (www., SHL Telemedicine (www., MedPal Health Solutions (www., iMDsoft (www., TeleMessage (, Ask Medic (, Essence Group (, Medikal (,   Nutrino (, LifeWatch (, Tyto (, Mom Sense (, CountingApp (,   eWaveMD (, Commwell Medical (, VG-Bio (, Fooducate (, Orpheus Medical (, Surgical Theater (, Webteb (, FDNA Accessible Genetics (, Totali (, Sensible Medical (, Aliment Health (!), LifeMap Sciences (, Aspect Imaging (, Beercadia (, Sleep Rate (, VoiceITT (, Irody (, Emerald Medical Applications (, Medintec (www., LogiTag (www., Oxitone (, MirOculus (,   LB Sight (, Mon4t (, Ovuline (,   Kanarit (, Prana Essentials (, enableteQ (, Hera Med (, Natura Systems (





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