GRAND RAPIDS — As a serial entrepreneur in the tech industry, Keith Brophy has become intimately familiar with product-development processes for software, websites and apps. With his newest tech venture — an app for smartphones and tablet computers — he had to learn an entirely new product-development skill set: how clinical trials are run.
The company Brophy heads up, Ideomed Inc., has developed an app called Abriiz that will help families treat children with severe asthma. The company has completed a 31-week clinical trial in rural Georgia involving 14 children with severe asthma and is on track to finish another trial in West Michigan early next year. Ideomed is planning a third trial in 2013 that will involve 60 children with severe asthma — half will use the app and the other half will not.
Ideomed worked with the Asthma & Allergy Association of Michigan, a pediatric medicine group, and Grand Rapids-based Spectrum Health on the Georgia trial, which was not required by the U.S. Food & Drug Administration.
That’s right: There is no regulatory approval needed for the Abriiz app, and the clinical trials are not required. Which raises the question: Why bother with all of this for a smartphone app?
“We do it to have a validated study and use it to tune the product,” Brophy explained. It gives Ideomed an additional “proof point” that will be important in selling the concept to insurance companies and, in the very near future, venture capital investors. The company plans to raise $3 million from VCs to grow and to expand into additional apps for other chronic medical conditions such as diabetes and hypertension.
The lengths to which Ideomed is going to develop the first app and prove its concept are tantamount to success as it chases one of health care’s new holy grails: using mobile health technology to reduce costly patient hospital visits while improving the quality of care. Dubbed “mHealth,” the new tech niche covers an array of technologies and uses — from managing medical data to helping people manage high-cost chronic medical conditions such as asthma, diabetes, heart failure and hypertension. It’s an estimated $230 million market that’s expected to grow to nearly $400 million by 2015, according to Mountain View, Calif.-based research firm Frost & Sullivan.
Thus far, the number of mHealth applications in Michigan has been sparse, save for health systems that have created their own like the Detroit Medical Center’s ER Wait Times app or Spectrum Health’s My Spectrum mobile app. Last month, Michigan Health Connect, a nonprofit health information exchange, reported more than 1,000 physicians in 422 practices across the state are using an app called iNexx to automate health care referrals for patients.
Other mHealth applications may come from some unlikely suspects. For example, Ford Motor Co. last year began testing new medical applications for its vehicles, including a car seat that would check the driver’s heart rate and a glucose monitoring system that will let the driver know if his or her blood sugar is low.
By comparison, Ideomed’s Abriiz app is a simple tech tool that’s aimed at changing or reinforcing behavior. Parents set up a log of their children’s medication schedules and the app sends them reminders via their smartphone or tablet computer to administer medication and to log daily doses. It can also be used to access information about asthma and to program repetitive motivators and incentives that will appeal to children. Parents, for example, can schedule a pizza party for their children if they adhere to their medication regimen for a set period.
“It’s really an empowerment tool,” Brophy said. “We’re respecting the role of the individual to actually make a difference for themselves.”
Ideomed was spun out nearly three years ago from Spectrum Innovations, a business unit of Spectrum Health. Doctors and clinicians at Spectrum Health have been involved in the product’s development, as has the health system’s affiliate, Priority Health.
The Abriiz system and future products planned by Ideomed, as well as mHealth technology in general, mesh well with the consumer-driven era of health care where patients are expected to become far more involved in managing their conditions, said Kris White, president of Spectrum Innovations.
“We all talk about getting people more involved and more engaged and becoming more accountable, but there are no great tools available. You need the ability to do so and this does it,” White said. “This is our future.”
Rather than providing care when a patient with a chronic condition has an episode or becomes acutely ill, resulting in them visiting the ER and getting admitted to the hospital, mHealth allows providers to better focus on preventative care, White said.
Spectrum Innovations is “very bullish” on the Ideomed technology, she said.
“We have to change something in health care. There is so much money,” White said. “So if we can help people become more involved and more engaged and stay out of the ER, that is the best part of managing our health care dollars. There is no loser in this scenario.”
Ideomed’s progress seems to suggest just that. The recent Georgia clinical trial on the Abriiz severe asthma system showed promising results. The trial ran for 31 weeks from October 2011 to May 20012 and involved 14 children with severe asthma who used Ideomed’s Abriiz web software and app. Among the results:
• The 14 children between the ages 8 and 11 had just one emergency room visit during the clinical trial, versus eight visits during the previous 12-month period.
• Thirteen out of 14 parents indicated their child took more responsibility for their asthma care using Abriiz.
• Twelve said their children self-monitor their conditions more often.
• Half of parents reported their children take their asthma medications more consistently.
• Ninety-two percent of parents said their children did not experience daytime asthma symptoms for more than three days per month at the end of the study, compared to 62 percent at the start.
• At the end of the study, all parents said their child’s asthma for the prior four weeks was either well or completely under control, versus 43 percent at the beginning of the trial some 31 weeks earlier.
Ideomed is following up the Georgia clinical trial with broader studies “to provide more statistically significant data,” said Brophy, who joined the company in January 2011.
Ideomed targets its software and apps for sale or licensing to health plans and insurers to incorporate Abriiz into their care management programs. The company so far has sold the package to four health insurance companies in Michigan, Kentucky and Florida. A home health care agency also bought a version to manage heart failure patients.
Brophy anticipates sales of $400,000 for the 2013 fiscal year that runs through June and $2 million in FY 2014, which will move Ideomed to the break-even point.
The ability to show potential investors third-party validation and revenues help to make Ideomed “venture ready,” said Patrick Morand, managing partner of the Southwest Michigan Life Science Venture Fund in Kalamazoo.
A key element on the company’s side as it seeks capital is that Ideomed’s platform is adaptable to other chronic medical conditions, providing the kind of opportunity for growth that investors like, Morand said.
“You can keep selling it and selling it,” Morand said. “That makes it an interesting prospect from a venture perspective.”
Ideomed recently rolled out a version of the Abriiz app for use on smartphones and e-readers that use the Android operating system to go along with its Apple iPhone and iPad version, furthering its market potential. The Apple and Android operating systems combined run about 85 percent of mobile devices, Brophy said.
The company recently won $25,000 in capital in the Accelerate Michigan business plan competition, funding that will help develop additional content for the app platform as Ideomed adapts it to other chronic medical conditions.
“It’s not a lot of money, but it’s enough to give us the booster effect,” Brophy said.
Ideomed plans to introduce software and an app for managing diabetes in the first half of 2013 and is working on versions for hypertension, chronic obstructive pulmonary disease, childhood obesity and women’s health. Ideomed aims to adapt the platform within two years to 16 different medical conditions.
“It can be tailored to fit all of them,” Brophy said.
To finance the future, Ideomed has begun what Brophy calls “active talks” with venture investors. He hopes to attract a combination of Michigan-based venture capital funds and larger funds on the west and east coasts, the latter of which could help Ideomed to penetrate markets on both sides of the country.
“A national VC can help us as we scale-up from coast to coast,” Brophy said.
Ideomed pursues growth at a time when its target customers, health insurers, place an increasingly higher emphasis on managing high-cost medical conditions to improve health and contain costs. At MiBiz’s recent Michigan’s Healthiest Employers awards, Priority Health CEO Mike Freed attributed nine dollars of every $10 that the health insurer spends on medical claims to members with one or more chronic medical condition.
“It’s definitely taking off,” Brophy said. “The timing is right.”