How new digital diagnostic tools can help repair health care

SAN FRANCISCO — Hospital misdiagnoses lead to as many as 40,500 patients dying annually. A panel of pioneering health entrepreneurs share how they are tackling this problem and discuss some of the challenges in building a health startup.

“For us and other hardware-based digital health companies, there are great signs,” said Erik Douglas, a founder of CellScope.  “People are interested in using these sorts of devices and willing to engage with technology in different ways.”

Cellscope makes a smartphone attachment “otoscope” that can snap images of middle ears. Using the CellScope, parents can capture photos of their children’s’ ear and transmit it to a doctor for remote diagnosis and treatment (and they can still bring their young ones in for a visit if necessary).

Ear infections are one of the most common reasons why kids go see doctors, and CellScope can help parents reduce the number of these expensive and time-consuming visits.

Making health care more accessible and diagnosis possible, outside of doctor’s offices, is one of the key themes of digital health.

Neurotrack one the health prize at this year’s SXSW. The company offers a computer-based cognitive test that can detect an impairment on the hippocampus, the first structure in the brain to be impacted by Alzheimer’s. The program evaluates patients’ eye movement — and the time spent looking at familiar and new images

“Alzheimers is a very complicated disease, and researchers and physicians are having really tough time making any kind of progress,” CEO Elli Kaplan said. “We though maybe we are approaching this wrong and could find different ways to diagnose disease.”

Neurotrack participated in healthcare startup incubator Rock Health. The program is now in its fifth class and has attracted a lot of attention from technology and life sciences investors. Founder Halle Tecco said digital health funding grew by more than 50 percent in 2012, and now venture capitalists are getting more comfortable and excited about investing in digital health companies.

“A tremendous amount of money is flowing into digital health right now, but there is still a gap between startups and the venture world,” Tecco said. “There are not a lot of angels or support between the beginning stages and the point where VCs get interested.”

Tecco outline some of the major challenges facing health care startups —  validating need for the product, long and “arduous” institutional sales cycles, a confusing regulatory environment, and recruiting talent with health care expertise and technical skills.

There is also a gap between the health-tech world and the academic/science world. One of the panelists was Dr. Katherine Pollard of the Gladstone Institutes. Dr. Pollard has spent most of her career doing genetic research.

“There is so much data sitting in laboratories and no-one is doing anything with it,” she said. “As scientists, we want our data and ideas to be translated and don’t know how to do it. Entrepreneurs may have the business expertise to translate these ideas.”