Bringing Moore’s Law to Healthcare
Proteus Digital Health is an “intelligent medicine” company based out of Redwood City, California. It is part medical device company, part tech company, part semiconductor company. Proteus is trying to revolutionize the way people take their medicines by allowing real-time tracking of medicine ingestion patterns as well as real-time monitoring of vitals (temperature, heart-rate, activity levels). Andy Thompson, CEO of Proteus, argues that thus far, as a society we have been unable to capitalize on the advancements in availability of processing power to lower the costs of our healthcare. Proteus seeks to marry technological breakthroughs with health trends to improve healthcare while lowering its cost. 1
Did you forget to take your pills again?
Proteus’s business model is based around “compliance” data which suggests that about 50% of medicines in developed countries are not taken correctly by patients.2 Non-adherence can lead to incorrect dosing adjustments when patients return to the doctor’s office, or in preventable emergency room visits or complications, the cost of which far exceed the cost of the medicine. By allowing patients, doctors, and secondary caretakers such as family members to better track and improve compliance, Proteus seeks to improve patient health and lower emergency room visits, while at the same time reducing the burden on healthcare systems worldwide.
To deliver on this value proposition, Proteus has had to develop both wearable and edible technology. The Proteus system is comprised of an ingestible microchip, a sensory patch, and a mobile app. First the patient puts on a blue-tooth enabled dermal patch which gathers vitals, then, whenever the patient swallows one of their medicines, the microchip inside the medicine (it’s the size of a grain of sand) activates in the stomach fluid and sends an electrical signal through the patient’s body which is registered by the patch. The information is then sent out to the patient’s phone via blue tooth, and from the phone to the cloud, where data can be processed and analyzed.3
Is Big Brother watching?
This technology could have a broader societal impact as well. In order to further monetize this idea, and bring even more value to patients, Proteus Digital Health could leverage the value of its data to disrupt other industries. One could easily imagine insurance companies offering better rates to patients who agree to use the Proteus system. Automotive insurance companies like Progressive and State Farm are already experimenting with driver-tracking technology to offer performance based rates, the same could be applied to healthcare.4 The problem of “freeloading”, where a small percentage of the population generates the majority of costs is incredibly pronounced in healthcare, and programs like these could help make health insurance rates more fair. Of course, some patients may be reluctant to embrace this use of their private data, but I strongly believe that on aggregate, we would be better off if more people embraced the idea that in our day and age, privacy is a myth.
Valuation: $1 Billion / # of Products Sold: ZERO
One of the most fascinating aspects of Proteus, and the digital health industry in general, is the amount of money coming in from investors, before products have even been proven to have the desired effect. Sure, they work technically, but that does not ensure broad adoption and widespread use by consumers. Over the course of its existence, Proteus has raised about $400 million in equity funding, at a valuation of $1.1 Billion, $50 million of which was raised as recently as April of this year.5 Investors are placing large, double-down bets on these companies, hoping to cash in once they take off, but will they?
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 MedCityNews. Healthcare Epitomizes the reverse of Moore’s law. Website [link]. Accessed November 2016
 Sabate E. Adherence to long-term therapies: evidence for action. World Health Organization. 2003 [link]
 Proteus Digital Health Website. [link] Accessed November 2016
 Fortune. Why Car Owners Are Rejecting Insurance Discounts. [link] Accessed November 2016
 Wall Street Journal. Billion Dollar Health Startups. Website. [link] Accessed November 2016
Youtube Video – Proteus Youtube Channel
Image – Proteus Website. Accessed November 2016.