April 19 2011
by Todd Hixon

How Entrepreneurs Can Help Fix Health Care

I’ve long thought that health care entrepreneurship was about finding new and better treatments for disease.  Most innovations offer new therapies or diagnostics, often at very high price points: e.g., drug-eluting coronary artery stents and erythropoietin (EPO), a bio-pharmaceutical that promotes blood cell production, were expensive, breakthrough capabilities that became major businesses.

There is another class of healthcare innovations about which we are very excited: new business models, based mostly on available technology, that take big chunks of cost out of health care.  Three of our companies do this; I’ve blogged about them before (here).  Last week I came across another, truly inspiring example.

Professor Raskar and Students; Photo credit: MIT Media Lab

Professor Ramesh Raskar at the MIT Media Lab and his students (pictured above) developed a substitute for the phoropter (left below), first patented in 1932, which optometrists use to determine vision correction.  Prof. Raskar’s group’s device (right below) is based mostly on off-the-shelf technology: a smart phone, an app, and an add-on optic that costs $2.  It’s called NETRA, the Sanskrit word for “eye”.  A patient measures her eyes by lining up images in the optic.  The app then determines the prescription. (Details here.)

Photo credits: Wikipedia and MIT Media Lab

NETRA would replace the phoropter and make optometrists far more productive, enabling delivery of a prescription and basic eyeglasses for something like 20% of the going price for basic glasses in the U.S.

The accuracy of NETRA’s measurements is limited by the resolution of the smart phone’s screen.  With today’s phones, NETRA can measure the near/far vision correction with 0.30 diopter accuracy.  Glasses are typically prescribed in diopter increments of 0.25, so NETRA is close to clinical practice. But this may be good enough: pre-made drug store reading glasses are usually offered in 0.50 diopter increments.

Our medical system typically resists innovations like this.  Practitioners and technology vendors drive to higher value added, which leads to higher fee/reimbursement per procedure.  Everyone wants a good outcome, and tort lawyers prey on bad ones, so practitioners go for safety over cost-effectiveness.  Historically a third party paid the bill, so patients did not complain. The greatest obstacle for NETRA would probably be resistance from optometric professional groups.

But we are entering an era of unaffordable health care, leading to increasing patient cost-sharing.  80/20 solutions like NETRA (80% of the accuracy at 20% of the cost) will get attention.  And entrepreneurs are just the people to identify these opportunities and find ways to push them into the market.

Professor Raskar is a social entrepreneur.  He has chosen to focus NETRA on providing vision care to the 200 million people in India who need glasses, cannot afford them, and are consequently condemned to functional blindness and poverty.

This example shows what can be done with off-the-shelf technology and a new business model.  We’re looking for entrepreneurs with whom we can work on projects like NETRA to help fix the U.S. health care mess.

Comments are closed.

Top of the page