My brother recently went to the top hospital in USA (Mayo clinic) to confirm that a specialist doctor had wrongly given him a hormone injection to relieve a minor cold shoulder problem. Although the doctor was told that Matson was allergic to steroids, he gave him two shots (containing steroids) resulting in a debilitating attack on his nervous system. And although the Mayo clinic diagnosed the cause, there simply were not enough documented cases for them to recommend a treatment and not enough money to fund any research. I think there are millions of cases like Matson causing poor quality of life and lost productivity which would benefit from a different medical research model. Call it personalised medicine or miracle cures, we are on the verge of releasing unprecedented productivity through the use of AI (Machine Learning and Deep Learning).
There are now 3 major funding trends helping to cure problems with health. 1) Large (Mega) VC funding rounds on health, 2) Asia spending more than USA, and 3) Patent surge from Facebook, Apple, Microsoft and Amazon.
iCarbonX has $1.3 Billion in VC funding
iCarbonX, a health start-up in health/AI and based in China is one of the new players focused on capturing all the health data to make personalised medicine possible. China has taken a HUGE interest in AI and look like they are the largest investor in health/AI. China’s strategy is to be an AI leader and are applying their investments across several industries including healthcare. China is in short supply of radiologists and other specialist with demand growing faster than supply. Using Deep Learning to scan x-rays and find anomalies is a practical productivity play. Interestingly, the balance of global Venture Capital investment is slowly shifting to Asia, especially with AI. Softbank has their $100B VC fund and have provided many giant investments that their VC counterparts cannot match. (See below references on Softbank and CB Insight on AI funding.)
Health and AI is gaining traction
A typical problem in healthcare is that complex cases get lower priority due to overwhelming demand. Simple cases should be going to GP and the more chronic, serious or difficult cases are either referred to specialist or hospital surgeon. This is the expected flow. Others visit hospitals in an emergency. The outliers are supposed to be few, but we know there are huge numbers of people seen in emergency wards that are treatable by regular GPs. And there are many aged people in hospital beds that really should be cared for at home or in an aged care facility. One attempt to address this is from Johns Hopkins hospital, one of the largest in the USA is using AI to run a predictive model that triages inquiries on a large scale. With 500 messages per minute across their multiple centres, AI is already giving them upto 60% productivity increase in handling complex cases.
More than 300 patents related to health from Google, Microsoft, Apple and Amazon
All the large tech players in USA and China are working a health/AI angle. Google, Microsoft, Apple and Amazon have over 300 patents related to health. Tencent, Baidu and Alibaba are not far behind. There seems to be a push to solve the many issues with the existing health system. Even Warren Buffett, Jeff Bezos and Jamie Dimon have a health joint venture to solve problems for their million plus staff.
Perhaps most exciting is the recent surge in AI venture capital towards health. This is a significant indicator since it is usually the finance/telco/technology triads that get the most attention in early stage market trends.
What are other pain points that Big Data and AI can solve?
In general, to solve problems with AI, you need large amounts of data. Health care has tons of data and start-ups are leveraging this to solve problems. Deloittes talks about the key trend of moving from volume to value, which means health leaders are looking more into the customer experience. Tie this with the pressure to do more with less and legacy systems that need transformation and we have enormous work to do at the macro level.
The big pain point is the amount of money spent each year and the possible runaway cost associated with the aging population. The pending threat of antibiotic resistant diseases or other epidemic(s) is clearly a problem worth solving. And getting cures to market economically and quickly is probably just as important as freeing nurses from plethora of administrative work.
Why? – The economic payback in healthcare market is BIG
According to Deloitte’s, the global spend on healthcare is expected to be $8.7 Trillion USD by 2020. As Australia’s is a $1.2 Trillion economy, global health care spend is 8 times the size of our GDP. Health care represents a sizable portion of many of the OECD economies, representing around $1 out of every $10 spent, including Australia. Australia spends about $4,700 USD ($6K AUD) per person with USA spending more than 3 times that at $17K ($22K AUD) per person annually. As much of the expense is shouldered by governments, they are a major stakeholder in getting more productivity.
Investment in health care is large and growing
With aging and growing populations, there is a huge need for disrupting the status quo to solve current and future capacity issues. Solving problems in the health care sector is broadly seen by large investments in pharmaceuticals and biotechnology. These two health areas get a huge share of VC investment, with $16.6B USD (of $155B) in 2017 according to KPMG.
Health care is a place of innovation for AI
Out of this $16.6 B USD, $718M USD ($950M AUD) was invested in AI startups targeting health care. (See Pitchbook reference below.) CB Insights has been tracking AI venture capital investments and health care is the most exciting area. They have tracked investment in the health AI space from 2013 to 1Q 2018 as $3.6B USD out of the $34B total in AI. Some of the target areas:
- Upto 50% productivity improvement is possible using AI to support nurses
- More accurate and faster diagnotic screening
- AI powered treatment systems
- Forecast and predict epidemics
- Predict high-risk patient groups and matching therapies
- Replace inefficient generalised medicine with tailored drugs and treatments could save $10 Trillion globally (personalised medicines)
According to MGI, those in health care that have adopted AI and have a proactive strategy have at least a 15% profit advantage over their non-adopting peers (See MGI report referenced below.)
With 3 major funding trends like Mega VC funding rounds, Asia spending more than USA and increased attention from cashed up technology giants, health care is poised to change forever. For cases like my brother Matson, the change can’t come soon enough.
If you know of other start-ups using AI in health sector, put a note in the comments.
- See Deloitte’s 2018 Global health care outlook.
- See PitchBook’s overview of recent investment in AI for Healthcare in 1Q 2018, AI’s Health Exam
- See KPMG 2017 global venture capital report
- McKenzie Global Institute has a great AI discussion paper, see MGI’s Artificial Intelligence discussion paper
- CB Insights provides a variety of information on where venture capital is going. For the full report showing the top 100 start ups in health care AI space, see here
- Registered health worker data can be see on government health website.
- The Australian did a summary of the workforce based on ABS data. You can see that Health care and social assistance represented the largest area of growth in their report.
- This Nikkei Asia Review article gives a brief overview of how Japan’s SoftBank is investing in Big Data and AI.
- Google, Microsoft and Apple file 300 health patents, see this article.
- Amazon’s heart monitoring patent
- The big five SA technology have lots of patents, including those in healthcare, seen here in a report by CB Insights.
- Apple focused on healthcare through its iPhone and Apple watch, see this report from CB Insights
- From a great website called tech emergence, here is a great list of start-ups in the health/AI space.
Health AI investment is largely outside of Australia
Out of the 100 or more Australian start-ups that have gotten to funding stage, only two are using AI in the health sector: