As the pandemic unevenly roars on, Emily Melton, founder and managing partner of Threshold VC, is reflecting on a previous public health crisis: the Spanish flu.
She says the response just over a century ago prompted the rise of interventional medicine — treating illness through surgery or medicine only after symptoms manifest. Today, interventional medicine is the dominant mindset in Western healthcare. And, Melton, a lead investor in health tech startups including Livongo, Tia and Calibrate, says the care pathway ages well.
“What’s happening in our society? Chronic diseases, chronic pain, diabetes and obesity,” she said. “That doesn’t require a magic pill and there’s not just a surgery. Oftentimes, there’s therapeutic components, behavior changes and movable touch points.”
Enter personalized medicine. The buzzy yet powerful framing is growing in popularity among Silicon Valley startups. It’s a delivery system in which patients receive more holistic care that takes into account multiple symptoms or comorbidities. In hormonal health, for example, personalized medicine could add more data and specificity to which birth control someone takes, instead of the usual process of trial and error. Essentially, it’s the opposite of interventional medicine.
“We’re not just an arm or a leg, we’re not just obese or a diabetic or a pain sufferer,” Melton said. “How do we treat you as a whole person?”
A number of companies are using this approach to reinvent care for patients with musculoskeletal (MSK) medical conditions and chronic pain. These conditions are commonly treated with addictive opioids, a major public health concern. As an estimated 50 million Americans suffer from chronic pain, entrepreneurs are working on solutions that don’t resemble the cookie-cutter status quo. And the money market is certainly there: In 2017, the global MSK medical market was valued at $57.4 billion; the market for chronic pain, which overlaps with MSK medicine, is expected to hit $151.7 billion in value by 2030.
“Oftentimes it’s not new ideas, it’s conflating a number of factors that come together at one moment in time that allow exponential change that makes a startup work,” Melton said, of the boom and recent activity in MSK medicine. Today, we’ll focus on three startups taking different approaches to help people suffering from chronic pain and MSK-related conditions: Clearing, PeerWell and Hinge Health.
Clearing
Avi Dorfman says going direct to consumers is the most effective way to treat chronic pain, so he founded Clearing. The digital health startup worked with a medical advisory board of physicians and researchers from Harvard, Johns Hopkins and NYC’s Hospital for Special Surgery to create an opioid-free solution for people struggling with pain.
Last month, Clearing raised a $20 million seed round led by Bessemer and Founders Fund. Melton also invested in the round on behalf of Threshold.
Clearing offers four products: prescription compound cream that includes FDA-approved ingredients, CBD cream for topical discomfort, nutraceuticals to supplement joint health, and a directory of prerecorded, at-home exercises. It currently is available to patients in California, Florida, Georgia, Illinois, New York, North Carolina, Ohio, Pennsylvania, Tennessee and Texas.
If a patient is in their coverage zone, they can go through a virtual intake form, where they describe the pain through a series of asynchronous questions. Dr. Jacob Hascalovici, Clearing’s co-founder and chief medical officer, helped develop the form so clinicians could get to a diagnostic hypothesis faster.
“There are three fundamental types of pain: There’s nerve pain, there’s muscle pain, and there’s bone/joint pain,” Dorfman said. “Most people will fall into either one of those three buckets or they’ll fall into a mixed category between two of those three buckets.” After the pain is benchmarked, patients receive plan options with varying levels of strength and concentrate. The products are delivered to the customer’s door with clinician-led follow-ups on a rolling basis.
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The company offers a monthly or semi-monthly shipment plan, ranging between $30 to $70 per month. “We know there can be some patients who it doesn’t work for whatever reason,” Dorfman said. “This is pain, it’s highly subjective, your version of reality is all that matters.”
One of Clearing’s biggest differentiators is that it’s going direct-to-consumer, a concept in healthcare popularized by companies like Ro or Hims and Hers. While those companies focus on primary care services, companies like Clearing are hoping to go one step more niche with their focus — and add a layer of specificity to nuanced conditions like chronic pain.
“When you create a solution that’s sold to self-insured employers and payers, you’re telling patients what they want,” Dorfman said. “When you create a direct-to-consumer solution, you’re asking patients what they need.”
PeerWell
San Francisco-based PeerWell, which raised $6.5 million in Series A funding in 2019, is working on the end-to-end journey of MSK care, from pain management to pre-surgery and postoperative care.
CEO and co-founder Manish Shah said the company chose to work with in-network providers to go to market, instead of the “simple pathway” where customers pay out of pocket. This approach integrates with workers’ compensation programs, employer-bought health plans and existing payers.
“Most people struggling with pain and immobility don’t always have the cash to pay out of pocket,” Shah said. “It’s easier for us to stand up as a service [and] have people pay directly, with cash, but it doesn’t actually allow us to have the impact or reach the people that we think truly need [us] for their pain.”
The startup has spent the past three years working on a new clinical practice, PeerWell Health, which launched earlier this month. The full-stack healthcare provider focuses on five pillars: physical therapy, nutrition, pain and wellness — which includes opioid-free techniques to manage symptoms, life management (or mental health) and health literacy.
“Personalized can mean a lot of things, like you’re using AI to do things and refine it down to what a patient might need,” Shah said. “But I think about the emphasis on the ‘person’ side of it.”
The company meets a patient, and then walks them through these five pillars and caters each to their individual backgrounds. It’s an ethos that Shah thinks needs to be more common in health tech: First think about the goals and impediments that a patient has and then brainstorm solutions, instead of introducing the patient to a number of offerings that may not be right for them.
Alongside the launch of its clinic, PeerWell added Dr. Jonathan Slotkin, the vice chair of neurosurgery at Geisinger and chief medical officer of Contigo Health, to its board of directors.
“The companies that will bring the most value to patients and succeed in this space will bring the right combination of tech and touch, the right combination of virtual and live visits, and really start focusing on the areas of patient’s lives that impact these conditions, like obesity, smoking and diabetes.” While most of PeerWell’s products are virtual, Shah agrees with Slotkin, and thinks that in-person care should be an option for patients who might need escalated service. Eventually, PeerWell is considering opening up its own brick-and-mortar physical therapy centers.
Hinge Health
San Francisco-based Hinge Health is one of the biggest startups in the MSK sector, last valued at $3 billion in a $300 million round led by Coatue and Tiger Global. This financing increased its valuation by 6x, showing a significant increase, at least from investor perspectives, in Hinge Health’s value proposition, which comes as it is reportedly eyeing an IPO in 2022.
Similar to PeerWell, Hinge Health focuses on selling directly to U.S. employers and health plans, reaching over 150,000 people to date.
While Hinge Health relies on largely virtual and asynchronous care delivery, part of its business tackles Slotkin’s “tech and touch” perspective. The company gives every patient a tablet and wearable to promote better access, and data, to and for MSK care. Over time, smartphones have become a common proxy for those tablets thanks to advances in technology and bandwidth.
CEO Daniel Perez thinks that at some point, Hinge Health will have to go one step further: the in-person route.
“If you really want to be an end-to-end musculoskeletal solution at some point, and you’ve reached the limits of what digital care can provide, how could you then mediate in-person care?” he asked. He estimates that Hinge Health will have “some bricks” to its name — think physical operations that patients can go to — in the next five years.
For now, personalized virtual health is the top priority. Last July, Hinge Health announced its plan to launch a digital MSK clinic that bundled up the entire spectrum of conditions: prevention, acute, chronic and surgery.
“I need to give a warehouse worker whose job type — be it lifting boxes or being sedentary — puts them at risk for increased back and joint pain, a very different treatment than I would give you if you were hiking with your kids and you sprained your ankle,” said Hinge Health CEO Daniel Perez. “And that’s one of the reasons why it’s been so difficult to achieve proper scale in musculoskeletal care, because a lot of companies don’t have an appreciation for how wide and challenging musculoskeletal care is, and how different the modalities must be.”
Perez said this complexity is a key note new health tech startups should keep in mind when trying to launch. As for the choice to go in-network instead of out of pocket, Perez agreed with PeerWell’s Shah by saying that Hinge Health believed it could be more accessible that way.
“Now there are not many people who have a knee replacement and want to pay cash out,” he said. “99% of us and our knee replacements are through insurance. Most healthcare costs should be through insurance, they will not be through cash pay because they shouldn’t be — it would bankrupt America.”
What’s next for MSK medicine?
There’s a market for personalized MSK medicine, but challenges still await any startup that wants to break into it.
The companies mentioned here represent just a slice of the of MSK medical market; many startups have entered the space, including but not limited to: Kaia Health, SpineZone, Physera, SWORD Health and Reflexion Health.
As nature dictates, some of these will eventually consolidate to offer insurers and consumers a broader range of services in one spot. For example, diabetes management company Omada purchased Physera last year. This gave potential customers two options: an MSK-specific company like Hinge Health, or Omada, which covers pre-diabetes, diabetes, behavioral health, hypertension and MSK.
Second, even though the COVID-19 pandemic accelerated the adoption of digital health solutions, in-person care is necessary for many MSK conditions. But, for startups, it is not as simple as partnering with a provider. One specialist we spoke to on background said providers are incentivized to perform MSK-related surgeries, because that’s where they get the most money. Going upstream like PeerWell, for example, could thus clash with a traditional provider’s mission. As a result, startups could find themselves limited and may find it necessary to create their own brick-and-mortar operations.
On the bright side: in the past, most MSK apps did not include involvement from healthcare professionals. The startups we talked about today all have clinical boards involved with the creation and administration of their products, suggesting some maturity in that vein. Clearing wants to bring direct-to-consumer healthcare to chronic pain, by offering a line of products as well as virtual exercises and a health coach. PeerWell is going in-network, focusing on five key pillars in its care delivery: physical therapy, nutrition, pain and wellness, life management (or mental health) and health literacy. And Hinge Health is viewing — and addressing — the entire world of MSK as a spectrum, from prevention, acute, chronic and surgery.
Personalized health needs a hit, and proof, before other conditions can follow suit and the idea becomes a mainstream care pathway versus interventional medicine. The healthcare system has a ways to go before ideas like digital end-to-end clinics, personalized health and on-demand, direct-to-consumer solutions become more reality than buzzwords. A wave of entrepreneurs in MSK medicine have resolved to try to make that happen, complexity be damned.
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