They make the perfect couple.
On the one side are some 1,600 Israeli companies in the healthcare segment, most of them startups, according to the Israel Advanced Technology Industries trade group. About half are focused on medical devices, but some 300 are in healthcare information technology, 130 in diagnostics and 210 in therapeutics.
Among the most successful, the robotic-surgery company Mazor Robotics was sold last year for $1.6 billion and NeuroDerm, a developer of next-generation treatments for central nervous system disorders, was acquired in 2017 for $1.1 billion.
On the other side is a healthcare market split between just for health maintenance organizations. They not only provide doctors and laboratory tests, they provide insurance and operate hospitals. Most Israelis stick to their HMO over their lifetimes. The HMOs are a treasure trove of data. Israeli doctors have a reputation for being early adopters of new technology.
“Maccabi and Clalilt [the two biggest Israeli HMOs] are well aware that they have digitized medial data going back many years, both from clinics and from hospitals,” said Amir Golan, vice president for marketing and sales at the healthcare startup DayTwo. “The data is a gold mine.”
In most countries the healthcare market is broken up into different providers – there are individual practitioners, clinics and hospitals, pharmacies and insurance companies. Patients often switch providers. That makes it very difficult to assemble good demographic data over time.
There’s also a big emphasis on preventive medicine. “In the United States, for example, there aren’t incentives for preventive medicine, but in Israel the HMOs have an interest because the odds are that a person will remain with the same HMO all his life,” Golan explained.
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In fact, the two sides have started dating. Over the last 2-3 years, more and more of the HMOs have begun using products and services developed by local startups and DayTwo is one example.
The startup has developed a system to create a personalized diet based on an individual’s gut microbiome and lifestyle. The product is based on a five year research conducted by Profs. Eran Segal and Eran Elinav of the Weizmann Institute of Science.
“Clalit Health Services has 4.5 million members, of whom 350,000 suffer from type 2 diabetes,” said Golan. “We help people to balance their blood sugar level by a personally designed diet – we study to medical profile of the patient and recommend a personal menu.”
Since last October DayTwo’s service, which requires a user to provide a stool sample and gets back a personalized nutrition app, has been offered Clalit members at a subsidized rate of 800 shekels ($222), versus the ordinary price of 1,350.
“That includes two meetings with a dietician because when a patient enters the program accompanied by a dietician we see very good results,” Golan explains.
Lior Wolf, who is in charge of online services at Clalit, said patients benefit from the speed at which the startup world operates. “Companies are able to integrate and develop a solutions in short order, something that bigger organization like ours can even dream of,” he said.
Another example of startup that has partners with Clalilt is TytoCare, whose a handheld examination performs the remote diagnosis of acute care situations in children.
The device can examine the lungs, heart, skin, ears, throat and abdomen and measure body temperature to help diagnose ear infections, sore throats, fever, cold and flu, allergies, stomach aches, upper respiratory infections, coughs and rashes.
“When we started in 2012, no one believed that a person without medical training could from home examine an ear drum or place a stethoscope in the right place,” said Ofer Tzadik, the startups chief operation officer and co-founder.
Since last June, TytoCare’s device has been offered to Clalit members at at subsidized price of 450 shekels, with medical support services included for free. Since then, Tzadik says, thousands of the devices have been sold in Israel.
“We are working with to healthcare organizations around the world, but it is our flagship organization in Israel. They were the first to really adopt telemedicine 10 years ago and so we went to them,” he said. “Both sides benefit from the cooperation.”
TytoCare started a clinical trial with Clalit at the Schneider Children’s Hospital that showed the device did well at reaching the same diagnosis a doctor made in a face-to-face examination.
Wolf said when he first met TytoCare’s founders they had little more than idea, but he liked the idea because it addressed a very common problem of people who are basically healthy and don’t want to be running off to a doctor at seven in the morning.
“Four years ago, when I brought them to the CEO for the first time, they had a device that looked like an old-fashioned cell phone, but we had enough patience to move forward with them,” said Wolf.
“It’s not easy to work in a large organization like ours There are a lot of committees and processes you have to go through, our people will also examine the product and Schneider’s doctors will have to say, ‘Yes, it’s good.’ In the end we were ready to go.”
At Maccabi, the HMO has since March 2018 incorporated digital pathology to its services. For instance, if a patient undergoes a biopsy for prostate cancer, the result’s will be analyses by a human pathologist and a system developed by the two-year-old Israeli startup Ibex. Its technology uses artificial intelligence to examine images.
“After the laboratory examines the specimen, it goes through our system, and if it thinks that a mistake’s been made, it raises a red flag. It is the first in the world to be installed in such a system,” explained Yossi Mossel, co-founder and CEO. “Our product is the first in the world to be incorporated into a system like this.”
Mosser said Ibex first approached Maccabi at a very early stage in the product’s development and signed a strategic cooperation agreement,
“The most important thing that Maccabi gave us was data on which we could do our tests while, of course, committing ourselves to all the principles of medical secrecy and information security,” he said. “Maccabi has an archive of six million slides of pathological exams, and we put a computer there to scans them and train our algorithm.”
Prof. Varda Shalev, director of Maccabi’s Institute for Health Research and Innovation, calls the Ibex system the “Iron Dome” of its pathology operations, a reference to the Israel army’s famed anti-rocket system.
“It’s happened to us that a pathologist has made an examination and his finding is negative, but the Ibex system examined it, too, after correctly found that the patient did have prostate cancer,” she said.
Collaboration between the HMOs and startups usually involves complex contract terms. Among other things, the startups pay for access to the HMOs’ data, but the cost is worth it.
In any case, the costs are often subsidized at rates of up to 50% by the government Israel Innovation Authority, which has been promoting such tie-ups. In 2018, the government approved a $300 million initiative for big data utilization, to make this large pool of data available to researchers, entrepreneurs and medical institutions.
“Everyone wins,” said Yizhar Laufer of the Leumit HMO, “because the HMO gets paid, the startup gets help from the outside and the government knows it is investing in the right places. We at the Leumit meet with dozens of start-ups from various fields, and with some of them we are moving towards a launch.”