Q & A with Jeff Stinson
Updated: May 20
Director, HealthTech Arkansas
AT A TIME when the world has spent months in pandemic lockdown, when hospitals have been overwhelmed and supply chains are failing, many people are touting the potential of technology to revolutionize bloated and outmoded healthcare systems. As director of HealthTech Arkansas, a Little Rock-based venture capital fund and incubator focused on supporting early-stage tech companies in the healthcare sector, Jeff Stinson is in the perfect position to tell us what’s already here, what’s on the way, and how technology could help us be a whole lot better prepared next time.
On your LinkedIn profile, the common denominators are innovation, start-ups, and venture capital. Was there someone in your family who inspired you to follow this path?
No, I've just always been a business junkie. My older sister was a very successful engineer—when she graduated, she had like 14 job offers and just did really well. So later when I went to college, my parents said, “Jeff, you ought to go into engineering too.” Because of that, I gave mechanical engineering a shot, but I never was passionate about it. My passion was for business, so at some point in my college years I switched over to a business major, specifically accounting. While long-term I didn’t want to pursue an accounting career, accounting is sort of the language of business. If you understand accounting and finance, the rest of it is easier to learn.
So I got my CPA certificate and went to work with one of the large national CPA firms right out of college, which is a great way to start a career. After that I took a job with a publicly traded healthcare organization in Nashville—a home healthcare company. Somehow I convinced them to send me to Vanderbilt to get my MBA, and they paid for the whole thing, which was a godsend—there was no way I could’ve afforded that at that point in my career. So after my MBA I was corporate director of marketing for that healthcare organization—that’s where I began learning about the healthcare industry. Then in 1999 I moved to Little Rock.
Why did you move to Little Rock?
The official reason was that I followed a girl—it’s how a lot of people end up in Arkansas. But the reason I stayed is that Arkansas is just a much easier business environment to network and make relationships in. I started at a small private equity firm called Herrington Inc., in downtown Little Rock. One of the principles there was former Senator David Pryor, who to this day is one of the most beloved politicians to ever come from this state. And he just knows everybody, so to be able to work with him for a couple of years and meet so many people was fantastic.
I left Herrington in late 2001 to start my own consulting practice. Most of my career has been involved in investing in tech start-ups, or helping them from a business planning standpoint, trying to get them off the ground. Entrepreneurship is very much my focus, so for the past 15 years I've managed and led the state's very first angel investment fund, called Fund for Arkansas' Future. Over those 15 years we've invested a little over $10 million into 36 tech start-ups. And just recently we're pivoting from Fund for Arkansas' Future to a new network entity that will have broader participation across the state. Called Central Arkansas Angel Network, it's the same concept where entrepreneurs pitch their ideas to us—but instead of a fund investing in those companies, the individual members inside the network make their own decisions as to which companies they want to invest in.
HealthTech Arkansas is a program that's about three years old, and I run that in parallel with the others. By the way, HealthTech Arkansas has a very strong data science component. We recruit nationally and internationally for early-stage technology companies in three different areas. One is what we call digital health, which is just pure software companies. Second is connected medical devices—think about a device that captures or transmits data in some way. Third would be diagnostic platforms, which are all data driven as well. We recruit the best of those three types of companies and bring them to Arkansas to conduct pilot projects with the 11 provider organizations that are inside our coalition.
Those provider organizations are comprised of the nine largest hospitals and health systems in Arkansas, along with two large independent physician practices, Arkansas Urology and Ortho Arkansas. Last year we had about 170 applications from 18 countries that wanted to be a part of our program. Our provider organizations choose five or six of the applicants to be in the program every year. And they choose them based on what kind of company is going to add the most value to their operations right now; that could be by improving their quality of care, making them more efficient, reducing their costs, et cetera.
But we also want to choose organizations that can add value to those early-stage companies through the pilot projects. So we look for a good two-way value proposition, meaning value provided from the early-stage company to the hospital but also the hospital back to the early-stage company.
Give me an example of an early-stage company in your program and how it worked with the provider organizations.
Absolutely, and anybody who’s interested can go to our website (healthtecharkansas.com) and see the companies, organized by year, that have participated in our program. The one I want to tell you about is a New York-based company called Droice Labs, which went through the program in 2019. Droice Labs has developed an AI platform that essentially helps provider organizations identify missed diagnoses. Now that's different from a misdiagnosis, where something was diagnosed incorrectly. A missed diagnosis is something that could have been diagnosed but just wasn’t identified—it wasn’t even recognized by the provider organization, which happens quite a bit.
The Droice Labs platform takes all structured and unstructured data that floats around inside a provider organization. And that could come from the EMR, the electronic medical records, it could come from the pharmacy, it could come from any and all machines and devices that are used inside the organization.
So Droice Labs takes all of that data and they run it through their platform. And through artificial intelligence and machine learning, they create a profile of what they consider to be the diagnoses that should have been made for a particular patient. Then they present that information to a provider organization, and they bump it up against what was actually diagnosed. And based, for example, on a retrospective two-month study, they say here are the diagnoses that we think were missed by your physicians. And besides the clinical implications of missing a diagnosis, here is what the economic impact of that was. If you had identified the diagnoses that should’ve been made, and had billed for them the way they should’ve been billed, this is the lost revenue opportunity that did not flow through your organization.
Droice Labs can even drill it down to the specific physician level and say here are the physicians in your organization who’re most likely to miss these specific diagnoses. So it’s a good management tool for hospital administration to go back to those providers and say Hey, here’s what the platform shows. And, going forward, when the Droice Labs platform is converted from a retrospective study to a prospective tool, now the platform is connected to the EMR. When a patient comes in for a visit, the doctor can pull up the Droice Labs data and the analysis that was done on that data: Here’s what the platform believes, here’s how the patient can be diagnosed. The physician can see it in real time and use that data to complement his or her own observations. Not only can the physician use that platform to assist in making diagnoses, but it’s connected directly to the billing system.
A number of our provider organizations have adopted the Droice platform to help them identify missed diagnoses. The platform itself was built by five Columbia University Ph.D. students as part of their doctoral program. Then they realized, wow, this platform has commercial potential, and they actually marketed it first in Europe, where they signed up about 1,500 providers. Now they’ve leveraged HeathTech Arkansas to bring the platform into the U.S. market, by getting a foothold with some of our state’s providers. But they obviously haven’t stopped at Arkansas. They now have engagement across the nation.
How does your program work? You select five or six start-ups a year, right?
Yes. And we guarantee them that each company selected will get at least two pilot projects from Arkansas-based hospitals and physician practices. That can be structured as just an informal pilot where we just plug in your software, or connect a medical device and see what kind of impact it has for the hospital. Or it can be a very structured Institutional Review Board-approved clinical trial where there’s data aggregated and it comes out of the back end published in a scientific journal.
In terms of length, these pilot projects vary based on the type of project it is, and what the goals and scope might be. I would say generally they last between two and five months, which is a really big deal for these start-ups. Our hospitals are busy, complex places, and they have major organizations calling on them all day long, big healthcare companies like Medtronic, Boston Scientific, and Abbott Labs. And now even the big tech companies are calling—Amazon, Apple, and Google. So it’s really difficult for a start-up company to call a hospital and even get in the door. We think we're the only program in the country to guarantee hospital pilot projects for these early-stage companies. Because of that, we get an exceptional quality of company.
On your website, you say you focus on disruptive technologies. How do you define disruptive?
Basically it’s a meaningful shift in the way care is provided or operations are administered inside a hospital. In other words, our hospitals choose projects that have the potential to make the greatest impact. They're not looking for solutions that just tweak on the margins and have a small, incremental benefit. Because doing a pilot project with these start-ups is a lot of work. The pilots are unpaid, but it’s a real commitment of time on the part of the hospital. And time is the scarcest thing.
Tell me about other early-stage tech companies that are changing the way medicine is practiced.
In our 2019 cohort, we had a couple of medical device companies—BardyDX and toSense—both of which capture data on heart disease patients and attempt to diagnose when a patient is de-compensating—that is, going downhill—at home.
That data can be used to help prevent a hospital from having proximate readmissions, which brings hospitals a big penalty these days. In their shift to value-based care, the government emphasizes that hospitals need to do whatever they can to prevent patients from being readmitted within a certain time frame. If patients end up back in the hospital within 30 to 60 days, hospitals have to pay a penalty for that.
This puts a huge premium on the ability to monitor patients at home. There’s been a really big push in that direction in the last couple of years; in fact, in 2019 the Center for Medicare and Medicaid approved remote patient monitoring codes, meaning that providers can now get reimbursed for remotely monitoring their patients. In the not- too-distant future we’ll look back at this time and say we can’t believe patients weren’t monitored at home in a very smart, connected way. It just makes sense, and the highest-risk patients—for example, heart failure patients who have historically had very high readmission rates—are the ones now most likely to be sent home with remote patient monitoring.
Not only do we have the technology to identify vital signs like blood pressure and heart rate, but now we can measure very complex hemodynamic parameters, like cardiac output and stroke volume, and all of that data can flow up in real time to the cloud so care teams can monitor those patients. That, I think, is the future of medicine: More care will be shifted to an outpatient setting instead of inpatient at a hospital. And more patients will be monitored remotely.
I understand that one of your cutting-edge companies is providing its service free of charge during the Covid-19 crisis.
Yes, it’s a digital health company called Health Note, based in San Francisco. Of the 2019 companies that came through our program, they were the earliest-stage company. But they have tremendous potential. Their first pilot was with Arkansas Urology, and that went really well for both parties.
Health Note—and note is the key word, as in a physician note—uses a chat-bot-based technology so that prior to a patient’s visit to his doctor, that provider can engage with that patient through simple text messaging to capture all the information that a physician would want to know about that patient. It's not just personal data, such as updated address and phone number; it’s also, What are your symptoms? How are you feeling? In other words, everything a physician would ask a patient during that visit can now be gathered prior to the visit in a very intuitive text-based format.
This obviously facilitates patient check-in, but also physicians now don't have to spend as much time writing that note; they can just review it, edit it, and submit it. In fact, the CEO and co-founder of Health Note is a physician himself, and he thought, There’s got to be a better way to do this. I'm spending way too much time in my electronic medical records system writing these notes.
In relation to Covid-19, Health Note has developed a tool aimed at alleviating the surge of people who think they may have the virus just showing up at hospitals and physician practices. Not only do they burden the healthcare system by diverting resources and personal protective equipment, but they also risk exposing other patients and the clinical teams to the virus. So Health Note has modified their chat bot so that people can access it before they go to the emergency room or to their physician. It can also be used when they arrive at the emergency room. Essentially, it does the same text-based interface: Are you running a temperature? Do you have a headache? Do you feel tightness in your chest? Are you coughing?
It collects all this information and basically triages people into one of two lines, a green line and a blue line. If you’re showing symptoms and have a strong likelihood of having Covid-19, you’re in the green line and here’s where you should go. If you’re not showing a strong likelihood, you’re in the blue line: Stay home or go home and we'll figure out a different way to treat you so that you're not sapping our resources.
Arkansas Urology is actually using that Covid-19 triage tool right now for people who show up at their clinic, and a large Houston hospital is using it as well. And Health Note is providing this service at no charge right now, just trying to help.
Looking ahead to better days, what are the areas in U.S. healthcare that you think are in need of disruption? And what's out there that you see as possible game changers?
It's a good question. And I would say that the U.S. healthcare system has a lot of benefits, we do a lot of things really well. But the rise in healthcare costs per capita is unsustainable. That means there needs to be disruption in virtually every facet of healthcare, both from a clinical and an administrative standpoint. Clinically, patients need to be seen in a lower-cost setting, which means either in an outpatient setting or at home through telemedicine. Our hospitals should ultimately be used to see only the sickest of the sick patients.
From a clinical standpoint, there will be a push toward whatever can be done to help people stay well and not visit hospitals—think about all the tools that can be used to do that. Then from a supply-chain standpoint, how do we get hospitals the supplies and the equipment they need at the lowest cost? That’s where Amazon is coming in and completely disrupting the supply chain for hospitals.
In fact, all of the big three tech companies are disrupting healthcare in different ways.
Amazon is disrupting the supply chain. Apple is disrupting healthcare through devices—the Apple Watch already has the capability of doing a one-lead EKG. On your Apple Watch you can download the EKG app, press your finger to the side of the button, and take a 30-second EKG and have that sent straight to your provider. There are questions about how accurate that EKG is and whether or not it’s as good as one you would get inside a hospital or physician’s practice. It’s probably not, but it’s an indicator, it gives your physician data. Apple has an enormous amount of data showing that they’ve saved a lot of lives just through that EKG app, and the Apple Watch will just get better and better. I think they’re on the fifth generation now. Can you imagine what the Apple Watch is going to do on the tenth generation?
Google has amazing potential to disrupt healthcare through both data and imaging. Google Health has an entire team—and you can only imagine how smart those people are—that are using images as diagnostic platforms now. They can take an image of someone's eye and diagnose heart disease from that.
Walmart is disrupting healthcare through their clinics. In the United States there are more people in rural areas that have better access to their local Walmart than they do to a physician. So Walmart Health is developing these clinics inside their stores where people can get routine exams for like $30 or $45. I think Walmart is poised to disrupt the primary care model in a very major way, and that has implications for all of us. If they can increase access to care for people in rural areas, that makes a profound effect on the economics for us as a country.
What are your thoughts about coronavirus and technology?
At HealthTech Arkansas, we are a program for providers and by providers. By that I mean that our whole goal and mission is to introduce new technologies to our healthcare providers here inside Arkansas that makes them better in some way and enhances their quality of care, makes them more efficient, reduces their cost, and so on. But here’s the great irony of Covid-19: While there are technologies that are being brought to market—Health Note is one example of those—that can have a direct impact on a provider's ability to see and treat Covid-19 patients, because of Covid-19 our providers are completely heads-down and only treating what's there in front of them. Their ability to evaluate new technologies is really limited right now. So even when a hospital knows, wow, here’s a new technology sitting over here, and it could have a profound impact on our ability to treat Covid-19 patients, they still don't have the time or the resources to learn it, evaluate it, vet it, or implement it.
Once we pass over the hump and the curve flattens out a bit, I think our hospitals will be in a better position to evaluate some of these technologies, and that obviously has long-term positive implications. Through this Covid-19 experience, we’ve learned what we don’t know, both clinically and in regard to the supply chain. Technology can help us be ready for the next pandemic.