Amidst all the bad news about skyrocketed health care spendings, you may be surprised to know that the growth rate for health care expenditure has actually been slowing down the last few years. Though still higher than inflation, national health expenditure grew by 4.3% in 2012, for example. As we come out of the recession, the question is, “Will the spending growth rate remain low? Will there be a day we can even get to the point of negative growth and begin to reduce overall medical expenditure?”

But affordability is not the only problem we have. Access to health care is also an issue, and according to a study by X Prize Foundation, three out of four people have difficulty getting doctor’s appointments or receiving after hour care without visiting an emergency room, which, as you know, usually costs far more than a regular visit to your own doctor.

So, what if we could give consumers more choices as to when, where, and how they receive health care? When so many industries are already giving their customers the power to choose, will we the same in health care? And would it have the same impact? That’s what X Prize Foundation is hoping to prove.  It is challenging the existing paradigm by launching a $10 million competition.  The goal is to incentivize innovators to create a device that could bring radical change to the way we manage our health and how the medical community serves us. Mark Winter, who is the senior director at X PRIZE Foundation, joined me on the Business Reinvention show last a few weeks ago to talk about the vision for this ambitious program.

Nancy:                                 The goal of the Tricorder Prize is to develop a new mobile health care device. How will it be different from the new Apple iWatch or Nike’s Fuel Band which already ? From what I understand, Apple’s new product will  understand where you are, what you have eaten, how many calories you burned and how well you have slept.  How will your device deliver benefits that no one else has?

 Mark:                                    The Tricorder prize, and there’s a companion competition, the Nokia Sensing X Challenge, are intended to really be game changers in the area of personalized mobile health technology. Some of the characteristics of the market today are just what you described. There’s a lot of different solutions proliferating very quickly in the areas of personal health tools that will keep an eye on your weight, how many steps you take. And those are all very good technologies, and it’s a logical progression.

But the progression is leading into more significant health monitoring opportunities, health interpretation opportunities that go beyond physical fitness and exercise. And I think that what our competition is intending to do is to help the industry make that transition into a much more robust health management-oriented solution. And also assure that there will be a wide range of sensors, different kinds of bio-sensors, area sensors and other types of sensing technology that can address the very diverse health needs of very large populations of people. So those are the two big goals of these two competitions, the Qualcomm Tricorder X Prize and the Nokia Sensing X Challenge.

 Nancy:                                  It’s interesting how you define the product challenge as data interpretation.

 In the article, “Diabetic’s Paradox.”, the reporters were talking about how self-monitoring is increasingly being recommended for all sorts of health conditions, as physicians see self-management as a way to empower patients and enlist their self-interest as a positive force.  But then surveys show that patients see self-management as a new responsibility, and a lot of times, a burden. And it elevated their level of anxiety and depression, surprisingly. So in addition to emotional burden, there are issues with self-motivation and poor user experience. But the other challenge is that consumers don’t always know what to do with the data and how to decide whether to eat, or whether to take an insulin injection. And it’s just  too complicated for a patient. It sounds to me that you’re looking for a device that will address that missing link about what to do with the data. Is that right?

Mark:                                    That’s correct. I have a story about glucometers, because they’re a great story to tell about the evolution of these sorts of personal medical devices, or, put another way, devices that move from the clinical to the personal. One of the things that is a unique feature of the Qualcomm Tricorder X Prize, is the robustness of the platform that the personal device will represent in terms of information display.

 It’s likely, although not a requirement of the competition, that both iOS, that’s Apple iPhone, and Android hand-held devices will play an important role in this solution, which generally requires that the entire package is under a total of 5 pounds or less.

The unparalleled amount of computing horsepower and high resolution information display, and the ability for programmers to create rich informatics and communication suggests that the Tricorder will be a far more communicative device.  It can explain the health conditions that are being monitored technically on much more humanistic terms, in ways that ordinary people can understand and take action on.

 Those are really critical requirements of the competition. In fact, fully 40% of the scoring on this device is focused on the human experience and the user interface and human factors issues, because we recognize early in designing this competition and how important those would be for a consumer facing device, not a clinical device designed for nurses or doctors.

 Nancy:                                  One of the ideas that is very central to this particular challenge is that with more options or consumer empowerment, there will be a better health care system or health care. Is there any indication that consumer empowerment can lead to cost reduction or improvement in health care?

 Mark:                                    Without a doubt. I think that we are also experiencing another interesting piece of convergence is that everybody knows, starting in 2014, the Affordable Care Act is showing up on the scene. The Patient Protection and Affordable Care Act is the most profound change that has occurred in the American health care scene, probably for the last 200 years or more, as long as there has been health care industry; and some of its key features and provisions that are quite extraordinary is, first of all, no longer allowing exclusions for pre-existing conditions and preventative care focus. Then certainly, the ability to pay for wellness, not for sicknesses, is the key feature of the focus that it’s bringing. But all of this is wrapped around the idea that we can lower costs.

                                                What that really means, how we really lower costs as the health care industry is perceived, is that first of all, finding ways to avoid misusing the emergency room facility at most hospitals. It’s been know for years that an unnecessary visit to the ER for a condition that does not warrant and displaces, in fact, other patients who really need the ER, is one of the largest cost drivers.

  The second is being able to stop secondary or tertiary admissions once a hospital admission has already occurred and the patient has been discharged, not being able to really keep an eye on their status and have them come back in again and again is a gigantic driver that potentially the Tricorder can also address through its remote capabilities.

  Then finally, the ability, and this is crucial, the early warning system, to be able to spot problems sooner and address them before they become significant and costly through surgical procedures and therapeutic procedures, is one of the most important ways to really save money for the overall health care system and only generate much better outcomes for patients.

 Nancy:                                 It’s really great you’re making consumer experience one of your key criteria for winning the competition. This may seem like a no-brainer, but it’s not the case, I would say, in the development of medical solutions. In most industries, consumer experience can make or break a new product launch. What do you think are the reasons that consumer experience has not been a bigger focus for the health care industry before? How did they get away with it for so long?

 Mark:                                    Well, first of all, they simply haven’t been making devices for consumers all that long. It’s only a couple of decades ago that we started to see ordinary consumer glucometers really enter the market in volume. You’ve got to remember that Type 2 diabetics and Type 1 diabetics were confronted with the challenge of going into their doctor’s office on a regular basis not so many years ago, to get a full A1C workup, A1C blood test. They could only do that periodically, and it was only reimbursed so many times.

The reality is that it causes probably far more fear, concern and a sense of loss of control over one’s personal health than what has emerged. What has emerged is from that very awkward model managing a life-threatening disease. We’ve seen companies emerge with smaller and smaller glucometers, provided richer and richer information about blood sugar, sometimes doing multiple blood tests or multiple cycle tests to verify accuracy, and even be able to transmit that data directly to a server or electronic medical record.

There’s a whole generation of wireless glucometers now, such as companies that Qualcomm has supported, that are in the market today delivering not only a rich user experience but a more accurate data experience; and, more importantly, it’s not data; it’s information. And it’s coming across to, for example, personal health portals that will actually capture that data and display it, sometimes correlated with other aspects of the patient’s life, their exercise patterns and their weight level, their BMI. Many aspects of their physiology are being displayed together.

This has the net effect of giving patients a far higher degree of confidence, in knowing what’s going on in their bodies, what they’re doing in their lifestyle in terms of diet and exercise that can improve their health, and be able to see tangible results, in terms of this information now that’s being collected.

 So, I think, one of the big transition points here is, older level paradigms of medical devices were really about data collection. You required physicians and nurses and other kinds of medical specialists to interpret that data and communicate to the patient. In this new paradigm, we’ve been able to now begin to package, collect and organize information in ways, so that it’s cogent to consumers. And that’s the major inspiration behind the Qualcomm Tricorder.

 Nancy:                                  It sounds like you’re trying to close the loop, starting from monitoring the data to diagnose a condition, and then giving consumers certain recommendations as to actions they can take, and then after that, monitor their actions? Is that correct?

 Mark:                                    That’s right. In a sense, although this competition is absolutely about diagnostics, it’s not really diagnostics at the level that any clinician would think of it, because what we do is we take that diagnostic information that the devices discern about the different health conditions that are measured and the vital signs that are measured, and we bring it through what we call an abstraction layer.

We take it to a level where it is now presentable to a consumer, in both visual and graphic ways, that can explain what’s happening to them, or what they should do in terms of care steps that they may take, whether it is immediately going to the ER because of a great urgency in terms of in terms of potential risks, or a lower level of potential risk, because, in fact, the information indicates that there is not the urgency of running to an acute care setting, but to, in fact, take other innovations, which may be contact their doctor or be able to even take care of some of the problems themselves. So there is a scaling of response that’s possible in the user experience and user interface, that’s a major concept within the Tricorder Prize.

 Nancy:                                  One of your requirements that the device can diagnose up to 15 diseases.  How did you decidewhich disease to focus on?

 Mark:                                    It’s a very interesting process, Nancy. First we went to the public health data on prevalent disease conditions and looked at the wide range of diseases and sort of the priorities that exist in North America, particularly; because although eventually we believe this device will have wide-spread implications for global health around the world, we are looking just at the North American space at the moment.

We took a sampling of those that are not only were prevalent and important in the American health picture, but also were divergent enough and spread across a wide range of different sensing technologies, that we could really exercise the teams and have them show, in sort of a virtualistic way what they could do with all these conditions, given they would require very different kinds of sensor technologies, different kinds of input technologies. In fact, very different kinds of algorithms that would interpret that data and come up with results. So one part of it was prevalent health conditions. Another part of it was what’s the spread of things that would really show what the potential new device is.

 Nancy:                                  I suppose there are already a lot of technologies out   there that participants can tap into. What are some of the applications of technologies that you perceive them leveraging?

 Mark:                                    Well, one thing that’s pretty exciting about this is that there is a remarkable convergence going on between clinical research, new scientific evidence about how we detect disease, and there’s hardly a week that goes by when you don’t see in the press and the media these new kinds of solutions or methods for detecting the presence of a condition, along with incredible materials technologies, that can actually address the sensing or monitoring aspects of this.

Then finally, the computing horsepower and the wireless network that supports all this, we understand quite well today, but is continuing to expand in power. So all these three things are coming together to solve some remarkable problems.

Let me give you an example of a few. One thing that in the last year, evidence has shown as quite accurate and consistent is the ability to spot a stroke before it occurs, by looking into the inner eye. We’ve known for some time that eyes are an incredible expression of personal health, but now we’re getting down to the details of, for example, how to spot the likelihood of a stroke days before it occurs, utilizing retinopathy analysis, which is really looking into the inner eye.

Now in the past, clinicians have used scopes and were well trained to look into the eye, but now we can utilize a device like a mobile phone with a scope that’s designed to look into the eye, I actually had this test done personally at Future Med, just a few weeks ago, and get very accurate images of the inner eye, but more importantly, spot, for example, in this case for stroke, small emboli, small embolisms in the veins of the inner eye that have been shown, through clinical evidence and study, to be precursors of stroke.

I don’t need to tell you how important this is. Being able to spot the likelihood of a stroke days before it occurs is a life-changing and life-saving opportunity, to get people to do acute care before the event occurs and stabilize their conditions, even possibly avoid the stroke. So that’s one example.

Another one that is quite exciting and is sort of the holy grail of sensing in many ways, is the bloodless glucometer. We talked about glucometers again. There are now a variety of companies working on methods to now read blood sugar without the blood drop necessary, by being able to use advanced photonics, different kinds of laser light that can actually look into the subcutaneous skin layer and be able to see, for example, a count, and be able to reflect a count of glucose molecules in the skin and in the bloodstream.

That’s one of several methods that are being currently investigated, not only just for reading blood sugar from a diabetics standpoint, but looking at many different kinds of disease states by looking at the molecular structure of what’s going on in the blood stream and in the cellular structure of the blood.

 Nancy:                                  it sounds like there are already a lot of technologies out there that can address some of your goals, so how challenging is this competition? Is the biggest hurdle for them to integrate all these different technologies that already exist? What do you think are the main hurdles that they have to overcome in order to come up with a device that meets your goals?

 Mark:                                    That’s exactly right. Heretofore, as I said earlier, we’ve seen in the mobile health industry that’s emerging and growing very rapidly, a lot of selective specialized solutions that do one thing, either very well or sometimes very not well enough. But the bottom line is that they are not integrated solutions that allow a personal look at the entire integrity of their health picture; instead, they provide selective slices.

 And when people ask me, “What’s the importance of a multi-function personal health device,” one way to respond to that is to ask the question, “How many consumers would buy four, five, or eight different kinds of devices, all with different interfaces, and they probably don’t inter-operate or communicate, and be able to somehow pull all together to understand what their health status is?” That is just not a likely scenario.

 So a unified picture of one’s health, taking a look at many different aspects of both disease conditions and also attributes of things like vital signs, blood pressure, and blood oxygenation, and so forth, are all critical to understanding ourselves in a more comprehensive way. And that is really the goal of the Tricorder.

 Nancy:                                  So how big do you expect the mobile health device market to be, and who do you think will be, the main decision maker for the purchase? Would that be the hospitals or the consumers themselves?

 Mark:                                    I think that one of the goals of our competition is also to create a very balanced, well rounded eco-system of interest in this initiative. That includes everything from government regulators, the Food and Drug Administration, and insurers, and also large health care systems, right down through to doctors and nurses and other care providers, and, of course, the consumers themselves.

 We fully expect that this device will probably, and its various sensors, will be things that you can order online, along with apps that are in specific sensors on your platform, the kind of thing that you may be going to Best Buy or some other major retailer for some point in the future; but that by itself is not enough. It has to have the full support of the entire chain of health care services, going all the way up to the regulatory arm of the Food and Drug Administration.

 We have been blessed with their interest and support in this program and we’ve also found that there are very many important forces within the health care delivery side that see the opportunity and want to embrace it. So we’re really trying to develop all of those interests. At the end of the day, this is really about an exchange between a doctor and their patient, and it’s crucial that both parties really support the use of this technology, and we believe that we’re really at an era at a point in time when that’s going to be possible.

 Nancy:                                  You talked about the ecosystem and the partners that you need for the success of this particular device but the public perception is that there’s often very strong resistance to change within the health care industry, which is probably one of the most conservative sectors in the U.S, I would say.

 Some physicians have already expressed displeasure of consumers educating themselves with information from the internet, because they fear that kind of gives consumers the idea that they are capable of making self care decisions. I’ve actually heard doctors complain about this myself, so what are you proposing would actually take it even further? Do doctors see this as a threat? I know you mentioned earlier that some of the people in the health care industry are really interested in this initiative, but I’m curious, from the physician’s perspective, how do they see this?

 Mark:                                    Well, I can answer that in a couple of ways. First of all, I know myself, because I have many, many friends who are health care providers and who are doctors who have been frustrated, because many times a patient who with the best of intentions wants to understand more about their health condition, about their particular disease state, goes out on the internet and researches it and brings back reams of paper for a doctor to look at, who probably has no time to look at it.

 Oftentimes, what you find that is out on the web today is a very both divergent and inconsistent set of information, often times contradictory, that frustrate the process of a real dialogue between doctor and patient and cause, in some cases, distrust by the patient, because the doctor, frankly, has seen those inconsistencies and has problems with them.

And sometimes you’ll find patients that really latch onto a particular therapy or direction that may not be well suited for that patient, may not be personalized adequately, may not be evidence based, and the physician has to say, “Maybe we should think about this differently.”

I think that what makes the Tricorder a very different kind of solution, the Qualcomm Tricorder X Prize is intent on helping to build a stronger relationship between physician and patient and provide information to the physician that actually can help that physician practice more effectively and support that patient more effectively and maybe, most important, communicate more effectively and consistently.

 One of the common complaints that many patients have is, “I never get a chance to see my doctor.” That problem is not easy to solve, in that the ratio of doctors to patients is getting worse and worse. Many physicians carrying patient loads of 1200, 1500 to one is very challenging.

 But with these new communication tools and the ability to monitor the status of patients remotely and be able to communicate when there is an adverse event or a significant issue, I think that physicians will be able to triage their time more successfully and focus on the patients in a timely way that need immediate focus and those that have, perhaps, less of a need, because their health condition is better.

 So that’s a very different model than of a patient simply going out and collecting a lot of information off the web and dragging it in for an office visit. Given that doctors have limited amounts of time, in those office visits, the last thing you want to do is to be wading through piles of paper. The Tricorder turns that on its head. It provides tangible evidence, actually real time, during the ongoing course of a relationship between the physician, and it doesn’t mean that it all has to be squeezed into a patient visit.

 Nancy:                                  We have talked about the potential of this device, to help reduce costs and also help both doctors and consumers to track their wellness level. But what about for institutions or government agencies to try to track wellness level to be compliant with the Affordable Health Care Act?

Mark:                                    Well, it is. Interestingly enough, we have been approached and have had some discussions with some agencies in the federal government regarding bio-terrorism monitoring and also epidemic monitoring.

 You could imagine that if a large number of people in the US population– let’s say, in a few years from now, five years from now, are carrying these devices, and they can detect emerging health conditions, for example, that might indicate a bio-terrorism attack, a chemical warfare attack or potentially indications of a forthcoming or emerging epidemic– like some of the bird flus– that they could rapidly get a geo-position on where the outbreaks are occurring, what their relative severity is.

Even details about which patients by age range or demographic are acquiring the disease that can be tremendously helpful to the CDC and other agencies in containing the disease and closing it down. Research has shown time and time again that the faster you can actually get a foot print around an epidemic outbreak and understand it demographically and by location, the quicker that it can be curtailed. So I think that this type of technology has a tremendous importance for national health, especially in the security areas.

Nancy:                                  We also talked about the Affordable Health Care Act, and one of the key things is that they want to try to track the ability of the each hospital to keep their patients healthy and well most of the time. So how are they going to do that? Does this device help them do that?

 Mark:                                    Most definitely. Without a doubt, one of the most unique features is the big paradigm shift from sickness to wellness. It’s an unfortunate fact that the way we historically have compensated providers for services is by paying every time there is a sickness and we remediate it in some way or we intervene with it in some way. The goal of the Affordable Care Act is to shift gears and start to look at relative wellness of patients and how these systems provide preventative care services to keep people well and to compensate them accordingly.

 One interesting aspect of the act, though, is it does not prescribe how this could be done. It doesn’t explain what methodology would be used, so that health care systems could track the relative wellness of populations under their care. The Tricorder actually answers that question, by providing a technology that provides remote monitoring of key vitals and other kinds of disease conditions that a user may have and provide hard, statistical data on their relative improvement or weakening in the face of different therapies and services provided by that care provider. So it is an extraordinary opportunity to fulfill the promise of the Affordable Care Act.

 Nancy:                                  Very exciting. Of course, it’s all great that you can track so many data points, but inevitably you’re going to have the question of patient privacy. Is this something that the participants of the competition would have to address?

 Mark:                                    Absolutely. The HIPPA act, the Health Care Information Patient and Privacy Act, is a critical feature and is written into the guidelines and rules of the competition. The data that is transported from the hand-held, and there is a requirement the data collected from the hand held is transported to an electronic health record system. Likewise, data is transmitted back to the device. That exchange of information has to be HIPPA compliant and will be tested for HIPPA compliance.

 Furthermore, we are also looking at implementing or requiring that the low power data stream from the sensors that may be utilized from the individual, also have data security and may be testing that as well. So the entire focus of this competition is to assure that the competitors are dealing with HIPPA, which is, of course, a federal law.

 But most importantly, we want to make sure that they’ll be ready for commercial success post-competition, and it will be a requirement for this class of device, to support HIPPA. So it makes every bit of sense in the world to make sure that there is HIPPA compliance. Under the competition rules and the testing protocols we defined, we need ourselves to make sure that they are compliant.

  Nancy:                                  Well, all the new challenges are very audacious, including this one. So when it comes to innovation, there’s always this question of how to be early but not wait too early. So at X Prize Foundation, I’m curious, how do you go about assessing which goal is the right one to focus on at the moment, when there are so many ideas to tackle?

 Mark:                                    Well, we just had an amazing event called “Visioneering,” which actually attempts to do exactly that. It brings together extraordinary people, leaders in business, science, and industry, together to think about what the grand challenges should be, to actually get involved in the prize design and thinking about, with their vast experience and knowledge of the world, what are the world’s great challenges? And the Foundation certainly sets those down. I think you can go to Visioneering.org and actually learn more about that event. It’s an extraordinary experience for the participants and brings tremendous ideas out.

 We have internally an extraordinary team of people, prize designers, who have expertise in not only researching grand challenges, but also evaluating the opportunity to make quantum leaps forward that would have a gigantic humanistic benefit for people, and also can stimulate whole marketplaces to emerge, where the commercial market itself for whatever reason isn’t moving yet.

 That’s oftentimes one of the key criteria for a prize, is if for whatever reason, either investment or market opportunity, has not actually opened an opportunity to create a great advancement, even though the technology, the resources, the talent is there.

 That’s what the X Prize Foundation is really about, is facilitating that and making these great leaps forward. So we have an internal process for vetting these ideas and looking at them from those criteria, from that standpoint, what can make a great change occur, and that is not being motivated currently today or move today by the commercial or investment marketplace.

                                   What are other implications for the pharmaceutical industry, for the consumers and doctors? Listen to the rest of the interview now.