Xealth Puts the X Factor Into Health

By Bill Bryant, DFJ Partner

Over the past decade, healthcare has seen a Cambrian explosion of digital healthcare offerings: apps that manage various conditions, curated expert content, digital in home devices and sensors, educational videos, connected wearables, tele-health and other physican-to-consumer engagement tools, preventative programs aimed at chronic conditions, online health communities and destination sites, and much more. Two factors are driving the rapid emergence of digital health. First and foremost is the collective, ongoing evolution in patient expectations and behavior.

As consumers, we have taken a keen interest in understanding, monitoring and managing our personal health and wellness. We want to be healthy and eat right. We know we need to manage our weight. We have an interest in our daily patterns, from first awakening to how we sleep. At the first signs of an ailment or condition, we turn to “Dr. Google.” We’re gathering saliva and blood samples for DNA, blood sugar, and biome analysis. All of this health-related activity is happening outside of the clinical or hospital setting. But, when we meet with our physician, we now carry an expectation that the clinician should also know the data that we’re collecting about ourselves.

Equally important is a broad shift in healthcare mentality from “treating the sick” to “promoting the healthy.” Healthcare professionals acutely understand that their ability to affect a patient’s health is limited when they only see someone for 20 minutes every third or fourth month. They realize they have to intervene in the patient’s daily life if they are to avoid a visit to the emergency room.

In order to deliver the highest quality healthcare, clinicians know they must be an active participant in driving healthy behavior during the 99.9% of the time a patient is not in front of their physician.

What the physician knows about a patient is stored in what is called an Electronic Health Record or Electronic Medical Record (EHR/EMR). This is the software that the clinician pulls up during an office visit. If you’ve been going to the same providers within the same health network, they will have an extensive and mostly up-to-date record of your interactions and visits, including notes, instructions, lab test results, radiography images, and prescribed pharmaceuticals. EHRs were designed in the early 1980s, well before any notion of “digital health” had entered the vernacular. They are well-suited for doctors making a referral, ordering a lab test, or prescribing a drug.

What EHRs don’t allow the doctor to do is prescribe a home CPAP machine for sleep apnea, a Weight Watchers diet program, Livongo’s diabetes management program, or Omada’s digital therapeutics for chronic conditions. Your doctor can’t easily send you home with instructions to view a post-surgery recovery video as well as a physical therapy website, nor can they know whether or not you’ve complied. They don’t have access to your Fitbit data, the sleep tracking data from your Apple Watch, or the coaching, exercise, and mental health data, if you’re a Lantern user.

Enter Xealth — pronounced “zealth.” Xealth is a spin off from Providence Health, one of the five largest healthcare systems in the country. Providence recruited a talented entrpreneur-in-residence (EIR) team (more on the team in a moment) to help with its innovation initiative and granted the EIR team free access to clinicians and medical experts.

The team asked, “what is the highest impact idea that would help you in your day-to-day work, while leading to improved patient outcomes?” Integrating digital health into the clinical workflow was the universal answer.

I won’t go into the technical intricacies of Xealth’s solution, but suffice it to say that Xealth is building a platform that allows a health delivery system to easily integrate whatever digital health proposition they’d like to offer to their patients (while factoring in what the payer or employer is willing to reimburse). Both payer and employer parties are aggressively pushing digital health to manage down costs over time. They know that signup and compliance are greatly improved when a physician prescribes say a smoking cessation program, versus the employer or insurance provider sending out this same message.

From the standpoint of the digital health companies, Xealth offers a one-stop, seamless to existing workflow, integration layer to the provider. The integration of the digital health proposition is within the clinician’s familiar workflow — they don’t need to learn a new interface, or go outside of the EHR environment to establish an account and then upload or import patient data.

On a personal level, what is particularly exciting about Xealth is that it reunites me with the founders of Swype. Swype revolutionized predictive text entry on mobile devices. A decade ago, as a then angel investor, I helped organize Swype. I was a small investor and remained a close advisor to the leadership team throughout its history. I’m thrilled to be working once again with Mike McSherry, Aaron Sheedy, Sundar Balasubramanian, Eric Fu, and several other Swype alumni who have come back together at Xealth.

At DFJ, we have a long history of investing in healthcare innovation, starting with our investments in athenahealth and Epocrates over 20 years ago. Our current healthcare portfolio includes Livongo, Elation, Wellframe, and Doximity. With $3.4 trillion being spent nationally on healthcare, there is much work to be done to dramatically reduce the overall cost of delivery, while improving patient outcomes. If Xealth is successful in its mission (the company has announced the first of four hospital system partners including two top ten systems, with another dozen major players in advanced discussions), both of these objectives will be accomplished.

With this as context, I’d like to welcome the Xealth team, as well as our co-investors, Providence Health, UPMC, Froedtert, Stanford, and Hennepin County Medical to the DFJ family. As Gandhi once said, “it is health that is real wealth, not pieces of silver and gold.” To our health!

Bill Bryant is a partner at DFJ.

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