V Bento, SWORD Health, on precision musculoskeletal (MSK) care through AI

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In this episode, we sat down with Virgílio “V” Bento, Founder & CEO of SWORD Health. V has a PhD in Electrical Engineering from Universidade de Aveiro. V holds 16 patents and has authored more than 40 research papers in fields as diverse as sensor fusion algorithms, motion tracking systems or neuroplasticity. His work has been featured in the world’s most distinguished scientific publications and at important MedTech conferences.

SWORD Health aims to bring world-class musculoskeletal (MSK) care to patients around the world by connecting members with physical therapists and digital therapists through a member app that combines sensor technology with telemedicine to prevent, relieve, and accelerate the healing of acute conditions, chronic pain, and post-surgical recovery. Since its founding in 2015, SWORD Health has provided over 4.6 million minutes of care to help members recover from surgery, prevent unnecessary surgery, and manage chronic pain from home. SWORD’s digital therapist is proven to outperform traditional physical therapy and has operations in Europe, Canada, the United States and Australia.

SWORD Health raised $163M in their latest Series D round led by Sapphire Ventures. This latest fundraising round brings SWORD’s valuation at $2B. Several major investors participated in this funding round, including General Catalyst, Khosla Ventures, Founders Fund, BOND, Transformation Capital, and Green Innovations as well as Sozo Ventures, Willoughby Capital, ADQ and Localglobe.

We discussed

• Drawing inspiration for the genesis of SWORD Health after V’s brother got into a car accident and could not access the high quality physical therapy he needed for a speedy recovery.
• Delivering precision care through AI that generates personalized care plans for each patient with the guidance of physical therapists.
• How SWORD Health’s proven clinical model, created to address MSK-related issues, could target other conditions in the future.

Start to 9:50: A personal motivation for improving MSK care

• A personal motivation for MSK: V experienced the limitations of MSK solutions firsthand when his family sought care for his brother after a car accident. The impact of the car accident sent his brother into a 12-month coma. Accessing consistent, high quality physical therapy critical for his brother’s recovery was challenging and created a lot of despair for V and his family.
• Leveraging engineering to improve MSK solutions: V founded SWORD while pursuing his PhD in Electrical Engineering. V decided to attain his PhD while developing the business plan for SWORD. The PhD enabled V to refine the hardware technology to support adherence to recommended physical therapy exercises while building the financial resources to construct the initial viable product.
• The MSK market prior to SWORD: The gold standard of care in MSK treatment is high quality, high intensity physical therapy. However, this treatment is labor intensive and there is a shortage of physical therapists. Receiving traditional physical therapy may also create challenges for patient adherence. Given the transportation and scheduling requirements required for in-person physical therapy visits, studies show that an estimated 50% of patients drop off after four in-person visits. In addition, the growing aging population continues to exacerbate the demand for physical therapists. Without systematic access to quality physical therapy, patients may elect for invasive surgical procedures that do not meaningfully improve efficacy but may instead lead to a more painful, prolonged, and costly recovery.
• The human toll of poor pain management: 60–70% of new opioid users started using painkillers due to physical pain. In fact, many patients experience physical pain related to MSK conditions. Part of the problem is primary care physicians may be more likely to prescribe painkillers instead of physical therapy that can be difficult to schedule and perhaps even more challenging to consistently adhere to.

“Right now, we are spending more money on MSK patients than cancer and mental health combined at roughly $400 billion each year. And if you look at the bulk of that cost, you will see that it’s really about surgeries. It’s fairly well established that at least half of all back and joint surgeries that we are doing right now should be avoided and be replaced with high intensity, high quality physical therapy.”

9:50 to 33:54: Overview of SWORD Health offerings

• A digital way to receive physical therapy: SWORD is a digital app that connects patients with physical therapists on demand. The digital format enables patients to receive quality clinical expertise in a convenient way that is flexible for their schedules. SWORD also gathers real-time data from patients through the use of sensor technology and utilizes AI to analyze patient-specific data to refine their care plans. This hybrid care model combines the human touch of care delivery with the ease of digital accessibility and the precision of AI-supported analysis.

“SWORD’s mission is to free the 2 billion people worldwide suffering from MSK-related injuries from pain.”

• On SWORD Health offerings: SWORD began by targeting back and joint pain, two of the largest sources of physical pain for patients. Since then, SWORD has expanded its services to address most MSK-related injuries including neck, knee, elbow, ankle, and wrist / hand pain. Recently, SWORD launched Bloom, a service targeted at female pelvic pain. Increasing SWORD’s offerings, including specialties that are under addressed, is in line with SWORD’s mission to bring accessible, high quality care to scale even beyond traditional MSK conditions.
• On enabling precision care with AI: A key factor of success for physical therapy treatment is ensuring the patient is completing the prescribed exercises correctly and consistently at home. To mitigate this problem, SWORD Health incorporates sensors that patients use to monitor adherence to their care plan. The patient receives feedback on how accurate their movements are from the AI-enabled “digital assistant”, and their assigned physical therapist also receives the report to inform adjustments to their care plan. This configuration supports greater patient adherence to the care plan and a more adaptable care plan founded on real-time access to patient data. The aggregation of patient-specific data is also used to improve clinical protocols for future patient who share similar demographics or pain condition profiles.

“And we bet that collecting more data at the individual patient level allows us to have a much more precise type of medicine and path of recovery, and that we are able to do that for the first time in the world.”

• Emphasis on quality physical therapists: Given the importance of physical therapists to the care journey of patients with MSK-related injuries, SWORD Health guarantees patients receive access to care from these clinicians. SWORD employs their physical therapists as full-time employees.
• Optimistic about the telemedicine model: Upon starting SWORD Health, V and his team considered incorporating an in-person component if they had difficulty dispensing effective care in a fully virtual setting. However, SWORD has not encountered significant challenges in delivering quality care in its fully virtual model. V is open to shifting this model based on evolving patient needs, but the team is currently focused on improving its virtual model.
• Tracking efficacy based on pain reduction and reducing physical limitation: SWORD Health generally tracks patient-reported pain reduction and improvements in physical ability as the primary metrics of efficacy. Insurers and employers are also concerned about healthcare expenditure reduction. Specifically, SWORD Health has been shown to reduce the number of costly surgeries patients seek in lieu of the treatment they receive through SWORD.
• Putting their money where their mouth is: SWORD adopts a fee risk-sharing model, where receiving these fees is contingent on SWORD Health achieving certain clinical and cost metrics. In addition, SWORD does not fully charge clients if the member does not engage with the SWORD program. This policy underscores SWORD’s mission as providing the most engaging solution for patients.
• A company oriented on long-term growth: SWORD is anchored on continuing to prevail 100 years down the line, not simply boosting profit margins in the short term to please investors. Fundamental to this growth strategy is building strong customer relationships and a brand that espouses trust and quality for treating MSK and other pain-related conditions. In service of this, SWORD reinvests its dollars back into the business in its various value-based and risk-sharing fee schedules as well as recruits top talent to reinforce its clinical staff.

“I think digital health solutions will need to talk the talk and walk the walk. And so if we are here saying we really improve clinical outcomes and we really save money, then we should be able to put that to the test…SWORD Health is never a cost to clients because we put our fees at risk, and that’s why we’ve been going so fast. ”

33:54 to End: Industry-wide projections and forward-looking thoughts on SWORD

• Telemedicine as a sustainable shift in care delivery: V believes that while COVID accelerated the adoption of telemedicine, the systemic transition to offering more healthcare services through telemedicine was likely to occur. Telemedicine offers a cost-effective way to provide more access to patients. As practitioners get more savvy in providing virtual care, the efficacy of telemedicine also improved and is comparable or even better than in-person care in many categories.
• On whether Digital Health funding is a cause for concern: Digital health companies raised $29.1B in funding last year. According to V, this figure could be even larger given the size of the healthcare industry and the relatively limited role of digitization and software. V anticipates we will see more $50B and above digital health companies in the next 5–10 years.
• On near-term priorities: SWORD Health’s main focus is on continuing to lead the MSK space as the fastest growing company in the space. Fundamentally, SWORD aims to leverage the hardware and software solution it has created to address MSK-related issues to target other conditions that could respond well to this treatment model.

“We want for each person to not be afraid of anything, and be physically active. We really want to fulfill this vision of creating and becoming this physical health company.”

• On launching in the U.S. after kicking off in Portugal: V and his team targeted the U.S. because the U.S. has the largest incidence of MSK-related conditions than any other country. Europe made less sense given the fragmented healthcare systems across the various countries that necessitated unique go-to-market strategies. SWORD has ambitions to eventually serve the global MSK market, but is focused on the U.S. market in the near-term.
• Building traction in Silicon Valley: The Steve Martin line “Be so good that you cannot be ignored.” motivated V’s initial maneuver into Silicon Valley. V and his founding team did not have any prior contacts with investors. V sent cold emails to various investors with a description of SWORD and its proof of efficacy from testing in Portugal. Through this, V convinced Khosla Ventures to invest in their Series A funding round. Most recently, SWORD raised $163M in its latest Series D funding round, elevating the startup at a $2B valuation.

“So if you are starting now, don’t focus too much on networking, focus on really building something that’s special.”

• Patented innovation as a source of differentiating competitive advantage: SWORD Health currently has 22 patents submitted and pending confirmation, which is 3–4 times greater than other comparable companies according to SWORD estimates. This underscores SWORD Health’s constant push to develop innovative products to enhance its clinical efficacy for patients.