The Time is Ripe for Healthcare IT Start Ups (Part 1)

By Jennifer Dennard
01:43 PM

With daily news of healthcare mergers and acquisitions coming left and right, it’s no surprise that start-ups are also finding firm footing in the industry right now. With much-publicized incubation programs like Rock Health and Health Box giving a media savvy face to formerly unknown names, new, smaller healthcare companies – particularly those in the IT space – are finding conditions ripe to enter the market. ( featured a great overview of recent, booming HIT start-up activity that you can read here.)

Omada Health, a start-up out of San Francisco focused on pre-diabetes prevention via online tools, is part of Rock Health’s first graduating class, having just ended formal arrangements with the program last month. It’s conducted two prototypes already, and plans to officially launch its official 16-week program in 2012.

I recently sat down with Sean Duffy, co-founder and CEO of Omada, as he and his team readied to move into new office space in downtown San Francisco, to learn about the process of taking an innovative idea from drawing board to incubator to market. This first part will highlight Omada’s journey from concept to business model. Next week’s blog will focus on how the company plans to effect clinical change in patients lives and drum up some revenue along the way.

Why was chronic disease prevention that idea that you and your founding partners decided to run with?
We were at Ideo [a design and innovation consulting firm], and one of the partners wanted to explore this idea a little bit. I was tasked with looking at business opportunity in disease prevention, given some of the changes in the healthcare landscape including healthcare reform. There’s an increasing recognition that there’s a huge crisis and recognition of obesity and the chronic disease that comes from that in the US, and something needs to be done. So we started down that road, and we looked at what you might need to essentially form a business that could be scaleable in disease prevention versus disease treatment. We really quickly settled on diabetes for a number of reasons.

We came up with a framework of what you’d need to have in place from a business model standpoint to make it work. The first is you have to have a medical condition that [is] a relatively expensive condition at the point of diagnosis. You have to find people that are likely to progress to that condition, so you need to identify some sort of precondition, and know that people with that precondition will progress to the condition if you don’t help them. There needs to be medical literature that shows that helping people at the point of precondition reduces the chance of them getting the condition, essentially.

A large number of people with prediabetes are likely to get diabetes in 10 years if you don’t help them. And it’s clear through medical literature that helping them reduces that risk. So it seemed like an actionable place to put some time into. Just from a business standpoint, it seemed like a great opportunity – you can show ROI. Equally important is that when we went out to talk to people with prediabetes, the diagnosis was very meaningful to them.

So there was really interesting psychology there, because if you’re diagnosed with diabetes, the general sentiment you’re likely to get from your doctor is that this is a condition that you’ll have for the rest of your life. Being told you have prediabetes, on the other hand, leaves people with the feeling that they have an opportunity to make some changes in their lives – change their diet and lose some weight because they didn’t want to walk toward that cliff of diabetes.

Why did you decide to take your idea to Rock Health?
When we were at Ideo, things started to feel more and more real, and talking to patients really motivated us. It just felt like a need that we really wanted to try to fill. So [my partners] and I left Ideo to pursue it, and that was actually right when Rock Health launched, which was perfect timing. We met with Halle [Tecco], the founder of Rock Health, and liked her and the mission behind the organization - it’s a nonprofit. They’ve got great office space, great resources and partners, and it made a ton of sense for us. We really liked the team behind it, so we decided to give it a shot and apply. And at that time, there weren’t any other health-related incubator programs out there. Now a couple more have popped up in different locations.

Were the two prototypes you’ve already conducted done through Rock Health?
We ran the first prototype while we were inside of Ideo. We had this idea of curating and building very small groups of people with prediabetes, and bringing them through an online curriculum. We wanted to see what it would feel like to be matched up into a small group online and have a virtual facilitator. We wanted to see if people would interact, if they’d be comfortable with that model, and how it would resonate in people’s lives. We found that people really liked it, so that gave us the confidence to build our own piece of software.

We just finished up the second prototype with eight people with prediabetes in the Chicago area. We took them through an eight-week online program based on curriculum from the Diabetes Prevention Program. In that prototype, we had connected scales in people’s lives. We took them through the curriculum, and we set weight loss goals. We had conference calls along the way. … and we were really thrilled with the results.

The premise of what we’re doing is that you really need to have people heavily involved in any sort of behavior-change intervention. We’re building technology to enable that as well as we can for participants that are in these groups.

Stay tuned next week for the second part of my interview with Sean Duffy.


Jennifer Dennard is Social Marketing Director for Atlanta-based Billian's HealthDATA, Porter Research and Connect with her on Twitter @SmyrnaGirl.