Kate Wolin’s Company ScaleDown Aims to Make Weight Loss a Habit

A scale and a smartphone are all it takes.

katewolin-croppedMore than 70 percent of Americans are overweight, according to the CDC, and almost everyone who is overweight expresses a desire to lose weight. Yet few achieve their goals, and even fewer maintain their ideal weight. This problem has been a focus of Dr. Kate Wolin’s – a Harvard-trained scientist with deep expertise in behavior change – for more than 15 years. Her company, ScaleDown, uses a sophisticated behavioral phenotyping engine to get people to do just one thing: weigh themselves every single day, because research shows the more frequently a person weighs, the more likely he or she is to lose weight.

ScaleDown provides, cost-effectively and at scale, what personal weight loss coaches do for those who can both afford them and manage the time commitment. Every day, ScaleDown users get text messages in response to their daily weight, based on a sophisticated algorithm that generates individualized feedback.

“The behavioral phenotyping engine is our way of personalizing that feedback without the expense and the reach challenges that coaches can raise,” Wolin said. “I will have the best intentions to show up every Tuesday for that coaching session, but then, you know, I have this work event, or my kid has a thing at school, and I miss it.”

The key to real, sustained weight loss, Wolin said, is consistency.

“Weight, like many other chronic-disease related behaviors, is something you have to be attentive to every day,” she said. “We’re not about quick weight loss. We’re about helping you lose that weight and keep it off. It’s a lifestyle change.”

“We’re not about quick weight loss. We’re about helping you lose that weight and keep it off. It’s a lifestyle change.”

And that lifestyle change has implications beyond looking and feeling better. Much of Wolin’s own research surrounds the relationship between obesity and disease, including cancer.

“A lot of people know that heart disease and cancer are the leading causes of both morbidity and mortality in the US,” she said. “But many people are unaware that obesity is a risk factor for thirteen different cancers… While we don’t collect information on people’s chronic disease profiles at ScaleDown, I hope we are shifting that risk curve for folks who haven’t been diagnosed.”

Wolin met her two co-founders Gary Bennett and Dori Steinberg when they were students at Harvard. Their impetus for building ScaleDown came from their shared interest in serving people who couldn’t easily engage with the medical system.

Today, ScaleDown serves more than 20,000 active users, and they have had more than 110,000 users since they began selling their product. Their research shows that 93 percent of ScaleDown users have experienced clinically meaningful results, which compares to 40 percent in other weight-loss programs.

“We’ve gotten great traction and had enough users come through that we’ve really been able to build a robust product,” she said. “And now it’s about finding the right partners and channels for growing the business.”
For more on Kate Wolin, see her LinkedIn and Twitter.

Senator Kirk and Governor Romney Visit MATTER, Support Innovation in Healthcare

CHICAGO, Oct. 19, 2016 – U.S. Senator Mark Kirk and former governor and presidential candidate Mitt Romney today toured healthcare technology incubator MATTER to discuss the future of healthcare with entrepreneurs and innovators.

Located in Chicago’s Merchandise Mart, MATTER is a community of healthcare startups and industry leaders working together to fuel innovation in health IT, medical devices, diagnostics, and biopharmaceuticals.

Senator Kirk and Governor Romney met with several of the entrepreneurs working at MATTER to develop innovative healthcare solutions, including the founders of SurvivorPlan, an integrated care planning, care coordination, and patient engagement platform; HabitNu, a diabetes prevention and management tool; 300 Medical, a technology company that improves how patients receive care; and Resonance Medical, a software company that aims to upgrade existing cochlear implant processors.

“It was a pleasure to be back at MATTER,” said Senator Kirk, who visited the incubator for the first time in August of 2015. “The technology, devices, and products being developed by the entrepreneurs at MATTER will improve patients’ lives and positively impact the region’s economy,” Kirk continued.

“Today I had the opportunity to tour MATTER with U.S. Senator Mark Kirk,” added Governor Romney. “I enjoyed hearing from entrepreneurs and innovators on the cutting edge of healthcare technology who are working together to improve the healthcare industry, create jobs, and bolster the local economy,” Romney said.

“MATTER is honored to host Senator Kirk and Governor Romney for a discussion about how technology innovation is improving healthcare and changing lives,” said Steven Collens, MATTER CEO.

MATTER is a community of entrepreneurs, innovators, and industry leaders working together to harness technology to improve health and healthcare. MATTER connects and promotes collaboration between entrepreneurs, scientists, physicians, investors, and industry partners in order to bring next-generation products and services to market that improve quality of care and save lives. For more information, visit www.matterchicago.com and follow @matterchicago.

Fresenius Kabi Joins Chicago Health Innovation Incubator MATTER as Newest Strategic Partner


(LAKE ZURICH & CHICAGO) – October 11, 2016 – Fresenius Kabi has joined Chicago’s healthcare innovation incubator, MATTER, as a new strategic “gold” partner, both organizations announced today.

MATTER is a community of healthcare innovators based in Chicago.  Fresenius Kabi is a global healthcare company that specializes in medicines and technologies for infusion, transfusion and clinical nutrition.  The company is based in Germany with its U.S. headquarters in Lake Zurich, Illinois and advanced manufacturing, R&D and logistics operations throughout the Chicagoland area.

MATTER and Fresenius Kabi will work together to accelerate the development of technologies that improve health and patient care, with a focus on products used in the treatment of people with critical and chronic conditions, which is where Fresenius Kabi has special expertise.

In the U.S. Fresenius Kabi products include specialty and generic injectable medicines, infusion pumps, clinical nutrition products and transfusion and cell-processing technologies used to collect, store, process and transfuse blood, blood components and specific therapeutic cell types and lines.

“This partnership is about physical and digital innovation, which as we know is transforming patient care, making high-quality care more effective, more affordable and more in reach for more people worldwide,” said Dean Gregory, president, medical devices, Fresenius Kabi USA.  “We look forward to engaging with the MATTER community and collaborating with its innovators, entrepreneurs and other partners as a means to fulfill our purpose, which is to put lifesaving medicines and technologies in the hands of people who care for patients.”

Through MATTER, innovators from across the healthcare industry connect and collaborate to accelerate the development and growth of solutions that address industry challenges and improve care.

“Fresenius Kabi is a leader in healthcare with a focus on therapeutics and devices, and we are thrilled to welcome their innovators and experts into the MATTER community as we collaborate to improve care,” said Steven Collens, chief executive officer, MATTER.

About Fresenius Kabi

Fresenius Kabi (www.fresenius-kabi.us) is a global healthcare company that specializes in medicines and technologies for infusion, transfusion, and clinical nutrition. The company’s products and services are used to help care for critically and chronically ill patients. The company’s U.S. headquarters is in Lake Zurich, IL. The company’s global headquarters is in Bad Homburg, Germany. For more information about Fresenius Kabi worldwide, please visit www.fresenius-kabi.com.


MATTER is a community of entrepreneurs, innovators and industry leaders working together to harness technology to improve health and healthcare. MATTER connects and promotes collaboration between entrepreneurs, scientists, physicians, investors and industry partners in order to bring next-generation products and services to market that improve quality of care and save lives. For more information, visit www.matterchicago.com and follow @matterchicago.

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Fresenius Kabi Media Contact
Matt Kuhn
Fresenius Kabi
(847) 550-5751

MATTER Media Contact
Melissa Lederer
(312) 543-9537

Predictive Poop: Microbiomes and Gut Health

Posted September 29
By Clayton Gentry
MATTER Journalism Fellow

On Wednesday, September 21, Professor Jack Gilbert and Dr. Eugene Yen discussed their research on the human microbiome and fecal microbiota transplants (FMT). The event kicked off the “What’s Next for Healthcare” lecture series, produced by MATTER in partnership with NorthShore University HealthSystem.

Predictive Poop Panel

Gilbert, who has a background in marine ecology, opened his talk by equating ecosystems in nature with the human body.

“Transitioning from understanding the rainforest to understanding the human gut is very easy,” he said. “Your body is an ecosystem.” As in nature, Gilbert said, the agents that make up the rainforest — which outnumber the amount of cells in a body — have a direct impact on the health of the host.

“Your body is an ecosystem.”

Gilbert’s fascination with the subject stemmed from his interest in learning more about his own susceptibility to Alzheimer’s: he has a genetic mutation that makes him 30 times more likely to acquire the disease. He said about ten years ago he began to study why some adults with the mutation do not get Alzheimer’s, while some do. Gilbert believes the answer may lie partially in his own microbiome.

While the adult microbiome is relatively stable, Gilbert and Yen agreed that the kinds of human and environmental exposure infants experience can have a long-term effect on their physical health. Gilbert discussed the idea of the human microbiome in the context of childbirth, focusing on the differences between children born via vaginal delivery and children born via cesarian section.

“You get your microbiome from your mother,” Gilbert said. “The children who are born via vaginal delivery, who pass through the birth canal, acquire a microbiome from that transit – a microbiome that is very, very similar to the mother’s vagina.” Babies born via C-section, Gilbert said, “acquire their microbiome from the skin of the first person they come into contact with.” He said these babies have a higher probability of having neurological disorders, obesity, and other developmental issues.

Professor Gilbert Predictive Poop

He also described the impact of the body’s microbiome on one’s physical health by comparing Amish children, who undergo heavy exposure to animals as small children, and Hutterite children, who grow up on industrial farms without animal exposure. Whereas the U.S. average for asthma occurrence hovers around 8 percent, asthma occurrence in the Amish stays around 3 to 5 percent, and is around 35 percent in the Hutterites. Gilbert attributes this contrast to differences in the microbiomes of Amish and Hutterite bodies: early exposure to animals diversifies the Amish microbiome.

In 2015, Gilbert co-founded The BioCollective, and is currently the chief scientific advisor, helping to develop the patient recruitment and product lines.

Yen, a clinician at NorthShore University HealthSystem who specializes in colon cancer prevention and the treatment of irritable bowel syndrome, also discussed the microbiome, but in the context of his own work in fecal microbiota transplants (FMT).

Yen believes his work on FMT can play a role in altering adult microbiomes for the better. FMT, which dates back to 4th century China, Yen said, is the infusion of a healthy donor’s liquid stool preparation (informally referred to as a “crappuccino”) into the GI tract to restore normal flora.

One positive implication of the procedure is that it can potentially resolve some health problems that would otherwise require antibiotics or other pharmaceuticals, particularly clostridium difficile colitis, or C. diff. These bacteria attack the lining of the intestines, causing frequent diarrhea, abdominal pain, loss of appetite, and fever. The disease represents a common cause of hospital-acquired diarrhea, and Yen described it as a “disease caused by antibiotics treated with antibiotics.”

“It’s a disease caused by antibiotics treated with antibiotics.”

Indeed, current mainstream treatments for C. diff revolve around antibiotics, but Yen’s work has shown that FMT should be seriously considered as a non-pharmaceutical approach to curing the disease. Since his first FMT patient in May 2010, Yen has conducted the procedure 167 times with a cure rate of 96 percent.

Dr. Yen Predictive Poop

Yen said future directions for research on FMT involve crafting alternative modes of transplantation like frozen stool, stool substitutes and pill-based formulations. Moreover, Yen said FMT could have clinical applications outside of C. diff including irritable bowel syndrome, obesity, inflammatory bowel disease, diabetes, chronic fatigue syndrome, depression, multiple sclerosis, and Parkinson’s disease.

Intensive study of the human microbiome is relatively new. Ninety percent of the approximately 4,000 articles on the subject have been published in the past five years. The research is young, but according to Gilbert and Yen, altering the human microbiome may yield tremendous health improvements for certain patients, and the secret is in the poop.

MATTER Launches The OSF Simulation Stage in Partnership with OSF HealthCare

Screen Shot 2016-09-06 at 11.37.06 AM                  MATTER-Logo-POS[1]

New specialty environment at MATTER lets healthcare innovators develop ideas and test products in real-world clinical scenarios; first project will focus on hospital observation units

(CHICAGO, IL) – September 6, 2016 – MATTER, in partnership OSF HealthCare, today announced the launch of The OSF Simulation Stage at MATTER, a flexible simulation environment designed to allow early-stage healthcare technology innovators to test their products in real-world clinical environments and gain valuable feedback – knowledge they traditionally would not have the opportunity to receive until much later in the development process. The Stage, which is configurable to model a number of hospital clinical settings such as an ICU, cath lab, or procedure room, is outfitted with medical equipment from Hill-Rom and electronic health record software from Allscripts.

The OSF Simulation Stage’s first configuration will model a hospital observation room and will be the focal point of a six-month-long challenge sponsored by Hill-Rom to develop technologies to improve the efficiency, quality, and financial stability of hospital observation units. The challenge is an opportunity for innovators to develop solutions to a timely problem and gain feedback from clinicians on the front lines of delivering care. Applications from teams interested in participating must be submitted by October 15. The winning team will be presented with a cash prize. For more information, visit http://matterchicago.com/about/thestage/

“Simulation provides an invaluable opportunity for testing, training, and iteration in a safe and controlled environment,” said Dr. John Vozenilek, vice president and chief medical officer for Jump Trading Simulation & Education Center, a partnership between OSF HealthCare and University of Illinois College of Medicine at Peoria. “The friction involved in bringing new healthcare technologies to market is immense, and it’s often doubly hard for early-stage innovators to navigate the healthcare system to secure crucial pilots and gain direct feedback. The OSF Simulation Stage at MATTER eliminates this friction by accelerating the testing process and paving the way for outside evaluation to shape new ideas and iterative decisions that might otherwise not be uncovered until much later in the process – or missed entirely. We’re thrilled to partner with MATTER on this endeavor.”

“Since MATTER opened last year, we have heard from startups and innovators that they want greater access to clinical environments in which to develop ideas and test prototypes,” said MATTER CEO Steven Collens. “The OSF Simulation Stage gives them this environment and is designed to be highly flexible and adaptable to a variety of situational challenges.”

The OSF Simulation Stage is the second specialty environment that MATTER has designed to facilitate connection and collaboration between entrepreneurs and clinicians to advance healthcare. Previously, MATTER introduced the AMA Interaction Studio, in partnership with the American Medical Association, that provides an interactive environment for entrepreneurs and physicians to engage one another early on in the development of new solutions.

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Media Contacts:
Melissa Lederer
(312) 543-9537

Denise Molina-Weiger
OSF Innovation
(309) 308-9547

About OSF HealthCare
Headquartered in Peoria, OSF HealthCare is owned and operated by The Sisters of the Third Order of St. Francis, and consists of more than 18,000 employees in 115 locations, including 11 hospitals throughout Illinois and Michigan. Its physician network employs more than 1,000 primary care, specialist physicians, and advanced practice providers. More at www.osfhealthcare.org.

About Jump Trading Simulation & Education Center
Jump Trading Simulation & Education Center (Jump) is an incubator where collaboration and innovation lead the transformation of healthcare worldwide. Jump programs and objectives are key to improving the safety, effectiveness, and efficiency of care for community members across the region.
A collaboration between OSF HealthCare and University of Illinois College of Medicine at Peoria (UICOMP), Jump advances the missions of both organizations.

MATTER is a community of entrepreneurs, innovators and industry leaders working together to harness technology to improve health and healthcare. More than 130 healthcare technology startups operate at MATTER, and the company partners with 10 hospitals and health systems, four universities and more than 40 industry-leading companies. By equipping, empowering and emboldening healthcare innovators, MATTER accelerates the development of technologies that solve the right healthcare problems in the right ways. For more information, visit www.matterchicago.com and follow @matterchicago.

Salon Recap: Shift to Fee-for-Value and Impact on Medical Devices

In April, MATTER assembled a diverse group of stakeholders for a salon on how healthcare payment and delivery reforms are impacting the way health systems evaluate medical devices. The group included executives from device manufacturers including Abbott VenturesHill-Rom, Briteseed, and Diagnostic Photonics; providers, payers, technology and telehealth experts, and contract and procurement specialists. We  had a spirited conversation about how health systems and manufacturers are interacting in this brave, new, fee-for-value world. Following are a few high-level takeaways from the morning.


New Customers are Influencing Purchasing Decisions

Providers continue to consolidate both horizontally and vertically as health systems combine and purchase physician groups. This consolidation allows providers to enter into at-risk financial arrangements to manage the costs of caring for a population of patients. However, under these new care models, an individual physician’s influence over the medical device purchasing process is decreasing, causing health systems to involve multiple stakeholders – often called “value committees” – in the evaluation and purchase of new technologies. These new customers have unique incentives and priorities that medical device manufacturers need to be aware of.

Long-term Value is Increasingly Important to Payers and Providers

Both payers and providers want to understand the long-term value of a medical device, including its impact on cost, quality, and outcomes. Providers in at-risk financial arrangements are particularly focused on its impact on downstream medical costs (e.g., post-acute care use and setting). Some of the earliest examples of this trend can be found in orthopedics, where commercial and government programs such as Medicare’s Bundled Payment for Care Improvement initiative consolidate payments for acute and post-acute care services for joint replacement procedures.

Data and Analytics are Becoming Critical to Proving Value

Many manufacturers are already moving in the direction of collecting and analyzing medical device data and providing more connected and interoperable devices. To be more competitive in the future, however, manufacturers will need to understand what specific kinds of evidence payers and providers need to prove a device’s value under these new payment models – such as case studies and real-world examples – instead of just randomized clinical trials.

For those interested in more details about what was discussed at the salon, meeting notes prepared by Navigant Consulting can be found here. And if you a hospital administrator or medical device innovator interested in being part of this important dialogue in the future, please contact Shareef Ghanem (shareef@matterchicago.com), senior program manager, for information on upcoming events.

MATTER Member Profile: Dane Guarino of Markit Medical

Posted May 10 by Ornella Hernández
MATTER Journalism Resident
Medill School of Journalism, Class of 2016

Dane Guarino Markit Medical – MATTERIt was fall 2014 orientation day at the University of Chicago’s Booth School of Business. Dane Guarino sat next to his fellow first-year, Lance Larsen, and struck up a conversation. They had both recently left the investment banking world and come to Booth for the same reason: to build a health tech company. Lance would soon become Dane’s co-founder of Markit Medical, an online marketplace where patients can shop for healthcare services based on price, insurance coverage, and physician quality. Two years later, they’re about to launch their latest pilot.

Sites like Kayak or Expedia are industry standard to buy flights, because travelers value different aspects of travel such as cost, convenience, or timing. Guarino believes you can apply the same principles to medical procedures: say you need an MRI or a colonoscopy. Your PCP could refer you, but can he or she factor in price and insurance data?

Even if that were possible, patients question the confidentiality of their healthcare when it’s provided by their employer. For example, “Home Depot employees can see all of their healthcare options at work,” explains Guarino. “But none of the employees actually use the portal because they don’t feel comfortable. Our goal is to bring that data to the doctor’s office where the patient is most comfortable making healthcare decisions.”

Guarino and Larsen joined MATTER in summer 2015 after being named semifinalists in the Edward L. Kaplan New Venture Challenge at Booth. Here, they have developed technology to begin automating what was a manual and slow price estimating process. Rather than calling multiple provider facilities to receive quotes, Markit Medical will “build relationships with the specialist facilities so that we can automate the price collection process and show the patient all of their options much more quickly,” says Guarino.

Guarino keeps himself motivated, hydrated, and caffeinated while studying, attending lectures, cold calling, and visiting physicians and clinics. He’s never without a lemon water bottle, an espresso bottle, and a notebook – he credits his coffee addiction to his former life in I-banking. “This notebook probably has the last four month’s worth of interactions with mentors, investors, and potential business partners,” he says.

Guarino considers himself a self-starter who isn’t afraid of breaking the status quo. While in finance, he came up with new ways to model financial statements and helped design a CRM system that tracks clients more effectively. In healthtech, designing better ways to do things is his full time job. “Why isn’t pricing and insurance info at the doctor’s office so you know your options when being referred?” he asked himself. “Let’s see if we can become a part of the physician work flow.”

Markit Medical is currently developing a tablet application that automatically displays results in a PCP’s office. Patients can peruse quality level, location, convenience, and price to make a choice just as if they were “buying socks on Amazon.” The stakes, however, are a little higher for Guarino and Markit Medical. To connect with Dane Guarino, visit his LinkedIn.


Tales from the Trenches: David Jonas of PharMEDium

Posted May 12 by Ornella Hernández
MATTER Journalism Resident
Medill School of Journalism, Class of 2016

David Jonas, founder of PharMEDium Healthcare Corporation, sat down with ContextMedia CEO Rishi Shah at MATTER’s latest iteration in the Tales from the Trenches series. The hour-long conversation revolved around Jonas’ 35+ years of healthcare industry experience including hiring practices, the importance of service as well as product, and the staggeringly high stakes in healthcare. Watch the interview highlights and read our summary below.

Born in Israel, Jonas spent more than two decades at Baxter International as the chief financial officer of renal therapy services when he saw an opportunity to strike out on his own. Baxter had long practiced compounding – mixing drugs for pain management, surgeries, and epidurals – but was planning to cut the business segment loose in 2003. Jonas seized the moment and left Baxter to start a new company mixing drugs for hospitals who outsource ready-to-use compounding products.

Jonas tells Shah about building PharMEDium, sterile compounding, and his journey through healthcareJonas stressed identifying value proposition in the early stages of entrepreneurship. “You have to decide how different you are. You have to define what the customer wants and needs. Understand both the cost and the value,” said Jonas. In PharMEDium’s case, that value came from providing exceptional customer service. “In today’s environment, you can have a phenomenal product, but the service component will make or break your product,” said Jonas.

PharMEDium set out to provide a drug compounding service which included procurement, sterilization, mixing, packaging, and distribution. This meant building expensive facilities and infrastructures and hiring a core team. Jonas was deliberate in bringing in the right talent to augment the business, and bought 500 contracts from Baxter. “We needed people with an entrepreneurial spirit, who enjoy change, but also adhere to standard operating procedures. No cowboys,” he said.

Patient safety keeps Jonas awake at night, and loose cannons terrify him in the high-stakes drug compounding industry where any mistake could be deadly. Maintaining quality control and sterile procedures that comply with the U.S. Food and Drug Administration is fundamental to compounding, and PharMEDium excelled at it. Today, the company has about 70 percent of the market, according to Crain’s Business.

PharMEDium was able to become the market leader in sterile compounding by fostering a meticulous company culture. With success, however, comes accountability. Jonas recalled an incident involving a competitor whose contaminated batch of steroid injections caused meningitis and resulted in more than 60 deaths and about 750 injuries in 2012.

“This is unacceptable when a customer is trusting you,” said Jonas. “In 2003, The Drug Quality and Security Act passed and clarified the regulatory environment that we were subject to. This brought in all the investors,” said Jonas. This investment buzz continued, and in Fall 2014, PharMEDium was preparing to file their initial public offering. Rishi Shah, David Jonas, and Steve Collens at MATTERs Tales from the TrenchesAt the 11th hour, Jonas “got an offer that was too attractive to pass up,” and AmerisourceBergen acquired PharMEDium for $2.5 billion in November of that year.

“In the last few years, I started spending time in private investment, VC, and in bringing my healthcare experience to the table,” said Jonas. He had founded JVC Investment Partners in 2000 and currently serves as its president. His son Jonathon Jonas, who is a partner of JVC, sat front and center in the auditorium to listen to his father.

Rishi asked which market is most ripe for disruption. Jonas said that the U.S. is, but that Israel is the best for biotech – in particular, cardiovascular tech and neural modulation. As a born and bred Israeli, Jonas will now look back to his home country to invest in the IT business. Watch the full interview and join us for our next Tales from the Trenches on Thursday, June 23.

MATTER Member Profile: David Cohn of Regroup Therapy

Posted May 10 by Ornella Hernández
MATTER Journalism Resident
Medill School of Journalism, Class of 2016

There is a crippling shortage of mental and behavioral health providers in the United States. More than half of U.S. counties have no practicing psychiatrists, psychologists, counselors, or therapists, according the U.S. Department of Health and Human Services. Millions of Americans with mental health issues – from mild depression to schizophrenia – are not receiving adequate treatment. “If you are sick, who do you call? You call your primary care doctor. But if you have a mental illness, who do you call? Too many people don’t know what to do,” says Regroup Therapy founder David Cohn.

Founded in 2011, Regroup Therapy is a web-based video service that virtually connects therapists and psychiatrists to patients within a healthcare entity – for now, at primary care clinics, inside emergency departments, and at outpatient mental health entities. “We act as a staffing agency,” explains Cohn. “Let’s say you are a hospital and you need a certain provider type that you aren’t able to hire locally. We come in and we give you capacity.”

Cohn knows firsthand about the value of talk therapy, growing up with two social workers for sisters and regularly attending therapy sessions as a student. Cohn understands the pain Regroup alleviates from personal experience, as his venture strives to match patients with the specialists best-equipped to provide necessary mental and behavioral healthcare.

The ongoing shift in the healthcare industry from a fee-for-service model to one of value-based care presents an momentous opportunity for Regroup Therapy. Since it’s less expensive and more effective to consult behavioral and mental health specialists in treating patients with mental illness, health entities are now incentivized to fill behavioral health specialist positions that were long left empty. “If you don’t treat behavioral health, you can’t effectively treat diabetes, for example, because a lot of care is self care. It’s: ‘I’m so depressed that I can’t get out of bed and give myself insulin, so I end up in the hospital,’” says Cohn.

Regroup joined MATTER as a founding member in 2015, and landed a pilot six months later. Through the connections Cohn made at MATTER, Regroup soon signed contracts to work with Sinai Hospital System and OSF HealthCare. Regroup fills a specific and pressing need for health entities and furthers the conversation in a society that still stigmatizes mental health conditions. Emergency room doctors and primary care physicians increasingly understand the importance of specialized behavioral healthcare, and many now routinely have their patients consult behavioral health specialists via video conference.

Regroup recently raised capital from a group of investors including Hyde Park Angels, OCA Ventures, Impact Engine, and Harvard Business School Alumni Angels. The team is now scaling the business to help more patients get the help they need.

Cohn looks back on the last few years and recalls, “There were so many questions at the beginning. The only way to figure something out is to dive in and do it!” To connect with David Cohn, visit his LinkedIn or Twitter.

Is the Startup Funding Bubble Deflating? Not for Healthtech Innovators

Posted May 2 by Ornella Hernandez
MATTER Journalism Resident
Medill School of Journalism, Class of 2016

The Wall Street Journal published an article recently that put a point on what many investors have been saying for some time: we are seeing a contraction in the amount of venture capital funding available to entrepreneurs. The article specifically noted that Q1 represented the largest quarterly decline in VC funding since the dot-com bust – a 25% fall in cash deployment across all venture markets from Q4 2015 to Q1 2016 and a four-year low in the number of transactions completed. One prominent VC, Bill Gurley, also recently posted on the dangers of the “unicorn financing market” and the potential challenges facing the industry due to inflated valuations of many high-flying startup companies.

MATTER member Danny Bernstein of Metame, a platform for tracking and analyzing food consumption in patients with IBS, demos his product to investors at MATTER.
MATTER member Danny Bernstein of Metame, a platform for tracking and analyzing food consumption in patients with IBS, demos his product to investors at MATTER.

For the 125 startups at MATTER, many of whom are currently – or will be shortly – raising capital, this all could be very bad news … so we asked a few VCs who look at lots of healthtech deals for their perspective. “There’s no doubt we’re seeing some market-wide concerns, but it’s dangerous to read too much into one data point,” said Pritzker Group Venture Capital Partner Adam Koopersmith. “It’s not necessarily indicative of a massive swing of investment activity.” Indeed, Mattermark’s Q1 financing analysis concluded that the percentage changes in the number of deals and cash deployment from Q4 to Q1 were statistically insignificant. And Startup Health’s report on digital health investing found that Q1 was, in fact, the strongest funding quarter on record.

“The capital pull back is real, but no need to panic. Key is managing your cash burn to value creation milestones,” says Noah Lewis, managing director at GE Ventures. “Downturns are a routine part of any financial market’s fluctuations, venture capital included. We remain bullish on software- and tech-enabled services that enable healthcare stakeholders to transform their fee-for-service business models to value based care. This mega trend and related opportunities will continue unabated.”

“There is no doubt healthcare investing has some serious momentum that will only continue with the announcement of funds from strategics such as Illumina and OSF HealthCare,” says Koopersmith.

Dan Watkins, co-founder of Mercury Fund, meets with healthtech entrepreneurs at MATTER’s 2016 Midwestern University Healthtech Showcase

Indeed, at MATTER we see continued strong interest from investors in meeting new healthcare technology companies, and a continually expanding and vibrant community. With 125 healthcare startups and deep connections to Midwest universities, MATTER has become a magnet for investors looking for healthcare technology companies to invest in. “Because of the market shift from fee-for-service to value-based care, healthcare feels greater pressure than other industries to develop and adopt new innovations and technology solutions,” says MATTER CEO Steven Collens. “This level of demand should help cushion healthcare entrepreneurs against potential softening of the broader venture capital markets.”

“While it’s a good idea in markets like this to conserve cash and look to extend runway, the fundamentals behind the growth in healthcare startup activity point to continued strong demand for new technologies and services, and therefore to continued strong opportunities for investors,” added Collens.