After serving as an entrepreneur in residence at Providence St. Joseph Health in Seattle, Mike McSherry led the spin-out of Xealth, a company that allows clinicians to prescribe digital health assets to patients and track their usage. In a recent interview, he discussed how some of the largest integrated health systems in the country became both customers and investors. “Think of us as the Surescripts for digital health,” he said.
McSherry’s background included leading several startups in the telecom space, including Boost Mobile. One company he co-founded was purchased by Nuance and he worked at Nuance for a while on the mobile side of voice recognition. He was serving on the board of a local health system that merged with Providence, and a few years ago the Providence CEO urged him to work on healthcare solutions. After meeting with Aaron Martin, the organization’s chief digital officer, McSherry and a handful of his colleagues began an entrepreneurship in residence looking for problems to solve. He said he and his team had to learn some lessons about healthcare the hard way. “Free market dynamics and incentive structures that work in other markets don’t work in healthcare,” he said. “Also, it seems like nobody wants to fund prevention at scale.”
Eventually they came up with the idea for Xealth as a way for clinicians to prescribe and track usage of digital tools, services and apps. McSherry said something else that was different in healthcare was that health systems often collaborate. For instance, UPMC and Providence were collaborating on companies they were investing in. “UPMC saw what we had built as a prototype for Providence. And they said if you can show this working in our Epic environment, we will want to invest in this company and would like to commercialize this tech with you, so that precipitated us spinning out, and that was about three years ago.”
Today Xealth works with many of the largest integrated delivery networks in the country including Mass General Brigham, Atrium Health, Duke, Baylor Scott White, Providence, UPMC, Cleveland Clinic, and Advocate-Aurora. “Cerner also invested in us and they are reselling us to their customers. Banner is the first, and several others are under contract.”
“We manage the digital health formulary for 40 different vendors on behalf of hospital systems,” McSherry said. Through APIs, the platform is tightly integrated with the app vendor’s solutions and the health system’s EHR. (To date, Xealth only works in Epic and Cerner environments.) “Since everything is digital, we can track the patient’s usage and send that data back in the EHR for the clinicians to monitor or intervene if necessary. Digital offerings can include information such as videos or shared decision-making tools and questionnaires, surgical preparation and recovery apps, behavioral health apps, diabetes management and maternity care.
Xealth also can handle remote patient monitoring devices such as CPAP machines or even services such as meal delivery kits for post-operation recovery. “Anything that could be digitally facilitated could fit into our clinical work flow,” he said.
McSherry said the surgical prep and recovery apps are very popular as are maternity care programs. Behavioral health also has emerged as a strong digital offering. But he noted that “the deeper you go into chronic care, the more you get into the question of who pays. One of the big disconnects is that Livongo or other chronic care solutions are selling to payers and employers, but the hospital systems have not been incentivized to work on chronic care in the same way, so a lot of those solutions aren’t selling into providers.”
That touches on healthcare disparities, he said. Almost 100 percent of people insured commercially have access to a digital tool for diabetes or for behavioral health, but CMS has been slow to cover them as a benefit. “If you are on Medicaid, you have to find a face-to-face service, but if you have a United Health plan, a physician can prescribe AbleTo to you. Seniors and poor people often don’t have covered digital therapeutic benefits.”
