Part of the reason why we wanted to bring Startup Ship back was because we felt like talking about Portuguese startups who were really making a difference in the world.
With the Web Summit in Lisbon, we need to showcase the best of Portugal and, if you ask me, the best startups in Portugal are those who are solving real problems that will have a positive impact in the future of mankind.
Obviously, this includes those startups who are highly ambitious, who are developing products that will increase our lifespan, who will help us manage our resources more efficiently and who will help us take better care of our planet.
One of the industries which I’m particularly curious about is healthcare. Surprisingly for some, Portugal has amazing tech startups in this industry, with creative ideas and extraordinary scientists, to tackle the most relevant issues. These ingenious entrepreneurs are fixing what is broken in healthcare, like figuring out how to better connect doctors with their patients, how to prevent disease or how to help patients get the medication they need. Democratising healthcare and making us live longer and off hospital beds.
One of those companies is Line Health, a Portuguese startup that wants to fix what’s broken in healthcare and in the whole pharmacy experience, by making sure people get the medication they need, at the right time. Diogo Ortega and Sofia Simões de Almeida, two of the Line Health founders, had a Skype call with us last week to explain how they’ll shape the future of this industry and how their product will help not only patients but hospitals, physicians and insurance companies too. They have recently moved from Lisbon to the US to develop their solution, and since then, they’ve raised 1 million dollars in funding, partnered up with an American Insurance Group, Blue Cross Blue Shield, and a group of American hospitals, Baptist Health. Thanks to these recent development they’re about to launch their first pilot in Arkansas, one of the unhealthiest states in the US.
Read the interview we did with them and find out what they’re up to.
In your website you say that you’re designing the future of healthcare. How exactly are you doing that?
That’s a very good question, with a very long answer. Healthcare is different from other industries because it requires all partners to be aligned and that’s why we’re called Line Health, because we want to align with all the stakeholders. To work in the healthcare environment you need the support from payers, the insurance companies, the healthcare providers such as hospitals and physicians, and from the patients. So, I think that’s the main goal. We want to develop a solution that is futuristic in a sense that it uses innovation and technology but we need to make sure that all the stakeholders are aligned and that everyone has something to gain from it for it to work. It’s not enough to put another gizmo in the market and wait for people to buy it. We need to develop something very complete and that solves a problem.
“It’s not enough to put another gizmo in the market and wait for people to buy it. We need to develop something very complete and that solves a problem.”
What are doing at the moment to accomplish that? What is your main focus?
Are you going to be working directly with hospitals and health insurance companies as your main customers or more of a B2C model where you go directly to the patients?
One of the first things that we did when we arrived in the US was to attract those partners, because we came to the conclusion that doing something that is B2C in healthcare takes a long time and you have to put a great effort in marketing and communication to make people aware that you have a solution for them and that’s not easy at all. So, partnering up is definitely one of our main focuses. We’ve attracted an insurance company and a hospital system to be our investors and partners. They are Blue Cross Blue Shield, and Baptist Health. And now, because we’ve attracted them we can seat at the same table. So, at the moment we are designing a pilot together, and in the end if the pilot goes well we’ll then immediately scale to all their beneficiaries with multiple chronic conditions, which is a big market here in the US. So, great part of it was trying to understand how the US healthcare system works, which is very different from Europe. It’s very competitive and it has different players in different states, and I think these partnerships help us a lot in figuring out a solution.
“Healthcare is a real business here in the US, there’s more money to invest in innovation, because there’s more competition it fosters differentiation between each healthcare provider.”
How different is the healthcare system in the US in comparison to Europe and why have you moved from Portugal to the US?
In Europe most of the countries have a single payer system. So, the government in some ways pays for the medical bills of each patient or of each resident of that country. While in the US you have a private healthcare system that is very competitive. So, if you live in the state of Massachusetts, where we are, you probably have like 10 different health plans that you can choose from to be your provider and that creates a lot of competition which turns into innovation. Because healthcare is a real business here in the US, there’s more money to invest in innovation, because there’s more competition it fosters differentiation between each healthcare provider. So, that’s the main reason why. Then, another reason is the policy changes that we’ve been seeing here in the US, such as the Affordable Care Act, the Obama Care, that has put a lot of pressure in health payers and providers to reduce costs and to provide a population health management tools, instead of just paying for the hospitals and the appointments. It’s a combination of factors that is the change in policy, the existence of a lot of players and competition that fosters innovation more than in a single payer system. For example, if you want to pilot something in Portugal you need to talk to the government, the ministry of health, and that takes such a long time. It’s impossible to do it as a startup.
How does your device currently work? Can you describe it? And how will you organise the pilot?
Basically, if you are a patient you’re going to be recommended by your insurance company or by your physician to get your medical prescriptions through the Line Health service. So, the first thing that you’ll get is our device at your home but you also get your prescribed medication once a month. It works as a subscription model, you just get the device at home and once you get the refill of all the medications you put it inside the device. So, this device has an alarm, when it’s time to take your pills it goes off and it also tracks if you do. So, if you don’t get your medication at the right time we have that information in the app or in the cloud, and that’s very important, because this way we can alert a family member or a physician.
How do you get the medication? Do you have a specific partner for that?
Yes, we have a pharmacy partner called Simple Meds, which is basically the pharmacy that sends the medication to the patient. What we do is provide it an overall and comprehensive experience so that the patient doesn’t have to deal directly with the pharmacy. It’s very integrated in a way that you subscribe a service and then you get what you need.
“Companies sell more pills, patients are healthier for longer and stay off hospital beds, and for insurance companies they save a lot of costs because paying for pills is a lot cheaper than paying for hospital beds and medical procedures.”
In this context, how do you align the interests of both the hospitals and insurance companies, with those who actually use your product, the patients?
Because of the Affordable Care Act, payers, providers had to reduce costs and one way to reduce costs is to get people to take their drugs. Because when we’re talking about taking blood pressure pills and cholesterol pills and diabetes chronic pills, it prevents people from ending up in the hospital with a stroke, because you can manage your condition by taking your medication on time. Companies sell more pills, patients are healthier for longer and stay off hospital beds, and for insurance companies they save a lot of costs because paying for pills is a lot cheaper than paying for hospital beds and medical procedures.
How is the pilot coming along?
Well, it takes a long time because we’re talking about healthcare and hardware. But, we have commitment from our partners, so our main concern is just getting the product ready. And that’s why we’re investing so much in product development and in getting experienced team members to develop a product that can be built at scale in the future. Right now, we’re in the product development phase and user testing and in the beginning of next year we’re going to start the pilot phase. The pilot phase is different because we’re talking about 150 patients, with multiple chronic conditions, and our main goal is to get very good results from it.
What’s your vision for the future? What comes next after developing and implementing this IoT device?
Our mission is to fix what’s broken with the pharmacy experience, especially in the US, and that has multiple factors. One of them is people not taking their pills on time, which is what we’re solving right now. But, there’s also other factors such as the costs of drugs, we can actually helps payers and patients and solve that. Nowadays if you go to a pharmacy you don’t have the clear idea of how much you’re going to pay because the system is very opaque, you have a lot of interests from pharmaceutical companies, from PBMs… So, one of the things that we want to develop in the future is a system in which the patient can just log in and see, based on their prescriptions, what they’re going to pay for it and order it online. It’s kind of the Amazon experience and the experience that you have for Uber in the pharmacy space. The goal is to make healthcare more accessible and easier to interact with.
Do you think the future passes through providing more medication or less medication? How can we avoid the problem of over-prescribed medication in countries such as the US?
In the US there’s definitely the problem of over-prescribing drugs, and that’s something that the government, like Medicare and the Obama Care, are trying to solve by mitigating the risks of over-prescribing. But, in the near future people will still need drugs and we’re talking about the kind of things that we help people to take, which are mostly hypertension drugs, like blood pressure or cholesterol, or those are things that are not going away. You still need to control your blood pressure and cholesterol levels or you end up in the hospital, and those are very inexpensive drugs as well, you pay roughly 3 to 10 dollars at the pharmacy.
Regarding the future I think that pharmaceutical companies can do a lot in terms of integration and it terms of making life easier for the patients. So, instead of taking 3 different pills maybe they can put it all in just one pill and create a personalised medication for that patient. I mean, maybe we’ll go there in the future because it’s much easier for the patient.
In terms of founders, none of the founders of Line Health have a healthcare background. So, how does a startup succeed in the healthcare industry without having founders who’ve worked in healthcare before?
In my opinion that’s actually an advantage. As you know, when we were starting this company we went through the Bayer Accelerator in Berlin, and we’ve dealt with a lot of healthcare professionals, and I think that we have that outsider’s perspective. So, when we look at problems in healthcare we don’t see all as obstacles and barriers as some healthcare professionals do. They raise a lot of red flags, such as problems with regulations and so on. What we try to do is solve this creatively, without sticking too much to the regulatory obstacles, which we’ll eventually tackle in the future, but it’s with a different perspective.
We also have large network of advisers. For example we have a lot of physicians who have invested in our company and who are our advisers, so whenever we have a question that is healthcare related we ask them and we get an instant response. It’s the best of both worlds, we have the outsider’s perspective and the insider’s through our advisers who can give us a lot of information if we need.
Will you attend the Web Summit 2016 in Lisbon?
We’re not going, me and Sofia, we’re staying here in the US as we have a lot going on, in terms of product development and hiring and all of that. But, probably Luís, our CTO, and Lourenço, our business developer, and part of Lisbon team will be there, as it’s a great opportunity for networking, especially at the side-events.
Interested in finding out more about the best startups in Portugal? Subscribe to our newsletter.