Tuesday, May 21, 2013

Venrock Invests $10 Million In Medical Second Opinion Platform ConsultingMD



5/21/2013 @ 7:15AM

As chief of interventional radiology at Stanford Hospital specializing in blood clots in the leg, Lawrence “Rusty” Hofmann routinely got requests from patients around the world for a second opinion on a treatment or diagnosis. One patient from Australia was ready to mortgage her house to come see him in Palo Alto, Calif. Hofmann asked instead for her medical records and images—sent in PDFs and CDs, and referred her to a specialist in Melbourne.
Still, it wasn’t until two years ago, when Hofmann’s then 8-year-old son was struck with a rare blood disorder, that the radiologist realized how lucky he was to have easy access to the world’s top experts. “That galvanized everything,” says Hofmann. “My son wouldn’t have gotten the care he needed. I got frustrated with patients who come see me, and who received the standard of care—which is 10 to 12 years old; what you want is state of the art.”

In 2012, Hofmann formed ConsultingMD, a selection of 230 specialists culled from medical institutions such as Duke, UCSF, and Harvard, and considered experts in their field. He won’t disclose the number of cases the physicians have handled so far, but says that six out of ten cases resulted in a different treatment or diagnosis.
There are no numbers on the frequency of second opinions. Medicare might pay in some cases for another surgical opinion; same with health insurance companies. Patients may still feel uneasy about seeking the opinion of another physician, and when they do they’re typically motivated by disappointment, as some studies have shown. One thing is clear though, misdiagnoses are common, deadly, and costly. According to research by Johns Hopkins, over the past 25 years diagnostic errors accounted for nearly 29% of insurance claims at a cost of almost $40 billion, and more often resulted in death.
Medical centers such as Johns Hopkins, Cleveland Clinic, Partners HealthCare and MD Anderson offer second opinion services. Johns Hopkins charges $565 to review a case, and $250 to interpret an image. Rival WorldCare works with a consortium of hospitals that includes Duke, Mayo Clinic , and Partners; and Best Doctors boasts more than 53,000 physicians in its network.
“When you start throwing out numbers, you miss the point; we’re skeptical of large number games,” says Owen Tripp, ConsultingMD’s chief executive, and formerly chief operating officer of Reputation.com. For example, Hofmann is listed in Best Doctors’ roster, although the company never contacted him. ConsultingMD has contracts with its specialists, and covers them for malpractice. It pays them on a per case basis, from $400 to several thousand dollars, a rate they can determine.
ConsultingMD plans to make its money by offering its services to employers as a cost-saving tool, for a few dollars a month per employee. (Tripp won’t disclose amount, or the number of customers). ConsultingMD gathers the patient’s medical record, test results, and images in one file, and matches the patient with the right specialist—sometimes with the help of an algorithm. The start-up says it delivers a consultation within 48 hours—more or less what competitors promise. Venrock’s $10 million investment will help ConsultingMD expand its network. Partner Bryan Roberts who now sits on its board is one of only two health IT investors on the Midas List.
What if second opinions have the reverse effect of driving up costs? Says Hofmann: “It will lower costs, because experts know when to bring out the heavy guns, and when not to.”

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