Sramana Mitra: Tell us a bit more about i-Human Patients. What do you do? How do you do what you do? What are the trends that we see in play in this particular venture?
Norm Wu: We are fundamentally an online education technology company. We’re focused mainly on the healthcare professional vertical market. Specifically, we make virtual patient technology. This is a cloud-based platform to simulate life-like patient encounters all for the purpose of developing and assessing what are thought of as very difficult, critical-thinking, and cognitive competencies. These are things like, “How do you assess and diagnose patients quickly, accurately, and cost effectively so that you can treat them appropriately?” It’s what we think of as the Sherlock Holmes part of medicine.
What we are doing is really addressing two very large pain points. One is basically the quality of care. If you look at the research studies, you’ll find that anywhere from 5% to 25% of patients are misdiagnosed, and half of those misdiagnoses can actually be harmful. It results in 40,000 up to 150,000 avoidable deaths each year. It accounts for a very, very large portion of the $700 billion to $1 trillion of unnecessary healthcare that is being spent.
If you think about it, if if one has been misdiagnosed, one is wasting money treating the wrong disease. Meanwhile, the thing that one should have been treating all along is escalating to the point where it becomes a lot more expensive to treat or the patient dies. Both of which are really bad. Not surprisingly, misdiagnosis is the leading cause of medical malpractice lawsuits, which in itself, is a $6 billion industry. Misdiagnosis accounts for a full third of lawsuits and claims payouts.
So the first pain point is the quality of care and finding a way to reduce misdiagnosis rates by making sure that future clinicians and current clinicians are adequately trained on these very difficult cognitive competencies. The second problem we’re addressing is the huge shortage of qualified providers. In the US, all the baby boomers are aging.
As people age, their propensity to develop diseases goes way up. That creates a lot of pressure on the healthcare system. In addition to that, the Affordable Care Act was passed. Over time, that will enable up to 32 million additional people to have health coverage for the first time ever. The combination of those two is putting tremendous pressure on the supply and demand of healthcare in the US. We think we have a shortage of 30,000 physicians today going to 90,000 in less than 10 years. That’s even with nurse practitioners and physician assistants stepping in to fill the gap.
But this is nothing compared to developing countries around the world. In India, for instance, their national goal is to get to just a third of the per capita physicians we already have today in the US. To do that, they have to train 1.6 million more physicians. And probably, about 2 million to 3 million more nurses. When you think about the magnitude of that problem, you think about how you find ways to leverage technology somehow so that you can train and scale in a very high quality and consistent way.