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1Mby1M Deal Radar 2016: i-Human Patients, Sunnyvale, California

Posted on Monday, May 23rd 2016

i-Human Patients, Inc. is a cloud-based e-learning company that is focused on rapidly developing and evaluating critical cognitive competencies in healthcare students and practitioners. Its main value proposition is that it simulates encounters with patients in order to teach users how to quickly, accurately, and cost-effectively assess and diagnose patients.

Early Journey

i-Human Patients was founded by Craig Knoche, President, and his wife Anne Tweet, VP Product Management. Craig and Anne had extensive multimedia and browser technology experience with large companies like IBM, Taligent, and BCG. In the late 1990s, after Craig was treated for cancer, they decided to work on only the things that made a difference in life.

As avid mountain climbers, they had undergone extensive emergency medical training and realized first hand that healthcare education used suboptimal learning techniques. To address this gap, they founded Summit Performance Group (SPG), which developed standalone physiological and clinical skills simulators. In 2009, several medical schools approached Craig and Anne to integrate SPG’s standalone simulators into comprehensive, interactive patient encounters for training and assessment. Craig and Anne jumped at the opportunity and created i-Human Patients, Inc in late 2012 after successful beta tests. They recruited Norm Wu, a serial entrepreneur in technology and healthcare services, as CEO.

Around this time, the two-year clerkship or apprenticeship model was falling apart. There was a mandated reduction in work hours for resident mentors that added to the inadequacy of the antiquated healthcare education system. This led to the mushrooming of several first-generation virtual patient companies such as InTime (publisher of the MedU series of cases), DxR, and DecisionSim.

These first generation virtual patients would take an old medical school, paper-based case discussion model and put them on the web. Students would be given an expert’s synopsis of a patient’s medical history, symptoms, physical exams, and diagnostic tests, and then be asked multiple-choice questions about the potential diagnosis and treatment plan. However, it was pretty much like a static Powerpoint presentation with somewhat dynamic navigation dependent on the student’s answers to multiple choice questions.

This “pre-packaged relevant data” approach did not reflect real life, nor did its passive learning modality lead to superior learning outcomes or high retention rates. In addition, these first generation virtual patients lacked an easy-to-use authoring tool and a repository of contemporary medical media assets like MRIs, X-rays, EKGs, and histopathology slides.

i-Human Patient tried to bridge this gap. It provided an active learning approach that was significantly more effective for learning and retention. It used a programmable animated avatar in the clinic who could be coughing, wheezing, or breathing and blinking quickly based on the case scenario. The students had to assess, diagnose, and treat the patient. They learnt to ask the right questions of the patient, perform the right physical exams, identify and rank the potential diseases, order and interpret the right diagnostic tests, confirm the diagnosis, and develop a treatment plan.

i-Human Patient also monitored and stored in the cloud the hundreds of micro decisions that each student made during a patient encounter. At every step, it could provide automated, personalized feedback and coaching where the student’s performance was compared to that of an expert. Such prompt feedback was very conducive to learning.

i-Human Patient gained early traction in the school market, specifically in diagnostician schools. The American Medical Association, around that time, started a major strategic initiative to transform medical education and provided it multiple grants for case content development. It then partnered with the Reliance Foundation of India and contracted over 80 expert medical educators to author new cases. It also started exhibiting at various healthcare education and simulation conferences that generated leads and customers within the diagnostician education community. Press coverage, best-of-show awards at conferences, and being voted by VCs as one of the three finalists for 2014 Healthtech Most Promising Company also helped in early traction.


i-Human Patient currently has over 50 institutional customers, including medical specialty boards and schools with pilot programs and full subscriptions. Its customers include Rush Medical College, Rosalind Franklin University of Health Sciences, Pritzker Medical School, University of South Alabama, and Drexel University. It has had over 10,000 users on its platform in the past three years. Customer churn, as measured by annual revenue, has been just 5.3%.

It follows a subscription-based business model. Subscriptions can be from 4 weeks for a short clerkship to 24 months for a two-year PA program. On average, its flagship platform is priced at $295 per user per year for its school customers. Shorter subscriptions pay a higher monthly rate of $49/month. The pricing of its premium case content and other e-learning products is variable.

Its key target segments include medical schools, nurse practitioner schools, undergraduate nursing schools, medical specialty boards, professional organizations, and healthcare provider organizations. CEO Norm Wu feels adoption by medical specialty boards is strategic to its efforts. Given the size of the relative market segments, it expects talent development/human capital management for provider organizations to be a top target segment.

Total revenues in 2015 were $5.5 million. While much of its early revenue was driven by non-recurring grants and development agreements, it is now transitioning to recurring subscription revenues. On a GAAP basis, 2015 recurring subscription revenues grew 135% over 2014 to $0.62 million. Subscription bookings grew 530% over 2014 to $2.1 million. Its customer acquisition cost is 38% of first year subscription revenues as it uses direct selling. Technology platform development accounts for majority of its costs. It has a software development team in Silicon Valley and has some additional software development in Mammoth Lakes, California and a wholly owned QA and content development support group in Chennai, India.

Based on a bottom-up analysis, the company estimates the total addressable North American school market to be worth $300 million and the North American practitioner market that includes medical specialty boards, professional associations, and provider organizations to be an additional $4.7 billion. Globally, it estimates the market to be worth 3-4 times that of North America.

i-Human Patient raised a $2 million Series A Preferred round from angel investors in late 2012. It incorporated a $750,000 friends and family convertible seed round when the company was launched. Since then, it has received approximately $11 million in non-dilutive financing (grants and development agreements) that has largely funded its next generation platform and content.

It is currently doing a capital raise to fund additional platform development, its expansion within the school market and the practitioner market. Ideal investors would be either angels or institutional investors who have an understanding/appreciation of the healthcare market and the impact technology can have on it, and can add value to its success.

As for its exit strategy, Norm says,

“We will likely be acquired. We know there is interest from discussions with prospective content and distribution partners. Potential strategic acquirers include large medical publishing companies that are transitioning to digital solutions companies, large healthcare education and simulation companies, and healthcare consulting firms that are becoming increasingly focused on technology solutions to assist provider organizations in improving their quality and reducing costs as payers move from volume-based fee for service to value-based reimbursement plans.”

This segment is a part in the series : 1Mby1M Deal Radar 2016

. i-Human Patients, Sunnyvale, California
. Torchlite, Indianapolis, IN

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