Fuelled by the nation’s highly educated professionals, an entrepreneurial spirit and a risk-taking culture, digital healthcare in Israel is ready to move from startup to scale up, says Tjaša Zajc
There are more than 300 digital health-related startups in Israel and, surprisingly, none of them is called ‘pomegranate’, a name that would make perfect sense. Packed with vitamins and antioxidants, the fruit is celebrated for its medicinal powers and featured in the heraldic crests of several medical institutions, making it a perfect metaphor for health. This superfood also has a broader meaning in Israeli culture, symbolising fertility, prosperity and good fortune. Which startup doesn’t hope for that?
Fruit and hopes aside, let’s put the 300-plus in perspective. Israel is a small country, only 22,000km2, with a population of around 8.5 million and 60 hospitals. It is ranked third among 55 countries on Bloomberg’s healthcare efficiency scale, and yet the country allocates just over 7 per cent of its GDP to healthcare – around 2 per cent less than the European average. Following the US, UK, Canada and Ireland, Israel ranked fifth on the 2015 Global Digital Health 100 list – a ranking of startups that The Journal of mHealth claims demonstrates ‘true innovation and the opportunity to disrupt the delivery of healthcare at scale’.
There is some serious interest in the health-tech sector here. According to the Israel Advanced Technology Industries database (IATI), there are currently more than 750 companies in the life science sector, 84 in IT and 420 working on medical devices. And what’s the economic impact of digital healthcare in Israel? Quite big. According to the PwC Israel 2015 Hi-Tech Exit Report, mergers and acquisitions accounted for $7.2 billion in 2015, 44 per cent more than the preceding year. Total initial public offerings in the life science sector went up from $1.3 billion in 2013 to $3.6 billion last year.
As Levi Shapiro, the founder/leader organiser of the mHealth Israel conference likes to emphasise, there’s a strong startup culture in the country. There are several reasons for that. Israel doesn’t have a abundant natural resources, so higher education is valued and encouraged to drive innovation, plus compulsory military service gives innovators a special kind of discipline and set of organisational skills. The consequence: serial entrepreneurs are common. ‘If you ask a waitress if she’s an entrepreneur, she will probably say no. But if you ask her if her brother, cousin or other relatives or friends are, she will probably excitedly confirm “Yes, of course!”,’ explains Jon Medved, founder and CEO of OurCrowd, a crowdsourcing platform for investors. ‘It’s very easy to invest here. When you have an entrepreneur with an idea and a bunch of successful exits behind him, you don’t think twice about investing in his company. And 85 per cent of venture capital comes from abroad,’ Medved states.
To help potential rising stars in digital healthcare in Israel, Philips Healthcare and Teva Pharmaceutical Industries opened the Sanara Ventures incubator in Ra’anana last year. Also Medtronic, IBM and VC firm Pitango collaborated with Rambam Hospital in Haifa and opened up an incubator named MindUp there last year. This incubator slightly differs from others, explains Anya Eldan, General Manager of the Early Stage Companies and Incubators programmes at the Office of the Chief Scientist (OCS) at the Israeli Ministry of Economy. It’s a biotech incubator that invests in pharma, with the ‘winners’ selected through a public tender process. It invests between $500,000 and $800,000 in each company, 85 per cent of which comes from the government. The companies work side by side for two years. Eighteen technology incubators are a part of a OCS programme, eight of which invest in life sciences. According to IATI, there are 32 incubators and 76 accelerators in Israel for medtech and other startups.
When it comes to technological advancements, it’s not just visible in startups, but on a countrywide level too. Computerised national health records have been in place for more than two decades, evolving alongside the national plan for the development of ICT in health introduced around 1995. Hospitals are working hard on IT solutions. To encourage competition among healthcare providers, the Ministry of Health designed a mobile app that allows patients to see their approximate admission time even before going to hospital. While sitting in the waiting room, they can check the approximate waiting time, which room to go to for their consultation and how many patients are before them in the queue.
There are plenty of other examples showing how efficiency and well-thought-out organisation are key to innovation here. For example, in Tel Aviv, at the Sourasky Medical Center (commonly referred to as Ichilov Hospital), the underground car park can be transformed into an emergency hospital with 700-plus beds in just 48 hours. In addition, doctors working in the emergency room at Sourasky have, for the last couple of months, been using secure smartphones to access patient records in a digital form instead of using paper records. To allay patients’ concerns, while doctors are staring at the screens, the backs of the smartphones carry stickers that say ‘I am using this to take better care of you’.
The Sheba Medical Center – Israel’s huge medical facility with 1,700 beds, four hotels, two gas stations and a 17-floor garage on its premises, has been paperless since 2007. The hospital’s Deputy Director Dr Eyal Zimlichman reveals that its latest IT project involves the development of a patient-reported outcome system. The idea is to collect and analyse patient-generated reports on their health status, shifting the focus from measuring the medical parameters of health to patient-perceived healthiness and quality of life.
Despite all this progress, healthcare providers are still struggling with some aspects of introducing digital healthcare in Israel. Sourasky’s Deputy Director of Information and Operation Esther Saiag says they would really like to start providing patients with telemedicine. But they’re not quite sure how.
The conclusion? Just because you’re a small nation it doesn’t mean you’re doomed to be insignificant. There might not be a startup named after pomegranate in Israel (yet), but the positive characteristics associated with the fruit are very much in evidence.
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