How to Pivot a Digital Health Startup: The Story Behind Apri Health

Apri Health, a data analytics and healthcare startup incubating in the Mayo Clinic Business Accelerator, is expanding their focus. The five-year-old company uses machine learning and artificial intelligence (AI) to query large sets of medical data to create “ecosystems of action within healthcare systems.” Now, they are applying their data analytics platform to ask more questions and transform that information into actionable results for healthcare systems.

Apri Health Founder and CEO Dr. Mark Ereth had a very successful, twenty-five-year career in anesthesiology at Mayo Clinic before retiring- and then launching a company. Ereth, a native of North Dakota, attended graduate school and performed his fellowship at the clinic; he then remained on staff as a physician/scientist. During his time at Mayo, Ereth pioneered an analytics program to reduce unnecessary blood transfusion expenditures, saving the healthcare system $25M.

“But I was ready for something different,” he explained.

Ereth licensed some of the intellectual property that he developed from Mayo and launched his own startup in 2013, called Transfuse Solutions, with serial entrepreneur and physician Dr. Jamison Feramisco, an expert in telehealth and high tech.

“The best thing I happened to do was get a good partner,” Ereth said.

With Ereth’s expertise in reducing blood transfusion costs and Feramisco’s seasoned career in digital health, the team set out to attack overutilization issues in healthcare, focusing in on blood transfusion. These events, Ereth explained, are the most common medical procedures in the country. However, they are often unnecessary and expensive.

Ereth, Feramisco, and their team of “cutting edge AI and machine learning experts” developed a patient blood management solution that used machine learning to query large sets of medical data and provide a solution to reduce blood transfusion-associated costs to the healthcare system.

However, Ereth says he always knew the company would expand beyond the blood market.

In June 2016, Transfuse Solutions rebranded to Apri Health with the mission to “transform data-rich, insight-poor environments into profound ecosystems of discovery and action.”

The team had already built the data analytics platform that could interface with electronic health records (EHRs)- comprehensive, digital records of a patient’s medical history. The platform used machine learning to develop new algorithms, daily, to query these massive EHR datasets, delivering actionable intelligence to healthcare systems.

“If you have the records, you just have to change the question,” Ereth explained. “You can run an experiment every four hours by just changing the questions.”

They now have applied their data analytics system to solve other healthcare overutilization issues beyond blood.

Recently, Apri Health has applied their machine learning to solve the issue of cost of care. They’ve partnered with a hospital in Hartford, Conn. to help the system assess how much it costs to deliver specific items of care and analyze how these rates impact the institution.

As one example, Apri Health examined congestive heart failure patients admitted within the Hartford system with the same clinical diagnoses and identical outcomes. They discovered that patients treated by cardiologists incurred a much higher daily cost to the hospital system than those treated by hospitalists- physicians, nurse practitioners, and physician assistants who provide general medical care to hospitalized patients.

“We were able to say if we’re looking at value-based care, why have a cardiologist take care of patients when the hospitalists can get them out of the hospital, with the exact same outcomes, for essentially $5,000 less per visit?” Ereth asked.

Apri Health is also moving into the field of pharmacogenomics, using genetic testing to predict metabolic response to drugs. The team formed a partnership with a large genetic firm and launched a successful pilot study with Georgetown University and the University of California, San Diego. Now, they’re looking to move into other areas, such as opiate metabolism.

The digital health company has also applied their data analytics platform to a less sexy area: medical billing. They’ve used the software to query 1.3M lines of bills- from seven years of healthcare data and $3B worth of billing- and found “450M in fraud, waste, or abuse.”

“We started off as this blood company, but now we’re doing all this other stuff. And part of our problem today, as a company, is keeping focus in what we’re doing and yet also expanding what we’re doing,” Ereth explained.

In his long career in medicine, Ereth has seen what it takes to be a successful clinician/scientist: a mix of asking the right questions, pursuing the right questions, and mobilizing resources to address those questions. He also sees a lot of commonalities between medicine and business.

As a physician, Ereth said, “You’re making a decision on behalf of the patient, sometimes with only eighty percent of the information you’d like. It has short and long term implications. And death is always out there.”

The same is true in business. But instead of death of a patient, that same choice can lead to the demise of a company.

Ereth thinks the environment in Rochester is now primed for entrepreneurship, thanks to the work of people like Xavier Frigola and Gary Smith at Rochester Area Economic Development, Inc., along with others in the community. Things are now much easier for entrepreneurs in this exciting time of development.

He says what’s lacking is capital and local angel investment. Apri Health themselves has only one investor in Rochester; the rest are spread across the country.

“There’s a lot of innovation in town. And I think it’s really capital [that’s needed] to drive that innovation,” Ereth explained.