Venture Capital Investments Growing, But There are Fewer of Them: Signs of a Bubble?

Venture capitalists invested $5.87 billion in 736 U.S.-based companies during the first quarter of 2011, according to a new MoneyTree Report released by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters. That translates into $7.98 million per deal, which is 18% larger than the average deal size during the prior quarter.

This is also is 21.6% higher than the average deal size in Q1 2010, and 47% larger than the average deal size in Q1 2009.

The rising deal sizes “indicate that VCs are trying to pump more and more cash into companies than they were in recent years past. And that means they expect larger cash-on-cash returns,” according to a Fortune article.

“Overall, software companies continued to lead all industry sectors with $1.1 billion raised for 187 companies last quarter. This was followed by industrial/energy with $1.03 billion for 75 companies and biotech with $784 million for 85 companies.”

“Per usual, Silicon Valley led the nation with $2.49 billion invested in 212 companies. New England placed second with $639 million for 90 companies, and New York Metro snared $580 million for 69 companies.”

Health Cost Drivers Include Rising Demand, Aging Population, Chronic Disease

A report from the American Hospital Association says “the demand for health care is rising due to advances in medicine, an aging population and a rising burden of chronic disease. At the same time, the costs to pro­vide that care are increasing: new devices and drugs are adding to hospital expenses for each service; workforce shortages are driving up wage rates; and hospitals are making significant investments in clinical information technology, quality measure­ment, care coordination and compliance with increasing regulatory and payer requirements.”

“Understanding these cost drivers is critical to developing strategies to contain costs,” AHA says.

While “hospital care remains the largest single category of health care spending,” hospital care “as a percent of total spending on health care services and supplies has actually declined from 43 percent in 1980 to 33 percent in 2009, AHA says, citing CMS data released in January 2011.

In addition, “growth in spending on hospital care has lagged behind growth in health insurance premiums, pharmaceuticals, and other services,” according to the report.

For example, AHA notes that Baylor Regional Medical Center in Plano, TX implemented an evidence-based intervention created by the Institute for Healthcare Improvement to eliminate ventilator-associated pneumonia (VAP). The institution reports no cases of VAP and direct cost savings of $150,000 per patient, totaling more than $3 million in savings from March 2007 through April 2009.

Consortium Joins Health Plan EMRs in Effort to Improve Care through Data Sharing

Five leading health systems – the Mayo Clinic, Geisinger, Kaiser Permanente, Intermountain Healthcare, and Group Health Cooperative – have announced a new initiative to securely exchange electronic health data, with the first data exchange planned in the next year. The consortium will utilize standards-based health information technology to share data about patients electronically.

These health organizations are largely closed medical systems, and will likely play a large role in the Accountable Care Organization effort under health reform. An ACO must have a high-level electronic medical records system in order to be effective and to qualify for enhanced Medicare payments.

The goal of the consortium is to demonstrate better and safer care with better data availability. If a patient from one system gets sick far from home and must receive health care in another system — or if any system sends patients to another — doctors and nurses at each of the consortium systems will be able to easily and quickly access invaluable information about the patient’s medications, allergies, and health conditions, allowing them to provide the right kind of treatment at the right time and avoid unintended consequences like adverse medication interactions.

“This collaborative effort exists because we all have reached the same important conclusion about linking and sharing patient-specific data,” said George Halvorson, chairman and chief executive officer of Kaiser Permanente. “Our…belief is that when doctors have real-time data about patients, care is better and more effective.”

Kaiser “Center for Total Health” Envisioned as “Interactive Learning Destination” for Policy Makers, Public

Kaiser Permanente has opened the Center for Total Health, an “interactive learning destination” for “innovators, leaders, influencers, thinkers and believers in wellness to talk about health,” the company says.

The center demonstrates what Kaiser Permanente and others are doing to advance health and care delivery in the US. “A major part of Kaiser Permanente’s commitment to total health is sharing best practices and facilitating discussions that will improve the health of our nation,” said company President and COO Bernard Tyson.

The center features interactive displays intended to inspire dialogue about improving health and wellness, including the following:

• A short documentary introduces visitors to Kaiser Permanente’s history and its founders, Henry J. Kaiser and Sidney Garfield, MD.
• Interactive touch-screen walls allow visitors to explore the concept of “total health:” how people define total health, challenges to achieving it and solutions that are working.
• One of the world’s largest multi-touch video walls — an 80-foot-long mural — teaches visitors about the health benefits of walking, how easy it can be to integrate walking 30 minutes, five days a week into their own lives, and helps them understand how to build walkable communities.
• Technology demo stations highlight some of the latest advances in telemedicine, mobile health apps, medication adherence, and delivering care through Smartphone technology, tablet computers and home electronics.

“The center will be the first place that leaders and the general public can go to see the real-world convergence of health, health care technology and innovation,” said Philip Fasano, chief information officer and executive vice president of Kaiser Permanente.