Pilot Framework: Developing Robotics & AI Solutions for the Older Adult Population

Thanks to Aging2.0 for their input and resources in compiling this framework.

The post World War II era was marked by great technological innovation and a booming economy. A simultaneous population surge kept growth afloat. Fast forward 70 years and many developed economies are facing challenges associated with an aging baby boomer population and declining birthrates. By 2050, the world will be significantly older — Asia will have more older adults than the rest of the world combined and the median age of Europe will hover in the late 40’s. In the same year, 21.5% of the human population will need aging care and there will be at least 100 million American older adults, for only 50 million available professional and un-trained caregivers. We ask, “what technologies have to be developed to meet this growing challenge?”

At Comet Labs we are interested in how Intelligent Machines (IM) permeate all industries. Artificial intelligence systems, robotics and hardware, as well as data gathering and machine learning have propelled a generation of new technologies that are enabling us to rethink how care is administered. One result of this has been an increased focus on personalized and automated care. As demand for senior care continues to grow, care models, expenses allocation, and community structures desperately need to become more efficient and efficacious. Comet Labs worked with various stakeholders including the CEO and President of PRCN senior care community and an investment associate at Kaiser Permanente Ventures, to understand the needs of the aging ecosystem, as well as with technology startups, including Seniorly and Catalia founders and CEOs, that are helping create solutions for this market.

The result is a comprehensive report detailing current market opportunities, a landscape of IM startups developing solutions for older adults, as well as a pilot framework. We hope sharing our pilot framework will help startups developing new models and technology in senior care, and push advances in this sector altogether.

1. Figure Out What CUSTOMERS You Want/Need

When developing a robotics or AI solution for the older adult population, older adults are not the sole customers to consider. Hospitals, caregivers, care providers, insurance companies, and families, are also important stakeholders to keep in mind when developing a product or service. The question is, how does one go about identifying these different customers and getting in touch with them?

Potential early-adopter customers (based on # of pilots run):

Brookdale Senior Living, El Camino Hospital, Genesis Rehab Services, Home Instead Senior Care, LCS Family, Medline, National Investment Center for Seniors Housing and Care, PointClickCare, Revera Living, Silverado, Trident USA, Atria Senior Living, MatrixCare, Prime Care Properties, Ventas

Where to meet your future customers and investors in 2016:

Boomers & Beyond — Thursday March 31, 2016 (San Francisco, CA)

Aging2.0 “Innovation in Aging” — Wednesday April 6, 2016 (Baltimore, MD)

Caregivers Count! 6th Annual Conference — Saturday April 16, 2016 (Campbell, CA)

AARP 2016 Health Innovation — Wednesday April 27, 2016 (Sunnyvale, CA)

d.Health Summit 2016 — Wednesday May 4, 2016 (New York, NY)

The AGE-WELL Pitch Competition: Dementia — Saturday July 23, 2016 (TBA)

NIC Fall Conference 2016 — Wednesday September 14, 2016 (TBA)

Aging2.0 OPTIMIZE — Wednesday October 12, 2016 (San Francisco, CA)

For more information about local events in Australia, Spain, China, Germany, Belgium, Canada, The Netherlands, Peru, The Czech Republic, Brazil, Taiwan, Israel or Japan, get in touch with one of Aging2.0’s local chapters.

Potential investors (based on # of deals concluded):

Early stage: DreamIt, RockHealth, Eniac, Healthbox, Data Collective, AME Cloud

Mid-late stage: Khosla, KP Ventures, HLM Venture Partners, Bain Capital, Tencent

INSIGHTS

Arthur Bretschneider, CEO of Seniorly, says that in his experience approaching small caregiving communities for pilots is not as valuable in terms of meaningful data gathering as working with larger caregiving communities or hospitals. Indeed, both software and hardware solutions rely on the collection of a lot of data to “learn.” Especially in the early stages, large data sets are important in order to prove and iterate on any given algorithm.

2. Identify an Actual PROBLEM, Then Develop Technology to RESOLVE It

Many silicon valley startups start off with a technology and then look for a problem. Chief Information Officers (CIOs) in healthcare have limited budgets and are unwilling to devote resources if a solution doesn’t fix one of their clear cost or revenue issues. One easy way around this is to work closely with your customers from Day 1!

It is up to the startup to involve the customer early in their product development cycle. By involving clinical guidance early and often, starting from the early brainstorming portion to full scale launch, startup can de-risk product market fit. Ignoring your customer’s needs will not only lead to the wasting of resources and time, but also to an extremely likely failed launch of product. As iRobot investor Hanns Anders explains: “There is no more mission critical a problem than healthcare — proof points are totally different and the opportunity cost of failing is much bigger.” Quick iterations and early communications help reveal mismatches in perceived problems and solutions.

One big problem that needs to be addressed with the help of IM startups, is related to data capture and flow. There exists a tremendous opportunity for a startup to disrupt and push the industry forward by pooling data in one place. Today, there simply does not exist a good solution for making more data accessible. What is standing in the way are perverse business incentives, more than data protection regulation. A startup that is able to come up with a business model that can allow for the flow of care data will have huge opportunities to succeed. Until then, investors will have to continue considering how much data a company has collected before investing — indeed, at this point, data remains a very important differentiating factor.

INSIGHTS

“It costs $200m to house 400–500 seniors in one building. For now, older adult caregiving communities need help with lifting people, lifting objects and dishwashing, among other things. Given new labor laws and the baby boomers coming down the pike, there is absolutely no way we can provide a multitude of services through human labor, whether it be supported by private or public funding.” — Torsten Hirche, President and CEO of PRCN

3. Develop a Structured Transparent PROCESS, With A Clear GOAL In Mind

By now you have clearly defined your problem and have used this to determine who your pilot partner is. Ideally you have already established a working relationship with a director with sufficient insight into the workings of the hospital or care system to understand how your product fits within their offering. This internal stakeholder, the champion of your product within your partner’s system, will be the best early source of insight into your partner’s overall needs not only with regards to short-term product implementation but also demonstrating success of the pilot to the organization as a whole.

Early consultation with your product champion will help in understanding what milestones and metrics will demonstrate success to both your startup and the organization with which you are collaborating. The more transparent on deadlines, performance indicators, and implementation concerns both parties are, the more likely the pilot team will be to catch errors early and achieve a successful pilot.

Think about your expectations post pilot — “What does a successful pilot look like?” Do you want a contract/dataset from your pilot partner? Hit the goals stipulated in your pilot roadmap with the view to building a longer term partnership.

If your main goal is mass manufacturing, try to get an order from your pilot partner before you manufacture your first batch. Scaling from prototype to mass manufacturing is no simple feat — especially with regulation around medical/health devices. Instead of manufacturing too early, the early stage startup should make maximal use of prototypes with a variety of end-users and refine a prototype until traction is strong enough that sales are closed. When considering whether or not to provide funding to early stage startups via Small Business Innovation Research (SBIR) grants, the NIH and NSF place strong emphasis on sales closed using prototypes for their $1M phase II award grants. Although many startups consider Letters of Support or Commitment sufficient proxies for sales, sales revenue is the strongest show of success of a product. Short of revenue, good usage metrics with prototypes demonstrate the product market fit of the product.

INSIGHTS

“First we tested reactions to our social robot in a couple of older adults’ homes. Now we are working with a healthcare institute to pilot our robot with 1000 people. They have committed to funding the manufacturing of these units. Our hope is to have our concept evaluated both in and out of healthcare institutes.” — Wang Long Li, CEO of Tinybots

4. INCENTIVES — Always Have the PEOPLE Who Will Be Implementing Your Solution in Mind

This is often an important business strategy consideration for startups, as they must recognize that the user and the buyer, and implementer, are not always the same. These varying interests make strategy considerations for the startup critical from Day 1, and can have far ranging effects from fundraising strategy to product design to sales practices.

When developing new solutions, don’t forget that technology doesn’t work or get implemented on its own, especially in the healthcare and caregiving sectors. You will likely need a whole team of people to recruit pilot participants, organize pilot set up logistics, and oversee the smooth running of the pilot. Most care startup solutions to date have required a considerable number of people figuring out the step-by-step implementation of the solution — these include case managers, social workers, nurses. One of the biggest drawbacks of existing solutions is that very few can just be thrown out there and be automatically or easily implemented. Some hospitals, like Montefiore have done a great job at pooling their caregivers together, which makes it slightly easier for them to pilot innovative technology solutions.

At this point in time, the healthcare and caregiving industries aren’t very responsive to IM startups because they aren’t convinced the solutions will be effective. More often than not, a startup doesn’t quite understand the inner workings of a hospital or caregiving institution, and hence, in their view, the pilot is a waste of resources.

Some advice:

Be curious about the workflow of your pilot partner, study the healthcare industry, and spend as much time as possible with your various stakeholders — older adults, nurses, hospital case managers. Also don’t forget that while you may be “offering” your pilot for free, it will cost the hospital or care institution meaningful resources — money, labour and time — to get your pilot up and running.

INSIGHTS

An Associate at Kaiser Permanente Ventures urges you to think about incentive structures. “Only at the point when you’ve collected data to definitively offer 99% accuracy insights will a physician trust and use your solution. In the intermediate stage, who are the people who will be happy to use this solution? Do you aim to be replacing these people with your solution? If yes, how will you get them to work with you? It’s a whole dance!”

5. Be Aware of REGULATION, Though Don’t Let It STOP You

The healthcare regulatory landscape is a complex and constantly evolving one. Regulation and regulatory bodies you should be aware of :

FDA (USA) — The Food and Drug Administration is responsible for

promoting public health through the regulation of a number of

industries including drug evaluation and medical devices. HIPAA (USA) — The Health Insurance Portability and Accountability

Act of 1996, is U.S. legislation that provides data privacy and

security provisions for safeguarding medical information IRBs (USA) — An institution review board (also known as

independent ethics committee, ethical review board, or research

ethics board, is a type of committee used in research that has

been formally designated to approve, monitor, and review

biomedical and behavioral research involving humans. National Data Protection Authorities (EU) — Each EU country has its

own regulatory body in charge of data protection, in the UK

it is called the Information Commissioner’s Office.

However, it should also be noted that while healthcare data sets are heavily regulated in the United States, it is possible to gain access and train your machine learning algorithms on other data sets, whether it be on peripheral open source datasets (eg. HealthData), or datasets from a different country. Even in America, people have been happy to tolerate more and more openness of their data, in exchange for better services and care (eg. FitBit). The law and regulation are in many cases playing catch-up to advances in machine learning developments and data processing, and so it is very possible that small incremental changes in consumer habits will change the healthcare industry as a whole.

Also, keep in mind that not all regulation will play against you as a startup. For instance, many people argue that Obamacare and The Affordable Care Act have allowed for the development of many IM startups that are aiming to fix the U.S. healthcare system.

INSIGHTS

Cory Kidd, Catalia Health CEO, advises to identify exactly how regulation will impact your solution at different stages of product development, especially early on. This is indeed one of the most important factors to keep in mind while developing your solution — various investors, including Kaiser Permanente Ventures, only invest in startups post-FDA approval.

6. Do the MATH For Your Customers, “Efficiencies” Are Too VAGUE

Entrepreneurs must do their best to understand their customers’ businesses as well as the customer themselves. Whether it’s a company or organisation’s cost structure, income streams, most pressing concerns, industry trends, industry-specific changes in costs, who the biggest and smallest players are, etc. If you want to be taken seriously, you need to understand your customer’s problems better than they do themselves.

This is especially true in the case of elder care services. With complex payer models and convoluted incentive structures. Consider your pilot partners’ revenue and expenses streams, and calculate how these will be affected.

Elder Care Facilities and Hospitals’ Revenue & Expenses Items:

Operating Revenue: Government subsidies + State Grants + Resident Client/Patient Charges + Provision of Services + Bond Retentions + Interest Income + Trust Distributions + Donations/ Contributions

Non Operating Revenue: Non Operating Interest + Capital Grants + Profit on Sale of Assets + Revaluation Increase + Insurance Claims + Other Revenue

Total Expenses: Wages (Care) + Wages (Admin) + Wages (Other) + Management Fees + Depreciation & Amortisation + Interest + One-off Expenses + Staff Overheads + Building Repairs & Maintenance + Insurance + Workers Compensation + Motor Vehicle + Rent + Lease + Utilities + Loss on Sale + Revaluation Decrement + Other Expenses

INSIGHTS

“Electronic health records were a real ordeal to implement, both with regards to money and time spent. Even if it is clear now that it was worth going through the process, it left scars on the system. It wasn’t clear what the benefits would be at the time,” Beth Ludden from Genworth, explains. To minimize resistance, calculate exact cost and/or time savings, or increased revenue. Unquantifiable “efficiencies” are a hard sell, numbers speak for themselves.

7. Develop Solutions That Are INTUITIVE To Older Adults — UX/UI Are Vital

Be aware that companies that have developed products that weren’t originally designed for older adults will compete for this market. They can make use of the same fundamental technology but will need to revisit the whole UI/UX of the product. They will also need to fundamentally review sales channels — most older adults are not currently connected to App Stores and online marketplaces.

As a disruptive startup, you can bring a fresh pair of (highly design and usability-oriented) eyes to already existing solutions. Products that are going to have some of the biggest benefits for older adults include smart cars, smart homes and wearables. Co-founder of Aging2.0, Stephen Johnston says “you don’t need to reinvent the wheel, however there is a need for redesigning and rethinking business models.”

One of the common misconceptions about older adults is that they don’t use technology, when actually well over 20% of senior citizens in America are already avid social media and smart device users.

Nevertheless, older age does have effects on various functions including vision, hearing, motor movement and cognition:

Vision: decreased ability to focus eyes, lower light sensitivity, increased sensitivity to glare, reduced sensitivity to color and contrast, narrower field of vision

Hearing: hard to filter out background noise, hard to localize where sounds are coming from, hard to understand fast speech and detect high-pitched sounds

Motor: reduced control, reduced hand-eye coordination, slower movement, stiffness, difficulty grasping objects, difficulty with continuous movements, increased variances in movements (increased risk of unintentional click or touch), decreased sense of touch

Cognition: reduced short-term memory and attention span, longer learning times, reduced ability to “multi-task”, more easily overwhelmed

INSIGHTS

“It’s great getting a lot of roboticists together, however they will sometimes develop great tech, without thinking about how it will actually be used by industry and everyday people. That is one issue we faced for many years at iRobot. Once we figured out how to design the Rumba, and save people’s time, it was an easy sell.” Hanns Anders, iRobot Investor

Other good resources:

RockHealth’s Guide to Hospital Partnerships

Innovation lab: Evaluating a pilot project in long-term care

Top 10 Tips for Partnering with Startups in Elder Care

It would not have been possible to put this pilot framework and report without the help of Aging2.0, iRobot, Genworth, Kaiser Permanente Ventures, Catalia Health, Seniorly, PRCN, Permutation Ventures, Tinybots and Aging-in-Place Technology Watch.

Contact us with questions and/or feedback at hi@cometlabs.io. To request access to our full report Intelligent Machines and Aging, click here. To sign up for our newsletter, sign up here. If you are interested in attending our next event or contributing to our next report on Agriculture, please fill out the following form.