Startup MDisrupt could help healthcare execs avoid the next Theranos

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Ruby Gadelrab, former VP at 23andMe, and Jill Hagenkord, former CMO at Color Genomics, teamed up to launch MDisrupt — a consultancy venture that aims to determine if there’s evidence to back up healthcare startups’ scientific claims, per CNBC.

Gadelrab and Hagenkord say they’ve already lined up a few law firms and startups as early clients, though they can’t publicly announce who just yet. The two are motivated by a desire to temper Silicon Valley’s "move fast and break things" approach — which can conflict with the highly regulated, risk-averse healthcare environment — with the diligence of medical professionals sworn to "do no harm."

Here’s what it means: The digital health industry is becoming more crowded — which in turn makes it more difficult for healthcare incumbents to vet potential new partners.

A study earlier this year found that many of the highest-valuehealthcare startups aren’t publishing quality scientific research.Of the nearly 50 companies reviewed in the study, a quarter hadn’t published a single peer-reviewed paper. And healthcare startups valued at less than $100 million often had even fewer publications to their names, per STAT.

This lack of public research and expert oversight extends across the industry: Only 22 mHealth apps have had their effectiveness evaluated in the last decade, despite hundreds of thousands being available for download. This puts payers and providers in a balancing act as they try to meet member demands for more convenient digital health solutions, while ensuring the companies they partner with deliver improved clinical outcomes.

The bigger picture: Firms like MDisrupt that aim to regulate the digital health industry from within could be a boon for the space’s long-term success by providing some protection against the failure of high-profile startups.

Health startups are under greater public scrutiny following the implosion of Theranos and the messy track record of uBiome — and we see a strong potential for companies that can help healthcare stakeholders better vet the claims of fast-moving startups.

For example, women’s health startup Nurx allegedly kept returned birth control pills in a closet shoe organizer and instructed customer service reps to repackage and send out the unused drugs to new customers, per The New York Times.

However, we could see more rigorous metrics used to evaluate health startups in the future and better guide payer decision making if efforts to self-regulate within the industry take off: ExpressScripts launched the first digital health formulary this May, and CVS Caremarkfollowed up a month later when it unveiled its digital therapeutics platform to provide assistance to its payer partners.

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