HeartSounds, Inc.

Patients with CHF have to maintain a delicate balance of medications to manage their fluid status and pump function.  Put simply, CHF is a deficit of the heart’s ability to pump blood through the body.  When the pump doesn’t work, blood can back up, causing fluid to accumulate in the lungs.  This fluid overload can result in organ dysfunctions, including pulmonary failure, liver failure, renal failure, etc.  When the left heart pump is in failure, pulmonary circulation volume/pressure builds up and can cause fluid to leak into the lungs’ air spaces resulting in pulmonary failure.

The chfPATCH™ is a non-invasive metric of evaluating pulmonary arterial pressure, as it can calculate the A₂-P₂ time gap using only sound.  The device is placed onto the patient’s chest near the heart, acquires their heart sound information and then calculates the A₂-P₂ split utilizing a novel blind source separation method. The device is completely non-invasive, user-independent, continuous and inexpensive to manufacture.  The chfPATCH™ can be used to intermittently or continuously monitor congestive heart failure (CHF) patients remotely, either from home or in a hospital/ambulatory environment.

Heart failure affects more than 5.3 million people in the U.S. and more than 10 million are diagnosed globally.  Direct costs exceed $30 billion and hospital costs represent $17.8 billion of this sum- more than 50% of the total.  Studies have shown that more than 44% of patients are readmitted within 6 months of their initial heart failure and more than 20% of all hospitalizations are considered preventable.  Due to the limitations of current CHF monitoring, and the increasing acceptance and understanding of the benefits of remote patient monitoring, HeartSounds recognizes that a great opportunity exists for an easy-to-use, objective, direct metric of monitoring CHF patients.  According to recent market research, the telemedicine market is expected to increase to $7B in 2012 from $3B in 2008.  Remote CHF patient monitoring is a subset of this large market and is currently valued at roughly $500M.  By reducing unnecessary hospital readmissions, HeartSounds chfPATCH™ can help decrease U.S. healthcare costs by up to $6.4 billion annually.  This has a net positive impact on patients, physicians and hospitals alike.

Reduced hospitalizations:  The Health Technology Center (HealthTech), a non-profit research organization, devised a study to demonstrate the net effects of remote patient monitoring, including CHF.  Their study demonstrates that remote CHF monitoring, even with the current indirect methods, resulted in a 32% decrease in hospitalizations.  In 2009, independent research from the New England Healthcare Institute (NEHI) concludes that remote CHF monitoring can cut hospital readmissions by more than 50% and prevent 460,000 to 627,000 heart-failure admissions annually.  HeartSounds’ chfPATCH™, in combination with traditional remote monitoring techniques, can provide a much more accurate metric of cardiac health; potentially further reducing these patient admissions.  The table below demonstrates the potential savings associated with reducing hospital readmissions utilizing the chfPATCH™:

Of the U.S. population with CHF, 30%, or 1.59 million patients, are classified as Class III or Class IV heart failure patients.  These high-risk patients will benefit most from remote monitoring technologies.  Assuming that 80% of high-risk patients, or 1.27 million patients, will be readmitted each year, the chfPATCH, at a cost of $1500/unit, can yield cost savings between $4.7 billion and $6.4 billion in any given year.

Reduced patient costs:  HealthTech and the NEHI both concluded that remote CHF monitoring can substantially reduce patient healthcare costs.  The former concluded a 25% cost reduction of $1800 per patient, while the latter predicted a $2000-$3000 savings on average.  Extrapolating these numbers to the U.S. patient population, just a 25% adoption of remote CHF monitoring would save more than $500 million per annum.  Ideal Life®, a remote health management system, showed an ROI of 7:1 with indirect monitoring alone. 

Reduced hospital costs:  Heart failure hospital costs exceeded $17 billion in 2007.  There has been a movement in recent years towards telemedicine due to the savings achieved through the more efficient services it provides.  GE and Intel recently partnered to co-market wireless systems to capitalize on this trend, investing more than $250 million.  Multiple studies, including from NEHI, demonstrates that remote CHF monitoring results in efficient, targeted patient care, increased patient satisfaction and education.  But, more importantly, remote monitoring achieves cost savings in multiple ways.  The reduction in hospital admissions and ER visits can save on hospital staffing and can better leverage RNs.  By avoiding readmissions, the average hospital can save $2 million in direct costs annually.  Plus, the backfill opportunity by avoiding admissions is roughly $1.7 million annually.

The Centers for Medicare and Medicaid Services (CMS) in 2009 created new codes to report remote patient monitoring technology when the service meets certain specified criteria.  Although uncertainty still revolves around reimbursement, the new codes were a great first step to broadening coverage for the chfPATCH™.  With guidance from the NEHI, which obtained data through expert interviews and CMS reports, HeartSounds has gained insights into the following strategies to gain coverage for the chfPATCH™: 1) Medicare could provide provisional national coverage when there is insufficient evidence for unlimited coverage and 2) In the absence of this coverage, Regional Offices may pursue Local Coverage Determination (LCD).