U-M Student Fund Invests in Conversa Health’s Patient Engagement Tech

The University of Michigan’s student-run Social Venture Fund has contributed to a $3 million seed round forConversa Health, a Bay Area heathtech company aiming to improve patient engagement. The amount of U-M’s investment was not disclosed.

Conversa CEO West Shell said he started the company to try to fix the “monstrous gap” in the U.S. healthcare system that results when patients leave the hospital with a care plan requiring adherence. According to the National Institutes of Health, patient nonadherence can jeopardize recovery, with an estimated 40 percent of patients sustaining significant risks by misunderstanding, forgetting, or ignoring healthcare advice. It’s a problem many startups, as well as large healthcare organizations, are jockeying to solve.

Conversa’s primary offering is the digital checkup, where an algorithm generates personalized follow-up care questions delivered in the form of casual-sounding text messages, emails, or private inbox messages on a patient portal. Conversa’s browser-based service, which works on any device, integrates information from electronic health records, biometric monitoring software, and patient-generated health data to determine what follow-up questions to ask. Once the patient submits their information, it’s analyzed and added to the patient’s electronic medical record, where the care team is then able to see it and respond, if necessary.

“We automate outreach to patients,” Shell explained. “It’s a very personalized conversation. We’re continuously providing messages and getting information back about how they’re doing. Everything is based on the health profile of the patient, and it’s a rich, digital snapshot.”

Shell first got the idea to start Conversa while building his previous company, amedical-specific search engine called Healthline. Although Healthline was making health information available electronically, it wasn’t putting a dent in the problem of patient nonadherence to care plans.

“We weren’t facilitating behavior change,” he said. “The patient-doctor relationship is trusted, but when patients leave the clinician’s office, it’s just a black hole. Our product enables a continuous and collaborative relationship between doctor and patient.”

Shell is passionate about the current challenges in the American healthcare system, which only recently began undergoing a sea change in the way insurers reimburse hospitals, doctors, and clinics. Thanks in part to the Affordable Care Act, we’re now moving toward a more European model, where insurers pay for good outcomes rather than covering procedures and treatments ad infinitum.

“It’s the most dysfunctional thing I’ve ever seen,” Shell said about the current system. “A patient needs to adhere to a care plan to be healthy. People do what they get paid to do, and they haven’t been paid to care for patients very often. The good news is that it’s changing rapidly.”

Conversa has lots of announcements planned this year, including hospital partnerships and major distribution platforms. West said the 13-person company has raised a total of $3 million in the past two years.

A team of seven U-M students from the Zell Lurie Institute for Entrepreneurial Studies and the Ross School of Business located the deal after screening nearly 160 companies and conducting a three-month due diligence process. For Conversa, this process included analyzing the company’s management team, its product’s effectiveness and market potential, its financial records and revenue projections, and its potential to create positive social impact.

West was clearly impressed. “I love those guys at U-M—they’re college kids, but they’re smart and very diligent,” he added. “The whole program is brilliant. It’s a really smart way to show students how business works.”