Wondering how much your VC-backed startup's tax return will cost?   Check out our startup tax cost calculator to get an estimate now!


With Scott Orn

A Startup Podcast by Kruze Consulting

Subscribe on:

Scott Orn

Scott Orn, CFA

Special Kruze COVID19 Good News Episode: Seth Freedman of Intelligent Observation digs into an important way to reduce hospital infections for patients and healthcare workers

Posted on: 05/13/2020

Seth Freedman

Seth Freedman

General Manager - Intelligent Observation

Seth Freedman of Intelligent Observation - Podcast Summary

Seth Freedman, General Manager at Intelligent Observation, talks about technology that can drive behavior modification to dramatically reduce hospital infections. From idea to iteration to actually getting healthcare workers to follow proper hand hygiene compliance guidelines in major hospitals. He also discusses how this new technology can help combat the COVID crisis. Looking for information on the COVID related stimulus, the CARES Act?

Seth Freedman of Intelligent Observation - Podcast Transcript

Scott: Hey, it’s Scott Orn of Kruze Consulting, and welcome to another episode of Founders & Friends. Before we start the podcast, let’s give a quick shout out to Rippling. Rippling is the new cool payroll tool that we see a lot of startups using. Rippling is great for your traditional HR and payroll. They integrate very nicely, but guess what? They did another thing. They integrate into your IT infrastructure. They make it really easy for when you hire someone to spin up all the web services in their computer, which sounds kind of like not a huge deal, but actually, we did a study at Kruze. We spend $420 on average just getting a new employee’s computer up and running and their web servers up and running. It’s actually a really big deal. It saves a lot of money. The dogs are eating the dogs. We see a lot of startups coming into Kruze now using Rippling. So, please check out Rippling. Great service. We love it. I think we have a podcast with Parker Conrad. You can hear it from his own words, but we’re seeing them take market share, so shout-out to Rippling. Now to another awesome podcast at Kruze Consulting’s Founders & Friends. Thanks.
Singer: (Singing). It’s Kruze Consulting Founders and Friends with your host Scotty Orn.
Scott: All right. Welcome to Kruze Consulting and another episode of Good News During COVID. And today my very special guest is Seth Freedman of Intelligent Observation. Welcome, Seth.
Seth: Hey, Scott. How are you? Thanks for having us.
Scott: Oh, my pleasure. And so, just a reminder for the audience, the whole idea around this is we’re highlighting Kruze community members, companies we work with and people we know, who are doing really amazing things for health professionals, or the health community, or doing other stuff to help us during COVID. And Seth’s company is like right perfect for this Good News podcast. Maybe do you want to tell everyone how you had the idea to start Intelligent Observation?
Seth: Sure. Absolutely would love to. Intelligent Observation actually started about five years ago when I read an article about something called healthcare acquired infections, which, up to that point, I’d actually never heard of before. And, as I read through this article and it talked about these infections, which are, simply stated, infections you get, while you’re under the care of a hospital that have absolutely nothing whatsoever to do with why you were originally admitted, I was absolutely blown away. First of all, these infections are extremely prevalent. One in 20 patients admitted to a hospital here in the U.S. Actually, acquires one of these infections, which is really astronomical. They cost to our healthcare system about 30 billion dollars a year with a B. And the most incredible statistic I read in this article was that there are about 100,000 deaths every year in the U.S. From healthcare acquired infections. Which Scott, that’s more fatalities annually from these infections than from breast cancer and prostate cancer combined.
Scott: That’s crazy. That’s crazy.
Seth: The more I read this article, the more fascinated I became. And I reached a point in the article where it talked about the fact that the Center for Disease Control in Atlanta and the World Health Organization in Geneva both agreed that up to half, 50% of these infections were actually completely preventable. And the number one way to prevent the infections was by getting healthcare workers to follow proper hand hygiene compliance guidelines that are already established and in place in hospitals.
Scott: I believe it.
Seth: And, if you think about what was happening in the technology space about five years ago, it was sort of the beginning of the wearable craze. It was the intro to Fitbit. And I thought at the time, you know what? There’s got to be a way to utilize technology to monitor hand hygiene compliance in a healthcare setting in an effort to make an impact on these very, very dramatic infections. And that’s how we started.
Scott: That’s incredible. I knew a little about this because I did my MBA internship at Becton Dickinson. And is it MRSA? Is that one of the bugs?
Seth: Correct. MRSA. We call it MRSA, but it’s MRSA.
Scott: Right. So, but we did an acquisition for a company, a diagnostic for them when I was at Becton Dickinson. So, I know. And I didn’t know it was 100,000 people per year. That’s just insane. I mean, that’s like five COVIDs, or in the United States, at least. So, you guys, how did you do this? Like what does the product do?
Seth: Yeah. So, we’ve gone through, as most startups do in the beginning of their life cycle, we went through a number of iterations of looking at various versions of technology, available technology in a way to basically mimic what is the current gold standard that’s used by hospitals. It’s really interesting. So, hospitals in the U.S. Are actually required to monitor hand hygiene compliance of their healthcare workers. And they have reporting requirements, whether it’s to an accreditation organization, like the Joint Commission, whether it’s to the National Institute of health. There is a fantastic organization called Leapfrog, which actually provides public information on healthcare facilities around all sorts of things like what are the infection rates at a hospital you might be looking at going to for a procedure. So, we looked at how do we replace the current gold standard? And interestingly enough, the current gold standard that’s used by hospitals is a clipboard and a pen. Right? Which is a pretty amazing thing. Right? We live in this incredible time where we have 4D scanning imagery and robotic assisted surgery. And here you look at this really important task of managing hand hygiene compliance in an effort to reduce these infections, and we are actually using something called visual observation.
Scott: Wow.
Seth: Someone standing in the hallway watching a healthcare worker with a clipboard, and a pen, and a manual checklist. And originally, we started out and we looked at what offerings were in the marketplace and sort of what were the shortcomings of those offerings based on a really extensive surveying we did with about 150 different hospitals. And it was really interesting. What we found out was there were three really important issues to the existing technology-based solutions in the market that all seemed to bubble up to the surface for almost every customer. It was solutions were very costly. They were very complex to install, or for the hospital to have to support post installation.
Scott: Yeah.
Seth: And thirdly, and most importantly, they weren’t accurate enough for the hospitals to use in monitoring hand hygiene. And, when we started to look at inaccurate, complex and costly, we realized, you know what? There’s a common denominator with every solution out there that ties into those three aspects. It was basically the technology platform that was being used. Traditionally, companies have tried to use radio frequency technology to accomplish the solution, whether it’s RFID, whether it is Bluetooth, WIFI triangulation, infrared, some combination of what is known as traditional radio frequency technology. And actually, this technology, radio frequency, in the use case doesn’t work very well for a number of reasons. First and foremost, physics. The radio frequencies that are used in most of these common applications are absorbed by water.
Scott: I was going to say. I was going to ask that. Yeah.
Seth: Our bodies are more than 50% water. So, when you put a device on a healthcare worker that you always have to do to monitor them, and you pair that up with other sensors you place around the hospital, the water in your body actually limits the accurate of radio frequency.
Scott: That’s crazy.
Seth: Yeah. We stumbled upon a really unique technology called near-field magnetic induction. Actually, almost everyone is probably familiar with the technology, although nobody is familiar with the name of it. And it’s actually the technology that’s used in the automotive industry. When you’ve got a key fob for your car and it’s push button ignition, it’s the technology that allows the car to know, if the fob was in your pocket or your purse, and you’re sitting in a car, you push the button, the car starts. But, if you get out of the car and you stand right next to the door, the door is closed, nobody inside the car can push the button and start the car.
Scott: Yeah.
Seth: It’s centimeter level proximity detection. And there’s also a whole host of other varieties of aspects that make it really, really beneficial in our use case, including the fact that the frequency passes through water.
Scott: I was going to say; the car manufacturer solved the water problem. Right?
Seth: Exactly. So, car manufacturers actually solved the problem of technology going through water and monitoring hand hygiene for healthcare workers.
Scott: That’s so funny. That’s amazing. Wow. So, five years ago you were iterating and you started commercializing this?
Seth: So, we iterated it. We started out with what was a wrist worn radio frequency identification device, commonly used technology platform. And we did what medical technology startups do. We found a hospital that was willing to pilot with us. We put the product in. And we learned a ton. We learned, first of all, that you can’t put a wrist worn device on a healthcare worker. Culturally, it’s very, very difficult to accomplish. And we realized really for the first time in the actual use case with the environment itself, radio-frequency, or RFID, doesn’t work. It’s not accurate.
Scott: Yeah.
Seth: And so, we iterated. And we developed a second generation of product. And we put that product into three different University of Pittsburgh Medical Center hospitals. And we learned a lot more. And we realized, you know what? We’re on the right track, but we’re still not 100% there. And that’s when we stumbled upon near-field magnetic induction and created a version that we piloted at St. Jude Children’s Research Hospital in Memphis.
Scott: Wow.
Seth: And we were lucky enough to work closely with Johns Hopkins in Baltimore, the thought leaders in infection control, to provide us some guidance. And we completed the commercial version of our product the very end of 2019, Q4 of 2019.
Scott: Good for you. I didn’t know it was that new. Wow. That’s amazing. So, now are you going out to like… You’re like, hey, Johns Hopkins supports this and St. Jude supports this, and going out to other hospitals and helping them?
Seth: We are. So, we’re really blessed to count among the first commercial customers of ours Hopkins, who has our product on their pediatric ICU, one of the most important wards or units in their hospital facility.
Scott: Yeah.
Seth: And a customer of ours is also HCA, Hospital Corporation of America, the largest chain of hospitals based in Nashville, Tennessee.
Scott: Wow.
Seth: So, we’re going to be moving from startup to scale up, which is-
Scott: Oh, good for you. That’s awesome.
Seth: Yeah. A whole other set of challenges for sure, but really, really exciting.
Scott: That’s amazing. And what’s the feedback been from like nurses and doctors? Do they like the accountability? I can imagine they really care about patients. So, that’s their ultimate goal is helping patients and reducing infection rates. Right?
Seth: It’s always a really interesting time when we go into a hospital install. Because you sort of get this spectrum where most of the healthcare workers in the U.S. Want to do what’s right. They are really patient centric focused. Occasionally, you get the people that say, you know what? I don’t like being monitored. I know the hospital is required to do it, but I still don’t like it. And I sleep with tinfoil at night on my head so that the government can’t control the waves in my thoughts. And you always run into a little bit of that. But really, for the most part, it’s such a unique tool. Part of the tool is providing the data to the infection prevention teams so that they can look at hand hygiene compliance by the various units in the hospitals or by the roles that healthcare workers perform in the hospital.
Scott: Yeah.
Seth: But the second part that we provide is actually specifically for the healthcare workers themselves. We do it two ways. One, we call real time point of patient care noncompliant alerts. Long explanation, which simply states, if a healthcare worker forgets, or is busy, or is preoccupied and they don’t follow proper hand hygiene guidelines, before they ever put their hands on a patient, beep, beep, beep, beep.
Scott: Oh.
Seth: An alert from their smart data folder that says, stop, go wash or sanitize your hands, then continue.
Scott: But the preemptive nature of that is so amazing because you’re reminding them right at the moment when they’re about to infect someone else. That’s really awesome.
Seth: Correct. And you know what? It’s sort of analogous to the way we all use the seat belts in our car. Right? Almost all the time you get in the car, you put your seat on. But there’s that one time where you’re engrossed in conversation with somebody, you get in the car, you start the car, and you start to pull away, and you hear ding, ding, ding. You reach up and you put it on.
Scott: Yeah. Yeah.
Seth: And that’s what we see is a perfect example of how the real time alerts work in the real use case.
Scott: Yeah. That’s amazing. How has the COVID world impacting you guys? Or how are you impacting and empowering some of the physicians and nurses fighting OCVID?
Seth: Yeah. So, COVID is a really interesting time. It’s interesting for us. I think there are some significant almost advantages. I hate to use that term with what’s going on. But there is almost some unique tailwind for us that COVID has created. And then, I think the other side of the coin is sort of the situation that all companies, whether they’re startups or Fortune 500 companies that are selling into this hospital space are going through right now. The advantage is for us, if you will, we’ve actually been able to build into our product a really unique healthcare worker tracing element. So, because all of the interactions between healthcare workers entering and exiting rooms or interacting with specific patients are date and time coded with our solution, we’ve been able to implement very, very quickly a mechanism that allows healthcare worker tracing. So, if a healthcare worker now comes in contact with a patient that presents, for example, at the emergency department that has symptoms of COVID-19, but hasn’t been tested yet, the hospitals are required to trace and track which healthcare workers are coming in and are interacting with that patient.
Scott: Yeah.
Seth: Hopefully, the patient is negative and sent home. That information can be thrown away. But, if the patient is tested positive, whether the patient is discharged or is admitted, that tracing needs to continue. And that historical record has to be built. We have a function that does that automatically now built into our suite.
Scott: That’s great. And that probably makes the nurses and doctors love the product because they know there’s some accountability. And they also know that like, hey, if I get COVID-19, I’ll be able to trace back to where I got it. And maybe it’ll save some of my coworkers. Right? That’s the problem, right, the infection across the coworkers?
Seth: Scott, that’s actually a great point. We produce a product that we always talk about makes a hospital environment safer, but it makes it safe for not just for patients. It makes it safer for the staff that works there every day as well.
Scott: I believe that. Wow. That’s really incredible. Well, Seth, this is amazing. What you’re doing is really cool. I didn’t know you just finished your product in Q4 2019. This is like perfect timing. I wish you much good luck. And thank you for just empowering all the doctors and physicians that are helping all of us. That’s really cool. Maybe you can tell them where they can find Intelligent Observation and how to reach out if they’re interested.
Seth: Absolutely. So, people can certainly reach out to me directly. My email is my first name, Seth, S-E-T-H, dot my last name, Freedman, F-R-E and then another E-D-M-A-N@intelobserve.com. Or they can go through our website www.intelobserve.com. And again, Scott, thanks so much for the opportunity to really appreciate it.
Scott: Oh, my pleasure. Thank you. Thanks for helping the community.
Singer: (Singing). It’s Kruze Consulting Founders and Friends, with your host, Scotty Orn.

Explore podcasts from these experts

Important Tax Dates for Startups

  Talk to a leading startup CPA