Seedfunders, an early stage investment firm in St. Petersburg, is one of three investors in Intelligent Observation, a Miami company with technology to track handwashing compliance to control infections in hospitals.
Dreamit Ventures, a fund and accelerator in Philadelphia in which Tampa Bay Lightning owner Jeff Vinik is a partner, and Jumpstart Foundry, a seed stage healthcare innovation fund in Nashville, also took part in the $500,000 funding round, said Seth Freedman, founder and CEO of Intelligent Observation.
It’s the first outside investment for the company, which was founded four years ago and just completed the commercial version of its product.
“Almost every conversation I have had over the last four years about our company and the problem we’re solving has included someone saying to me, ‘My brother, my father, a friend, went into the hospital, acquired an infection and had either a very difficult recovery or in some cases the worst outcome that you could possibly have,’” Freedman said.
Those conversations fueled his passion to solve the problem.
“We have a completely preventable problem that causes a tremendous amount of pain and suffering. And as broken as our healthcare system is, this is an easy way to make a huge impact on that broken system,” he said.
That “easy way” is hand washing, the No. 1 way to reduce healthcare-acquired infections, Freedman said.
“According to the World Health Organization, up to 50 percent of these infections can be eliminated entirely if we just get healthcare workers to follow the proper hand hygiene guidelines that are currently in place,” Freedman. “It seems so easy. If we can just get healthcare workers to wash or sanitize when they are supposed to, we can eliminate a large portion of the estimated 100,00 deaths each year associated with these infections, and about $30 billion worth of costs to the U.S. health care system.”
Hand hygiene is so important that hospitals are required to monitor and report it. Hospitals generally use “visual observation” — someone with a clipboard and pen watching healthcare workers and checking yes or no on a checkbox asking if they have washed their hands, Freedman said.
Visual observation captures only about two percent of the events when a healthcare worker should be washing his or her hands, he said. Intelligent Observation’s technology captures 100 percent of the events, according to Freedman.
“It works with proprietary hardware and software that we’ve developed over the last four years. It’s what we call a smart badge holder, which is a small device that is the retractable portion of a badge holder that houses the hospital-issued ID that all healthcare workers are required to wear when working in a hospital. That device interacts with a number of battery-operated sensors that we place around the hospital that allow us to mimic the visual observation criteria that a facility has through our electronic system,” Freedman said.
“For example, when a healthcare worker walks into a patient’s room, the smart badge holder that they’re wearing talks to a small sensor placed above the patient’s door. It say, has this healthcare worker washed or sanitized their hands before they’ve entered the room? If they have then it notes that that’s a compliance event and it pushes that data to a cloud-based system that we use. If the healthcare worker hasn’t washed or sanitized their hands before they entered the room, it gives them a period of time in the room to use an alcohol-based hand rub dispenser or to use soap and water. If they don’t, then the smart badge holder provides an audible alert at the point of patient care.”
Unlike other sensors that use radio frequencies, Intelligent Observation’s platform is near-field magnetic induction, the same technology used by the military to inventory high-value assets. It’s also the technology in some automobile key fobs.
The technology can detect behaviors required for specific infections. For instance, c. diff., a gastro-intestinal bug that’s transmitted rapidly through improper hand washing, won’t respond to an alcohol-based hand sanitizer and requires the use of soap and water to kill it. The Intelligent Observation technology can distinguish between the two.
Freedman said the electronic system is low cost.
“Because of the proprietary technology that we’ve developed it is roughly the same cost to use our system as it is to visually observe their staff currently,” he said.
The company just completed its first commercial version of the product and it’s been accepted by two hospitals — the pediatric intensive care unit at Johns Hopkins Children’s Center in Baltimore, Maryland and Parkridge Medical Center, an HCA hospital in Chattanooga, Tennessee. Earlier versions were validated during tests at a number of healthcare facilities, including hospitals in Florida.
The growth potential is enormous. There are 6,000 hospitals in the United States, each one required to monitor and report hand hygiene compliance. “Allowing them to do that more effectively at the price point they are spending now is a great market opportunity,” Freedman said.
While he’s focusing the core business on the U.S. for now, he’s also interested in talking to hospitals in Europe.
The outside investment will be used to build the team at Intelligent Observation, including hiring technical expertise that previously has been outsourced. It also will be used to purchase hardware.
Seedfunders invested $125,000. Intelligent Observation is Seedfunders’ 12th investment and 10th portfolio company.
Seedfunders’ due diligence team has significant experience in the healthcare field. “They are convinced that this solves a real problem,” said David Chitester, CEO.
Seedfunders also liked that Intelligent Observation participated in Dreamit’s accelerator program in the spring 2019 cohort.
“Hospital acquired infections are devastating and costly. Proper hand hygiene is the most effective solution, yet nationwide adherence rates are poor, averaging less than 50 percent,”said Adam Dakin, managing dirctor, Dreamit HealthTech. “We believe that Intelligent Observation’s platform, which provides real-time individual alerts, is simple to deploy, and is very cost effective, will address this large and compelling need. The company received an overwhelmingly favorable response from Dreamit’s network of enterprise health systems. We are delighted to be an investor in the company.”
Editor’s note: St. Pete Catalyst Publisher Joe Hamilton is a partner in Seedfunders.