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The cost of healthcare in America is skyrocketing, and patients are not the only ones feeling the impact. Hospitals also feel the rising healthcare costs, and today are being held to higher billing standards—but for those who fall behind, they are often met with costly penalties. 

Dr. Xiaoxu Kang is the Founder & CEO of Kangaroo Health, a San Francisco Founder Institute portfolio company that uses A.I. and TeleHealth solutions to reduce costs for healthcare institutions, while also bringing necessary post-surgery care directly into patients’ homes.

According to the Agency for Healthcare Research and Quality (AHRQ), readmissions are one of the costliest line items that hospitals treat ($41.3 billion annually), where patients are readmitted within 30 days of discharge. In the US, 3.3 million adults are readmitted each year. The same report concludes that for patients who are privately insured, the third-most-common reason for adult readmission within 30 days are due to complications of surgical or medical care. These issues contribute to more than $785 million in annual costs to hospitals. And of $26 billion in costs contributed by Medicare beneficiaries, $17 billion of that is associated with avoidable readmission costs.

Not only are there the direct costs to hospitals, but they also expect and depend on reimbursements for Medicare related payments—but when hospitals do not meet their readmission rates, they are penalized. Specifically, the Hospital Readmissions Reduction Program (HRRP) will reduce reimbursements for 2,573 hospitals for fiscal year 2018, in total withholding $564 million. In a time where hospitals are seeking ways to reduce their readmission rates, Kangaroo Health’s offering is an ideal solution. According to Founder & CEO Dr. Kang,

Our value proposition is two-fold. One, we cut your post-surgical care cost by more than 50%. Instead of sending patients to senior care centers or PT clinics, they can stay at home and receive our system’s active coaching and link for your nursing team to do the remote monitoring.

This is achieved through a subscription service covered by the hospital, which in turn allows patients to work through their physical therapy sessions in their own home. It’s an advanced form of TeleHealth, which typically only covers basic primary care needs. Dr. King continues,

The second [part of the value proposition] is reducing readmissions. When patients have non-compliance, we can actually see that. When they perform poorly, we can report that, so doctors know to intervene early to reduce readmissions. Each readmission costs $17,000, so that’s how we save money for them.

Not only is Kangaroo Health tackling a very real challenge for the healthcare industry, but the company is already showing significant success. To date, the company has raised $500,000 in their seed round, and has been expanding their team. Kangaroo Halth’s solution is already increasing the communication between patients and medical professionals; while time spent by nursing staff on pursuing patient follow-ups is being reduced; and hospitals are saving money from reduced readmission costs. 

Motivating factors for launching the startup include awareness of the needs of our aging population, and increasing the accessibility of treatment. Dr. Kang explains,

In 2011, my grandmother had a stroke and was released back to home only four days after her resuscitation. She did not have any medical help in her physical rehabilitation, and my parents did not know what to do to help her. I was mad and sad at the fact that there was no post-acute care for my grandmother. So I decided to take care of things with my own hands by developing a system to help her and tens of millions of people like her.

From this deeply personal experience, the inspiration for Kangaroo Health was born, with a focus on advancing TeleHealth solutions through scalable machine learning technologies. And today, Dr. Kang has developed a telemedicine solution that provides equivalent at-home treatment for certain in-person physical therapy sessions.

I think this is an exciting turning point for healthcare, as both healthcare providers and payers are pressed to adopt new technologies driven by shifting market trends.

 

 

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Graduates of the Founder Institute are creating some of the world's fastest growing startups, having raised over $800M in funding, and building products people love across over 180 cities worldwide.

See the most recent news from our Grads at FI.co/news, or learn more about their stories at FI.co/journey


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