iRhythm: Reinventing Arrhythmia Monitoring

By challenging previous assumptions about arrhythmia monitoring, iRhythm believes it's developed a device that improves the diagnostic efficiency and ultimately the economics of arrhythmia care.

by Mary Stuart

With the advent of new treatments for arrhythmias, it is becoming increasingly important, from both a clinical standpoint and from the perspective of device companies offering therapeutic options, to diagnose this condition.

Current monitoring systems for diagnosing arrhythmias are cumbersome, result in an inefficient use of health care resources, are subject to inaccuracy due to lack of patient compliance, and fail to reach many patients who need them.

iRhythm rethought the problem, challenging assumptions about the form factor of traditional devices, the ideal length of testing, and how data are delivered to clinicians.

As the company solved each piece of the puzzle, it kept in mind one important goal: increasing the diagnostic efficiency of arrhythmia testing. iRhythm's device is not for every patient, but for the bulk of patients, company executives believe it will be better than conventional testing methods.

There has been a tendency in the health care products industries to design products that serve the maximum number of patients, in order to create the biggest markets. In pursuit of that all inclusive goal, medical device companies have often overengineered products, adding features – and costs – not necessary for the majority of patients. This has been the case in the field of arrhythmia monitoring, where over time, testing evolved from the gold standard Holter monitor, a wearable ECG (electrocardiogram) device that can store two days' worth of heart tracings, to mobile cardiac outpatient telemetry (MCOT), wireless systems able to monitor patients for several weeks at a time, and using cellular technology, to alert, in near-real time, patients and caregivers about abnormal heart rhythms.

While MCOT offers useful enhancements that are invaluable for certain patients with a high risk of lethal arrhythmias, the additional features come at a cost that's at least five times that of the older stand-alone Holter monitor, and for the vast majority of patients, real-time alerting is not necessary. More to the point, the addition of functionality to the high-end product doesn't actually solve the greatest problems hindering the diagnosis of patients with arrhythmia. At the heart of the inefficiencies in the field is the design of current monitors, which are cumbersome to apply at the point of care (for example, physicians' offices, clinics and emergency departments) and difficult for patients to use. Hurdles at the point of care often mean that patients aren't tested, or at least not as early in the process as they should be. An awkward patient interface creates issues with patient compliance and therefore diagnostic accuracy.

Founded by a cardiac electrophysiologist, iRhythm Technologies Inc. has developed a new diagnostic device for cardiac arrhythmias that solves these problems and more. With the twin goals of increasing diagnostic efficiency and improving the economics of testing, the company's founders questioned every assumption underlying today's arrhythmia testing modalities: the referral patterns, the optimal testing interval, and the method of delivering data to specialists and reporting results, among other things. The result was the Zio Patch, a simple single-use patch that sticks on a patient's chest.

iRhythm has entered into the arrhythmia market with fortuitous timing. It is selling a diagnostic at a time when VCs are returning to diagnostics as a potential solution to the problem of cost-containment and using health care resources appropriately. In particular, there is a heightened recognition of the need for diagnosing arrhythmias because of the risk of stroke that goes hand-in-hand with certain types of arrhythmias, and the toll that stroke takes on health care systems. Recently, too, improvements in therapies for certain types of arrhythmias like atrial fibrillation make it even more important to diagnose patients as soon as possible so they can get a timely intervention. Finally, improvements in other areas of medicine are also creating a need to monitor patients immediately following some cardiac procedures and surgeries. The founders of iRhythm believe the company is offering a solution to the cost inefficiencies that today dog arrhythmia care all along the care continuum, and it just happens to do so in the era of Obamacare, comparative effectiveness, accountable care, or, by any other name, a focus on cost-effectiveness on a system-wide level.

Biodesign Baby

There is already an established paradigm for the ambulatory monitoring of patients suspected to have arrhythmias, but iRhythm threw out all preconceived notions and took a blank-slate approach to the problem, specifically listing efficiency of diagnosis as the goal around which to innovate. Founder Uday Kumar, MD, calls this process "value-driven engineering." Today, the company provides a low-cost arrhythmia monitor with a brand-new form factor: its product is a single-use patch (the company doesn't use the term "disposable", because it recycles components of its device), whereas current monitors are reusable; iRhythm's device is leadless, compared with conventional monitors, which require physicians and patients to carefully place multiple leads (as required by 24-hour Holter monitoring); and it offers almost 14 times as much data as Holter monitors.

While developing algorithms to enable its new heart monitor to digest this much data, the company also sought to increase diagnostic yield. In the end, iRhythm believes it offers a superior clinical outcome versus conventional tests, and with a single test, helps multiple physicians along the care continuum make treatment decisions. Finally, because the single-use device can be stocked and easily employed at the point of care, the company hopes to make it easier to diagnose a patient upon the first presentation of symptoms, and to reach the patients who should be tested for arrhythmias but who currently fall through the cracks.

iRhythm came about in 2006 when Kumar was a fellow in the Stanford University Biodesign program. Stanford Biodesign brings together multi-disciplinary groups – clinicians, engineers, businesspeople – in a systematic approach to medical device development, from the process of defining needs to invention and finally implementation. ( See "The Device Industry's Training Ground," START-UP , June 2007 (Also see "The Device Industry's Training Ground" - Medtech Insight, 1 Jun, 2007.).) President and CEO Bill Willis notes that in such an environment the company was able to set off on its path without any baggage. "We weren't a commercial entity driven to incremental improvements on an existing product to increase market share," he says.

Kumar explains that the Biodesign program looks at unmet needs and problems to solve, rather than focusing on improving specific technologies. The "needs finding" phase of the invention process is best accomplished, says Kumar, "not necessarily by asking doctors or patients what they want, but by observing what they do and examining the outcomes to discover the gaps and opportunities for improvement."

As an electrophysiologist, it was natural for Kumar to look at the problem of arrhythmia care. The current approach to diagnosing arrhythmias has several limitations, most notably the fact that patients frequently don't get diagnosed upon their first contact with a physician, and as a consequence, they don't get treated as soon as they should. This lack of efficiency also has cost implications if a patient ends up returning to the physician's office for the same problem, presents at the emergency department, or, on the flip side, gets sent on to an electrophysiologist when in fact his symptoms are not of cardiac origin.

These current unmet needs in arrhythmia monitoring presented the Biodesign team with a potential target for innovation. In addition, the demographic shift to an aging population has caused the prevalence of arrhythmias, particularly the type known as atrial fibrillation, to increase. ( See Exhibit 1.) For example, 9% of people over the age of 80 suffer from atrial fibrillation. Also, a number of effective therapies have been developed in recent years, so an arrhythmia diagnosis is now a piece of actionable information. Says Kumar, "A diagnosis of arrhythmia is not just nice to know, it has a clear impact on the health of the patient and on the health care system as a whole. If, as a physician, I know that you have an arrhythmia that can lead to stroke or sudden death, I can treat you with medications, devices, or procedures."

There also now exists a need for a cost-effective test that can serve as a useful tool to check a patient's health after a cardiac ablation or other therapy. Finally, says Kumar, until recently, there simply hadn't been much improvement in many years in the devices or delivery models, which would be needed to tackle the large patient populations coming down the pike, thereby enhancing the potential opportunity in this market.

Before the Zio Patch, conventional arrhythmia monitoring systems fell into three categories, each with its respective merits and disadvantages. ( See Exhibit 2.) The first category includes Holter monitors, which are worn by the patient generally for 24 or 48 hours, recording every beat of the heart during that time. Obviously, these can only diagnose arrhythmias if they happen during the monitoring period, and many don't, so a negative test result doesn't necessarily rule out arrhythmia. Electrophysiologists like Holter monitors, however, because they record every heart beat, and can reveal useful arrhythmia patterns.

To catch arrhythmias that are intermittent and infrequent, event monitors that could be worn for up to 30 days were developed. These don't record every heart beat but rather save minute-plus loops of heart rhythm recordings. Patients can press a button when they feel symptoms to record arrhythmic episodes (some autotrigger devices can automatically capture symptomatic episodes), so they're good for correlating symptoms with heart rhythms.

A third category, mobile cardiac outpatient telemetry or MCOT was developed to address shortcomings of the other two modalities. MCOT monitors record every heartbeat for up to 21 days and continually transmit data using cellular technology to monitoring centers that can quickly alert patients and physicians.

Kumar points out that all of these monitoring systems share a business model based on reusable equipment, and all, for the most part, are relegated to the realm of the EP or cardiology specialist. These two factors alone hinder the diagnosis of many patients with arrhythmias, says Kumar. Because arrhythmias can be transient and intermittent, the physicians at the point of care may not find anything wrong and may send the patient home, or they may be distracted by other health issues affecting the patient. "Arrhythmia may be further down on the list of things that the ER or general physician is concerned about," says Kumar, and as a consequence, many patients with arrhythmias are not diagnosed and thus aren't referred to specialists for care. Such patients may leave without getting diagnosed, have a recurrence of symptoms and return later, using health care resources a second time for the original, undiagnosed problem. According to Willis, for lack of a proper diagnosis, some patients go back and forth between physicians and the emergency department for as long as 18 months, racking up costs for duplicative, but inconclusive, visits.

Designing For The Needs Of Different Care Settings

It's not a new idea that patients with arrhythmia symptoms should be tested upon first presentation to a physician. According to Kumar, the question for the Biodesign team became, "How could we address a group of people going to primary care doctors in a way that makes sense in those settings?" That was the background for a brainstorming session the result of which was the idea of a single-use device that could one day be readily deployed in a variety of settings, including primary care, the ER, cardiology, and the electrophysiology labs, both for initial diagnosis and for follow-up after ablation procedures and other therapies to make sure that arrhythmias have been minimized.

The Biodesign exercise resulted in the formation of company; in 2006, Kumar founded iRhythm to develop an arrhythmia monitor in a patch. Mohr Davidow Ventures, Synergy Life Science Partners, and others participated in the Series A round, which, in two tranches, brought in $12.7 million in early 2007 and 2008, and an additional $6.5 million in 2009.[See Deal] Kumar's first item of business was to find someone with experience to lead the company since he didn't have any business background and wanted to focus on the clinical side of developing this new technology. Through a mutual friend, Kumar became acquainted with Bill Willis, who had previously held executive positions at the top two mobile cardiac outpatient telemetry companies, LifeWatch Corp. (which became a subsidiary of LifeWatch AG) and BioTelemetry Inc. Willis helped build LifeWatch but left after its acquisition by the larger company to found iCardia Healthcare Corp. In January 2007, Willis joined iRhythm as president and CEO. .

Indeed, Willis came to iRhythm with a similar vision about improving the ease of arrhythmia testing. He had founded iCardia to develop the first single-use disposable for arrhythmia monitoring in the US. Willis notes that he was encouraged by the initial market reaction to the Single-Use Patient Event Recorder ( SUPER) introduced by iCardia, and saw an opportunity to go beyond that product at iRhythm, which had taken that single-use concept, "a whole step forward." In December 2008, iRhythm acquired iCardia for its proprietary software, its monitoring center and its corps of certified cardiac technicians.

The Trouble With Reusable Devices

The iRhythm team realized that the reusable model of Holter monitors, event recorders and MCOT systems did not suit the emergency department or other outposts beyond cardiology where patients might first present, because of logistic issues. Kumar explains that physician practices dispensing reusable devices need to be prepared to operate small service businesses that clean, test, inventory and track equipment as it goes out the door. Emergency departments, for example, don't operate that way. Conventional systems are also capital equipment and more expensive, Kumar points out, and therefore difficult for non-specialists to stock. "When you are a specialist, you can amortize capital equipment over lots of patients because that's your focus, that's what you do, but non-specialists can't." Because they do multiple types of testing in their offices, such specialists typically have staff, normally nurses or technicians, to handle the duties that accompany reusable devices. In contrast, non-specialists' offices don't typically do this kind of testing and don't have the ancillary staff to support a specialty product, especially because they are dealing with all types of disease states.

The second problem with the reusable model, Kumar goes on, is, at times, an inopportune lack of availability. "We have seen large institutions that have a backlog of patients because they run out of devices. A patient comes in, and her physician orders a Holter. But when she goes to the Holter lab, they say, 'I'm sorry, you'll have to wait until another patient brings her Holter back.'" Under the capital equipment model, physicians can't necessarily prepare to meet this demand by purchasing several pieces of costly capital equipment, especially if they don't have the volume to amortize those costs over large numbers of patients. The single-use model avoids these drawbacks.

Shelly Guyer, CFO of iRhythm, points out that the consistent availability of devices will help patients comply with testing recommendations. Under the conventional reusable model, she says, "If the patient goes to the Holter lab and a monitor isn't available, he or she might not come back. Patients don't get the testing that has been prescribed."

A Newcomer Questions Prevailing Assumptions

As noted, today's arrhythmia monitoring technologies run the gamut from Holter monitoring, at the least expensive end, with average costs of $100 to $200 per test and a monitoring period of up to 48 hours to, in the middle, the event monitor, which records snippets of up to 90 seconds that can be correlated with symptoms for a per-test cost of $200 to $300, to the high end, mobile telemetry, which offers 21 days of testing, and real-time reporting, which ranges from $740 to $1,500 per test. Holter monitoring, by dint of its short monitoring window, fails to catch intermittent, transient arrhythmias in a large number of patients, whereas expensive, wireless MCOT is perhaps overkill for the vast majority of patients. Zio Patch incorporates features that its developers hope will make it the appropriate choice for the majority of patients.

Kumar says the iRhythm team went through the data gleaned from the event monitoring and mobile telemetry industries to come up with an adequate testing interval for the majority of patients. Should it be one week, two weeks, or more? The company settled on up to 14 days as the optimal testing period. Capturing beat-by-beat patterns results in a large volume of data, but it can all be stored in a half-gigabyte flash memory drive in the Zio Patch. Kumar notes that putting in a larger chip to record for a longer duration would also not be a problem, but, he says, "You can probably rule in or rule out 70 to 90% of patients within the first two weeks." The 14-day testing interval was reinforced by an understanding of the need for patient compliance. Says Kumar, "One of the reasons why the diagnostic yield on event monitors and mobile telemetry is low is poor compliance. Even 14 days is a long time, especially when you have to rely on patients who may live alone and have other co-morbidities like arthritis. Having to continually remove the device [to shower, for example] reduces the effectiveness and the value proposition of using just one test to get an answer."

Willis points out that the Zio Patch may be the only true continuous recorder, noting that not only do patients remove Holters to bathe, but sometimes they take them off to sleep, because they don't like sleeping attached to a box and a bunch of wires. In contrast, the water-resistant patch is designed to stay in place for the entire monitoring period.

The issue of patient compliance is also one of the reasons why Zio Patch was designed without external leads. Zio Patch is a flat device that sticks to the chest with adhesive. Patients wearing Holter monitors have to attach between five and seven leads to the proper positions on the body; MCOT patients have to deal with three or four leads that must be changed every several days for the duration of monitoring.

Kumar notes that Holter monitors and MCOT devices have multiple leads to compensate for the noise that arises from wires that snap into electrodes. "All of those connection points and the movement of those wires create artifact," he explains. "Multiple leads simply allow a technician to be able to see an ECG in one of two or three leads when there is artifact." The nature of the Zio Patch's design, which moves with the body and doesn't use wires or snaps, allows it to produce excellent signal quality with one lead, according to Kumar.

Kumar points out that this is an example of how the iRhythm team questioned prevailing assumptions to get to a new device design. Another such example involves the company's solution to transmitting test data. "When we went back to the blank slate, we asked, 'Why are people transmitting data wirelessly?' It turns out that for most patients, who are not high risk, you don't really need to." The company has the option to transmit data wirelessly in the future, but for today, to keep costs low and compliance high, iRhythm will take advantage of a solution that's accessible to all – the postal service. After the model of Netflix Inc., iRhythm has created a mailer so patients can simply drop the device into the nearest mailbox. According to Kumar, "From my training, I am aware that there are a lot of different types of patients, and not everyone has an iPod. Not everyone is wired. Not everyone knows how to use a USB and plug it into their computer, if they do have a computer. But most patients know where the mailbox is."

The Clinical Impact Of Convenience

The final component of the iRhythm offering is the reporting service. When the mailed device arrives at the national clinical center, its data are downloaded and are interpreted by the company's proprietary algorithms, which run on a cloud computing system. "It's ironic that we have snail mail and cloud computing sitting alongside each other as solutions, but each method handles its particular problem really well," Kumar explains. Another factor differentiating iRhythm's technology is its ability to use the entire power of its algorithm to analyze the dense load of data, whereas with other monitoring devices, much processing energy is spent to determine, on a beat-by-beat basis, what to store and what to send. But because iRhythm processes its data in the center and not in the device, Kumar notes, "We have all the data in one place, and we can look at it in many ways, using various statistical and mathematical methods that increase our sensitivity and specificity."

The company had to wrestle with how to present that density of data in ways that would be approachable for non-specialists yet complete enough to be valuable for an electrophysiologist. Thus the front page of the company's report succinctly summarizes whether the patient has an arrhythmia or not, so the front-line physician can refer the patient on to a specialist. Using that same report, the specialist can identify the nature of the arrhythmia and make treatment decisions. "All of that is there," says Kumar. "It is laid out in such a way as to make it easy for each physician on the pathway to decide what the next step is."

Kumar emphasizes that the company's design decisions were guided by the goal of accurately diagnosing most patients with the simplest and lowest-cost product. "We made the decision not to process data on board like an MCOT or autotrigger, because then you have a vast array of limitations, including power consumption," Kumar explains. "We just store our data in a static way, to memory, then take all the horsepower of cloud computing to do all of the processing online. That way we can bring forward our algorithm to process up to 14 times as much data as a Holter."

The company has compiled internal data indicating the high specificity and sensitivity of Zio Patch for different types of arrhythmias, and while Willis says he would prefer not to share it, he says, "Our data were so thorough that we went through the regulatory process with very few queries or requests for additional items for that 510(k) approval." iRhythm was thus able to efficiently navigate the regulatory process when others are increasingly finding the 510(k) process to be a stumbling block.

Expanding The Specialists' Reach

iRhythm's goal is to foster the appropriate use of medical resources by diagnosing patients as close to the occurrence of the first symptom as possible so they can get the proper treatment. Ultimately, this means getting the message out to non-specialists, but for now, the company is concentrating on getting the buy-in of cardiac arrhythmia specialists, electrophysiologists, and other cardiologists, aiming for eventual pull-through to the non-specialists.

iRhythm is doing so with the aid of a leader on the therapy side, St. Jude Medical Inc., with which iRhythm will co-promote, under St. Jude's and iRhythm's brands, the Zio Patch (and a second product, the Zio Event Card, which allows patients to mark symptoms). [See Deal] St. Jude Medical also invested in iRhythm's $10 million Series B round in 2010, along with existing investors, and again in its $15 million Series C round, in April 2011, with the two aforementioned investors plus new lead investor New Leaf Venture Partners. [See Deal] [See Deal] The deal helps iRhythm reach key opinion leaders in electrophysiology, whom the company hopes will be advocates and endorsers of the Zio Patch.

The collaboration could help St. Jude Medical reach patients who should be treated for arrhythmias but who otherwise go undiagnosed with current testing methods, sooner. Electrophysiologist Darryl Elmouchi, MD, is a high-volume user of the Zio Patch at Spectrum Health Hospital in Grand Rapids, Michigan. He says, "We have been getting diagnoses that we would never have been able to get before without invasive diagnostic procedures. What's more, we are now discovering that a lot of people who the medical community would have blown off 10 to 15 years ago have conditions that are bothersome or potentially dangerous. Now we have a way to discover these."

The early reports on the Zio Patch appear promising. iRhythm launched Zio patch in early 2011, in partnership with St. Jude Medical, and according to Shelly Guyer, the company has enjoyed, on average, "double-digit monthly growth since formally launching the Zio Patch." Says Elmouchi, the patch devices "have revolutionized what we do. Clinically, they have been phenomenal, and costwise, they're a fraction of the cost of the competing monitoring technology, which is inferior." Joshua Green, general partner at Mohr Davidow Ventures, an iRhythm investor, attended the Heart Rhythm Society Heart Rhythm 2011 meeting in San Francisco in May and asked around about Zio Patch. "In all my 20 plus years of being around medical device companies, I have never seen a product with greater native demand by the health care community. Everyone gets it. Everyone says it's time to replace the Holter and the need for multiple tests."

Elmouchi believes there is a compelling need to diagnose more people who have arrhythmias, because "today there are many more sophisticated ways of treating arrhythmias than ever before, particularly by way of catheter ablation." But he points out, "Until you make a diagnosis, you have no way of knowing if a patient can benefit from the treatment." Elmouchi notes that his practice increasingly uses Zio Patch just to follow-up on people six and 12 months after ablation procedures to make sure they've adequately addressed atrial fibrillation. There are still high-risk cases for which he would turn to a MCOT product from a company like CardioNet. However, he notes, "Since we got the Zio Patch monitor, our use of MCOT is down 87%."

iRhythm has a great deal of opportunity before it; the company has the chance not only to take a big slice of an existing market, but also to expand the market by reaching more patients than ever before. iRhythm's challenges for the near future include reimbursement; the company declines to discuss its reimbursement strategy, but says that it is pursuing Zio Patch reimbursement through the recently issued Category III CPT codes (for emerging technologies) that become effective January 2012. The company also faces execution challenges in scaling up a business that offers both single-use devices and a service component to meet demand. If it does so successfully, it will have validated a new platform that bridges patients in the community, primary care medicine, and specialists with a model that might be applied to the diagnosis of other important diseases.