Investing in Good Karma - Investing in Obesity Treatment Companies

Feel good about doing good. Your cause, your way. We believe that investing in a healthier planet leads to healthier communities...
US spends $150 Billion on obesity and obesity related problems. Companies working on innovation in obesity treatment need investment. Philanthropist organizations and families have the  to invest in the obesity technology companies, opportunity to invest in obesity related technologies and feel good about doing good.
One such company is Onciomed, Inc.
Onciomed, name is derived from the unit of weight Ounce.
 info@onciomed.com

Health Care Bubble & Cost of Obesity: Why invest in Health Care Technologies?

Dot com bubble. Real estate bubble. Commodities bubble. Healthcare bubble? How can the US healthcare system be a bubble when tens of millions are uninsured and more people fall through the cracks daily? The media, public, and politicians alike have been more concerned with the inadequacies of the system than with its rapid growth. US healthcare spending has grown enormously, exceeding the rate of inflation for decades to become the largest sector of the US economy. The United States now spends over 16% of its GDP on healthcare, almost double the average for developed nations.

Perhaps Americans just demand the best and priciest healthcare, with the most modern technology and treatments. If Americans paid for healthcare themselves, this would simply represent a rational spending choice. But the federal government now incurs 60% of all healthcare spending, meaning that taxpayers, and not individuals, pay for most of our healthcare. Medicare, Medicaid, and other direct government healthcare accounts for 46% of healthcare spending, while tax breaks on healthcare subsidize another 10-15% of healthcare spending [1].
At current growth rates, government healthcare spending will exceed the entire Federal budget by 2050 [2]. Total spending on healthcare will near one-third of GDP by 2030. It’s unlikely that the US can devote 1/3rd of all productive capacity to healthcare without crippling other sectors of the economy and reducing overall economic growth. The healthcare bubble thus dwarfs all previous bubbles in size, since the technology, real estate, and energy sectors are all so much smaller.

How will the bubble pop, and what will its effects be? Since most healthcare spending is federal, the bubble will pop when the government can no longer afford its healthcare outlays. The US has been able to borrow freely by issuing debt for many decades, but this will eventually end once our debt exceeds GDP. With the current downturn, government debt may actually exceed GDP by 2015 [3]. Thus the reckoning may come sooner than many expect.
Will healthcare reform contain costs and deflate the bubble gradually? Most reform plans focus more on increased coverage than on cost control, so they may exacerbate the problem. Eventually the hard choices will have to be made, and they will include some combination of reducing Medicare benefits, cutting provider reimbursements, openly rationing government health care, and limiting the tax break on health insurance. I just hope that some of the hard choices are made before we are collectively up against a fiscal wall.

[1] $200 Billion in taxes are foregone as a result of the employer-based healthcare tax deduction, equivalent to 10% of all healthcare spending. When this subsidy is included the government’s share of healthcare spending rises to 56%. This analysis does not include the exemptions on property taxes and sales taxes that healthcare providers receive; adding these subsidies in would likely drive the government’s share of health care spending over 60%.
[2] The CBO predicts that Medicare and Medicaid will account for 14% of GDP by 2050. This figure doesn’t include healthcare spending through the VA system, SCHIP program, and other federal healthcare programs, which total $100 Billion in spending today. If these programs also grow commensurately, total government spending may near 18% of GDP in 2050, roughly equivalent to total government revenue.

[3] This projection of public debt growth shows that US government debt will exceed gdp by 2050. This only takes into account debt held by the public, however. Gross government debt is already above 65% of GDP, and may grow to 75% by the end of 2010 as a result of the recession and stimulus spending. With deficits of $500B+ per year possible for several year, US total government debt could exceed gdp in less than 10 years.

China Predicted to Have Childhood Obesity Problem

Childhood obesity is ballooning into a big problem in China as 'little emperors' are increasingly getting an appetite for the Western couch-potato way of life, according to a study presented in Geneva.
Almost one in five children under seven is overweight and more than seven percent are obese, according to a study of the Chinese National Task Force on Childhood Obesity, presented at the sidelines of the annual meeting of the World Health Organization.

Chinese experts looked at 80,000 children from 11 major cities, and found an increase of 156 percent in the numbers of obese children between 1996 and 2006. Meanwhile, the number of overweight children grew 52 %.

"When a poor person gets richer, the first thing he does is to get better food. That's a big driver of obesity,"

With large swathes of population in the country still poor and many increasingly getting richer, the problem would not reach its full-blown extent until the years to come.

The adoption of Western couch-potato style of life in the cities is the problem, as parents feed their children with fat and sweet food, according to the scientist.
Children are not only consuming sodas and ice cream, but also not doing enough exercise to work off the calories.

 China “has entered the era of obesity,” according to Ji Chengye, a leading child-health researcher, who says that “the speed of growth is shocking.”
[ USA Today “Obesity of China's kids stuns officials” Jan. 9. 2007 ]

Urban Chinese boys age 6 are 2.5 inches taller and 6.6 pounds heavier on average than Chinese city boys 30 years ago, according to China’s Health Ministry. The Education Ministry reports that 8% of 10- to 12-year-olds in China’s cities are obese, with an additional 15% classified as overweight.
[ USA Today “Obesity of China's kids stuns officials” Jan. 9. 2007 ]
 
About 8.1% of Chinese children in urban areas are obese, compared to 3.1% in rural areas.
[ National Geographic News “Obesity Explosion May Weigh on China's Future” August 8, 2006 ]


China’s obesity rate is exploding—about 30 to 50 percent annually (or six million to 10 million more obese every year).
[ PBS Newshour “For China's Growing Middle Class, Expanding Waistlines Pose Problem” June 1, 2010 ]

About one in 10 adults in China have diabetes (representing about 90 million diabetics).
[ BBC News “China faces obesity explosion” Sept. 25, 2010 ]
China’s “obesity explosion” has resulted in growth of Chinese fat camps , which costs about a thousand U.S. dollars (U.S.) per child.
[ National Geographic News “Obesity Explosion May Weigh on China's Future” August 8, 2006 ]

 
Parents and school systems place academic results above sporting achievements. This is indicated in the little emphasis on sports, which takes up less than two hours of the school week.

The one-child policy which has been implemented in the last 30 years further complicates the issue in a country which considers being fat as a sign of good health and prosperity.

A healthy baby, for example, is in the Chinese language described as a "fat baby".
"The one-child policy led parents to overprotect their children. The behavior of grandparents are of special concern they tend to overfeed their grandchildren because they think that being fat is a sign of the family's wealth," one professor said. The traditional preference for boys is also reflected in the statistics, which show that 22 percent of boys and 17 percent of girls are overweight.

The professor sees about 20 young patients daily at the hospital where he practices in Beijing, but he refuses to impose a diet on them. The problem is doctors were never trained in medical school to deal with obesity, this was not a disease it was condition. Now, it has become a disease.
It has also become the most expensive and the biggest killer because it can cause other problems.

Like US. China will also spend in Billions to treat obesity. US spends close to US$147 B in treating obesity and its related problems. By the end of the decade Obesity and Diabetes will be the biggest market for medical devices. 

Private investors, VCs and companies  are investing heavily in US based new technologies, mainly located in Boston or Irvine, California that can help cure obesity using medical devices or help reduce the incidence. Sobering thought is, if diet and exercise is started today, it will take 30 years to return to the normal levels. Let's solve the problem, at the grass root level, which is curbing complex food manufacturing, cheap foods and complex carbs are easily available which means  obesity and diabetes is inevitable!
Reorganize the food chart and add proteins, veggies and less carbs to the food chart and add exercise to it!!

Obesity and Related Disease Market to Reach $500B by 2015

Private investor are jumping in to invest in Medical Device industry as it heats up for a health care boom in Asia by 2015. 

The increasing incidence of chronic diseases such as Obesity,  diabetes, cardiovascular disease, chronic wounds, immobility, pulmonary and vascular diseases is enhancing the need for patient care in hospitals, homes and other care facilities, thereby contributing to the demand for medical devices and diagnostics that are capable of enhancing the overall quality of life. The US leads the high-technology medical devices market, but faces fierce competition from emerging economies. Despite being way behind the US in terms of expertise or innovation, these countries compete on basis of production of low cost medical devices. Demand for medical devices in developing countries, especially China and India, is expected to grow at a faster rate than developed countries owing to factors such as rising disposable incomes, increase in patient population, growing waist lines, obesity on the rise and both India and China face an epidemic of diabetes and obeisty. Australia UK , US, Canada and Mexico are already declared an Obesity epidemic.

The obesity device market will be the biggest in the healthcare sector.

Asia is seeing increasing healthcare awareness, improvements in healthcare infrastructure and increase in healthcare spending . In majority of the Asian, Latin America and the Middle East countries, government efforts are focused on improving healthcare services and infrastructure facilities, which is expected to fuel the demand for medical equipment in the next 3 years.

India and china face a problem of metabolic disease. Which is a mix of hypertention, heart disease and diabetes. The smokers in the region have increased the incidence of tobacco related problems.

Coronary stent shown below is one medical device that is implanted every 20 seconds in Asia. 

There is a increased demand in consumables in the medical device sector. Implantables like the lap band will grow in Asia.

Technologies in orthopedics and spine are in great demand. Larger companies cannot compete with small and nimble manufacturers.

Spine surgery is reverting to posterior open repairs due to slower adoption of minimally invasive surgery. The outcomes show little difference between the traditional posterior fixation and minimally invasive surgery. It will take a decade for new technologies to be adopted.

Increase number of private investors are jumping into the space because the institutional investors have not raised new money to invest in early stage technologies.

 Private investors did not have this opportunity until recently.

Private and angel investors understand its a high risk high gain opportunity, accredited investors can take advantage and invest in companies in the seed stage and series A. After Series A  the institutional investors and venture capitalist jump in. Many of the private investors have potential to gain if the company exits in 4-5 years, which can be by virtue of M&A or IPO.

Diabetes Facts

Diabetes affects the body's ability to use blood sugar for energy. The main types include type 1 diabetes, type 2 diabetes, and gestational diabetes. Diabetes insipidus, a rare disorder, is not related to diabetes mellitus (sugar diabetes). Diabetes symptoms may include increased thirst and urination, blurred vision, and fatigue.

Weekly Shot Gets FDA Nod for Type 2 Diabetes
The FDA has given its nod to Bydureon, making it the first weekly treatment for type 2 diabetes, according to drug's manufacturer.
Type 2 diabetes, often called non-insulin dependent diabetes, is the most common form of diabetes, affecting 90% - 95% of the 21 million people with diabetes. In this article, you'll learn the basics about type 2 diabetes, including symptoms and causes, as well as type 2 diabetes in children.

What Is Type 2 Diabetes?

Unlike people with type 1 diabetes, people with type 2 diabetes produce insulin; however, either their pancreas does not produce enough insulin or the body cannot use the insulin adequately. This is called insulin resistance. When there isn't enough insulin or the insulin is not used as it should be, glucose (sugar) can't get into the body's cells. When glucose builds up in the blood instead of going into cells, the body's cells are not able to function properly.

The Cost of Obesity and Diabetes in the United States

• The medical costs of obesity were as high as $147 billion in 2008.

• The medical costs of diabetes were $116 billion in 2007.

U.S. Rates of Obesity and Diabetes

Facts about County-Level Estimates of Diagnosed Diabetes and Obesity, 2007

Findings

For the first time ever, estimates of obesity are available for all 3,141 counties or small areas such as boroughs and townships in the United States. The diabetes estimates are updated with 2007 data. To see county-level estimates of obesity and diagnosed diabetes, visit http://www.cdc.gov/diabetes/statistics/.

• The proportion of U.S. adults who are obese was 26.1% in 2008.
• In 2007, nearly 8% of the population, or about 24 million people, had diabetes. Of these, 5.7 million were undiagnosed.
• County-level estimates of age-adjusted rates of diagnosed diabetes range from 3.7% to 15.3 % in the United States.
• County-level estimates of age-adjusted rates of obesity range from 12.4% to 43.7% in the United States.
• Among the counties on the high end and low end of estimated diagnosed diabetes and obesity rates are—

Diabetes—High end Greene County, Alabama Holmes County, Mississippi Jefferson County, Mississippi Lowndes County, Alabama Perry County, Alabama

Diabetes—Low end Boulder County, Colorado Gallatin County, Montana Los Alamos County, New Mexico Santa Fe County, New Mexico Summit County, Utah

 

Obesity—High end Dallas County, Alabama Greene County, Alabama Holmes County, Mississippi Humphreys County, Mississippi Jefferson County, Mississippi

Obesity—Low end Boulder County, Colorado Routt County, Colorado Santa Fe County, New Mexico Summit County, Colorado Summit County, Utah

Source: CDC 

GI Dynamics, Allergan's lap band, J&J's Realize band, Onciomed, Baranova , Reshape Medical and Valentx are some of the next generation technology companies that can help reduce the impact of obesity and diabetes. 

Obesity is going to be the biggest market in the medical device space.

Obesity Treatments Using Surgical Methods Can Help Curb Billions in HealthCare Cost in the US.

Treating people with chronic diseases accounts for a disproportionate share of America’s health care dollar—as much as 75 percent of the spending. As treatment guidelines for high blood pressure, high cholesterol and high blood sugar are lowered, more patients are receiving care than ever before. The rising prevalence of obesity in America is also contributing to increased health care spending. As America’s waistline expands, health care costs for obesity-related illnesses and disease also increase, and the problem is getting worse. Over the past quarter century, adult obesity has doubled in the United States, and childhood obesity has tripled. The Centers for Disease Control and Prevention (CDC) as well as the National Business Group on Health reported in 2007 that more than a third of US adults—more than 72 million people—were obese (BMI > 30). 

Diet and exercise do not work and the physician community does not know how to deal with patients with obesity. The HMO doctor has 15 min to spend with the patient. As a result nothing is suggested except “watch your diet” `. The real answer to this problem is in medical device technology. Companies like: Allegan’s lab band, GI Dynamics, Onciomed,  J&J s, Satiety, Baranova, Reshape medical are some of the most important technologies of the decade.

According to Mr Hank Plain of Morganthaler ventures. There are 70 Million people who are obese, of which 14 Mil  people are qualified by the insurers to get treatment for morbid obesity, they need to lose 50Lb or more because they have one or more co-morbidities like heart disease,  or hypertension, spine or orthopedic conditions.

If you look at the 14 mil people and provide them with a surgical option with a medical device, and if the cost of the medical device is $8000-$10,000. it translates into a $120Billion + market in the US alone. It is not about just the treatment of the patients who are obese but the direction it is going. Worldwide, the market for surgical treatments is growing. There are few bariatric surgeons and way more patients. In the next 5 years obesity will become the biggest medical device market in the history of medical technology.

This is the time for investors, entrepreneurs and policy makers to come together and provide resources to technology companies creating treatment options for obesity.

US, UK, Australia have prevalence of obesity in epidemic proportions.

Countries like Mexico, Canada, Germany, Italy, Venezuela, Brazil, and Chile are reporting obesity as one of the biggest threats to their health care system.

India and China have Type 2 Diabetes in epidemic proportions. India and China’s metro cities or urban cities are seeing obesity growing at a rate of 14% every year. China’s one child policy has created a generation of kids that are pampered and obese.

This generation of kids is going to be obese in epidemic proportions by the time they are in their twenties. For the first time in the history, this generation of kids will not outlive their parents.