Minnesota has the institutions and the talent to transform healthcare in the U.S. The question is whether the money will follow.RxFunction makes wearable devices called “Walkasins” that help people with chronic health conditions prevent falls that can lead to serious injury. It took eight painstaking years, though, before the Eden Prairie, Minn.-based startup secured the $7.5 million in Series A funding it needed to prepare for the commercialization of its product: Shoe inserts that measure users’ foot pressure and enable immediate sensory cues to control balance.
Lars Oddsson, RxFunction’s president and co-founder, suspects it took so long because a wearable device that acted as a sensory prosthesis was unusual for the Minnesota market. The company eventually brought in Tom Morizio, a former Medtronic executive, as CEO; Oddsson credits Morizio with figuring out how to package data and stories from patients and clinicians into a compelling story for prospective investors.
RxFunction is just one example of how Minnesota’s large medical device community is innovating in the digital healthcare space. But it also illustrates the challenges of transforming a medical device hub that has predominantly focused on traditional medical devices like pacemakers and heart valves into one that embraces and fosters new types of cutting-edge startups.
“I think the traditional Midwest medical device investor is so used to the traditional medical technology to come out of here,” Oddsson told Medical Design & Outsourcing in reflecting on RxFunction’s long journey. “It’s cardio. It’s some orthopedics. It’s mostly implants. We’re a wearable device. We’re a sensory prosthesis. It’s unusual. It’s new.”
Minnesota will likely need to see more companies such as RxFunction raising money and doing it faster if it is to adapt and prosper in the new age of digital health. Both public and private insurers are moving away from fee-for-service and focusing on how hospitals and clinics manage the health of the populations they serve. That will require a change in how both medical device companies approach innovation – and will require creating an environment in which investors are willing and eager to fund it.