Thirty years ago, I was recruited to Silicon Valley in the early days of the PC revolution – a heady experience. Now I am getting the chance to be in on the ground floor of what many expect will be an even bigger revolution: How technology innovation can help save the $2.6 billion healthcare industry from bankruptcy.  Medical device serial entrepreneur Sonny Vu asked me last year to co-found Misfit Wearables with him, and we expect to turn the American healthcare delivery and payment system on its ear.

Here’s our thesis: We must have a way to monitor human vital signs in real time if outcome-based healthcare is ever to replace the current healthcare payment system, which is based on medical procedure reimbursements. Fees for procedures are clearly outmoded – this system invites unnecessary, often inordinately expensive medical services that do little to solve a patient’s problem. Without accurate metric-based systems to measure patients’ health, we can’t predict strokes in high-risk patients or create behavioral change in patients who are at risk because of, for example, obesity, poor exercise and balance, heart disease, or sleep APNEA.

Here’s the exciting breakthrough: A new, more accurate generation of wireless medical sensors that, when connected to highly efficient cloud computers able to provide Big Data unstructured analytics, have the potential to reduce Medical Loss Ratio significantly. MLR is the key metric to patient care cost reduction. Simply explained, MLR focuses on the 5% of the population who make up 50% of the healthcare spend. When they are discharged from a hospital, these chronic care patients are often readmitted several times within 60 days after discharge. It’s a well-documented trend that will bankrupt our healthcare system unless we can break the cycle.

Sonny Vu believes accurate patient data collection will be an order of magnitude more useful if we can monitor real time, all the time. The scale of data storage and computer power needed would have been unimaginable just a few years ago, before the advent of cloud computing.

Several weeks ago, Sonny and I spent time together in Vietnam recruiting some extraordinarily gifted Big Data mathematicians.  These are PhD, top-of-their-class experts who have trained at the world’s best technical universities and then decided to return to Vietnam. Sonny’s team of new recruits is pretty amazing, and the word is out across Vietnam that joining Sonny’s company is a cool place to work. We continued from there to Taiwan, where we interviewed hardware electronic manufacturing companies to help us build our wireless sensor medical products.

Until sometime next year, we are keeping under wraps the details of Misfit Wearables technology and how it will work. But you can be sure of this: the prognosis is mind-blowing!