Within the elder care market, Alzheimer's disease and other forms of dementia are a problem squared. The vast majority of the 5.5 million Americans suffering from dementia are over 65. And since most live at home, their unpaid caretakers--typically spouses--often are aging as well, their health eroded by long hours and stress. With the number of dementia cases expected to triple by 2050, the demand to improve the lives and health of both patients and their loved ones is immense.
Ceresti Health, a 10-employee startup based in Carlsbad, California, aims to boost caregivers' confidence and skills through digital education, monitoring tools, and human support. The business focuses on dementia patients also living with chronic conditions. (More than a third of dementia patients have coronary artery disease or diabetes, for example, according to the Alzheimer's Association.) That's where medical costs are highest. It is also where caregivers with no nursing experience face the gravest challenges, because they are managing the health of people who are unable to express their symptoms.
Ceresti is the second act of Dirk Soenksen, whose first company, Aperio, created digital slides used by pathologists to view tissue samples. Soenksen, an engineer by training, raised more than $50 million for Aperio and sold it for an undisclosed sum to Leica Biosystems in 2012. He stayed on for six months to oversee the transition and, in his free time, mulled his next move in the shadow of a long-term noncompete agreement.
On the day Soenksen left Leica, a former colleague invited him for coffee. Kevin Liang, a neuroscientist, explained to Soenksen that the brain is key to health, and so diseases that attack the brain offer a promising target for business and scientific innovators. He also described his own experience growing up with grandparents who suffered from dementia. Soenksen was persuaded. Together with Mark Wrenn, another Aperio veteran, they raised $4 million from friends and family to start Ceresti in 2013.
Initially, the founders took the obvious route: Treat the patient. They developed digital versions of cognitive therapies for delivery over tablets and tested them in a memory-care facility. The products worked so well that Soenksen filed for a patent. Then they tested the product in homes, where more than 80 percent of dementia patients live.
Outside a professional setting, the founders encountered family members who were overwhelmed and unprepared. "We observed caregivers getting into an argument with the patient because the patient could not remember their name," says Soenksen. "We thought, this is not going to work if we cannot make the caregiver part of the solution."
The company's practical pivot toward caregivers accompanied an economics-driven pivot toward dementia patients with chronic conditions. The founders planned to sell to Medicare Advantage health plans and at-risk medical providers, which meant they had to reduce costs as well as improve care. A study of insurance claims revealed that Alzheimer's alone is not all that expensive, because there are few medications or tests. But costs mount fast for patients who also suffer from diabetes, cancer, or heart disease, or who are recovering from surgery.
"If you have dementia, you can't articulate your symptoms," Soenksen says. "You cannot follow a care plan. Something will happen, and events go out of control." Patients with chronic conditions are 20 percent more likely to be readmitted to the hospital if they also have dementia, according to medical journal studies. They have three times as many transfers among care facilities after leaving the hospital and experience far more falls and urinary tract infections, a huge medical cost.
A tailored program.
Ceresti offers a 12-week program of videos, tutorials, and other tools delivered via a tablet. The interface is stripped down and intuitive. It's designed, says Soenksen, for a caretaker "who could be 85 years old and has never used a smartphone." In addition to the curriculum, which is served up in weekly chunks, the program asks simple daily questions about the physical and psychological status of both patient and caretaker. Users respond via a basic messaging feature.
Caregivers click a button to initiate daily calls with their dedicated coaches, full-time Ceresti employees who typically have worked in assisted living or retirement communities. "When we have made more progress, we will build a Ceresti Academy to train them," says Soenksen. "The most challenging area and where we will carve out the most IP is the ability to scale this coaching piece."
Some of the educational material applies to all dementia sufferers--for example, how to approach a patient displaying unexpected behavior such as brushing her teeth with a hairbrush. Other parts are customized for each patient based on her physician's prescribed regimen. Ceresti also tailors the program according to caregivers' individual strengths and preferences.
Ceresti's toughest challenge is the classic "chicken and egg situation," says Soenksen. The company needs early adopters to prove it works and provide the empirical evidence customers in this industry require. "If I walk in to a payer and say, 'Look, I can save you $5 million a year and I can even guarantee it,' then you will do business with me," he says. "If I walk in and say, 'I have got some data that suggests that you can save money,' not everyone is going to give it a shot." Ceresti charges roughly $750 per patient per year and expects to reduce costs by twice that amount.
Ceresti's first pilot is with Landmark Health, a home-based medical care provider that will soon be operating in 10 states. The trial has gone so well that Landmark plans to roll Ceresti's product out to potentially thousands of patients, according to Landmark's chief behavioral health officer, Christopher Dennis.
"They brought an elegant tech solution to the table, which led to greater efficiency and ability to disseminate support across multiple caregivers," Dennis says. "The caregivers have become more aware of the impact of what they do, and they've become better caregivers. For this medically complex population, it's another arrow in the quiver."
Payment from Landmark is Ceresti's first revenue; additional pilots are in the works. Soenksen believes the results will support the company's A round six to eight months down the road. "Who the heck else can reach a senior with multiple chronic conditions who can't self-manage?" asks Soenksen. "Anybody who takes responsibility for health care costs should find us super interesting."