86 – How VR & AR Are Changing Medicine Forever! w/ Walter Greenleaf

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[00:00:17] Vic: Okay. Welcome everyone to Health Further. We have a great guest episode today. Walter Greenleaf, who is a real expert in digital health. He does research and works with Stanford University quite a lot. But as I think you'll hear in the show, a lot of interactions with product development and industry as well.

[00:00:34] Vic: Walter, thanks for joining us. 

[00:00:36] Walter: I'm excited to be here. Looking forward to the conversation. 

[00:00:39] Vic: So you've had a long career in, in digital health and VR, AR, what you were educating me on. Um, XR, which would include all, all of the above for. Years, decades even, and I wanted to, uh, have you talk about your background and maybe, uh, how you came to be interested in this space, in the In the [00:01:00] 80s and 90s, what drew you into the XR space, particularly as far as research as it would apply to health care?

[00:01:07] Vic: How did you start getting into this? 

[00:01:09] Walter: Well, uh, in many ways it came out of being, um, impatient, or maybe lazy is another phrase. Uh, I was, um, doing research on, uh, in my lab at Stanford, uh, um, uh, psychophysiology lab, um, studying how hormones affect mood, uh, and behavior in people. And we were recording on, uh, a grass polygraph, and this is back in the eighties, um, ink on paper with how the signals that we would capture in our research, but also down the hallway at the sleep research lab.

[00:01:41] Walter: Um, and we would measure the signals with a ruler. We've measured the amplitude of the breath or the intra beat frequency for the heart rate, um, with with a ruler. And so, of course, you know, with an hour session or an 8 hour sleep study, you can't measure at all. [00:02:00] So you, you take representative samples. And I just felt that I did not have the patience to do that.

[00:02:06] Walter: And I also felt it was very inaccurate to be doing that. I wasn't very precise. So, optimistically, I taught myself a little bit of electrical interfacing. I got some help from some friends to hook up an Apple to computer to the graph polygraph. And, uh, to wrote some software assembly language program is what we needed to do the conversion to score the data.

[00:02:30] Walter: And I had a system to automatically score my data in a much more accurate way. Um, that long story is, I ended up spending out a company, uh, during grad school, uh, to, um, do automatic sleep stage scoring using, uh. That technology, um, because the guys down the hallway needed that. Um, and I learned that I was doing products more than I enjoyed publishing academic papers.

[00:02:57] Vic: How did that, um, sort of first [00:03:00] experience lead into the next thing and really trying to, uh, Delve into how you could interface between technology and human behavior, human cognition. 

[00:03:11] Walter: Well, um, meanwhile, around the same time, uh, my friends here on the deer had started the first commercial virtual reality company.

[00:03:18] Walter: And I, um, I purchased, um, the rights, the medical rights to his VR technology and started using, um, um, virtual reality technology as part of, uh, therapeutic processes. So, I got very interested in how we can help with stroke rehabilitation, um, with traumatic brain injury rehabilitation, with ergonomic assessment, et cetera, using the motion capture aspects and the, and the therapeutic potential of VR.

[00:03:47] Walter: And so that led me to getting both involved as a, as a neuroscientist, but also as a technologist trying to come up with the next generation medical products. [00:04:00] Back then, we didn't have the same infrastructure we have for digital health, but it was starting to evolve. 

[00:04:07] Vic: Yeah. And so over your career, you have been involved in maybe five or six different research centers at Stanford and 30 to 40 commercial grade products.

[00:04:20] Vic: That perspective of kind of neuroscience, technology. digital health, building commercial grade products with academic research. What do you think advantages that gives you in sort of your perspective, seeing, seeing all these different fields and how they're progressing at different rates? How does that help you?

[00:04:37] Walter: Well, I guess I know where the shipwrecks are and that helps me understand where the shallows are and where, where you can get into trouble. But I've also seen where digital health has soared and where it's made a big difference. So, um, you know, you learn, we learn from experience hopefully. And so, I've had the opportunity to work with both academic groups.

[00:04:56] Walter: They're trying to spin out a new [00:05:00] technology. I've had the opportunity to work with early stage companies. And as an entrepreneur myself, I've learned the challenges of trying to do it all at once. The sales, the marketing, the business development, regulatory approval, et cetera. But I've also had the chance to now work with some pharmaceutical companies and medical device companies and just get, get a sense as to how the ecosystem needs to have emerging technology presented to it so that it can absorb it.

[00:05:31] Walter: And that's often the gating step is that match between what the technology can do and really what the, what the capacity is to absorb that the healthcare ecosystem has. 

[00:05:41] Vic: Right. Yeah. That interaction between. What's technically possible and what do the clinicians or patient or maybe the payers, what do they need help with?

[00:05:52] Vic: What are their really problems they need solved? That interface is where I think there's really great commercial opportunity. Is that where you found? 

[00:05:59] Walter: [00:06:00] Absolutely, and that's often the part that I think gets overlooked at least at the early stage for the For the companies that are spinning up digital health products, they they see something that will have an impact that makes a difference on health care, measurable difference, and it can be validated.

[00:06:15] Walter: But that's not adequate to bring a product out. It has to fit into the clinical ecosystem. It can't add more time constraints. You know, if you need to hire someone to maintain the battery to charge the batteries and keep track of the inventory, that's very different than just saying, here's a product that will make a big difference.

[00:06:33] Walter: So, I think it's that communication between the constraints of a busy clinic and a, the economic constraints of the healthcare ecosystem and the development process that's often lost in translation. 

[00:06:48] Marcus: Walter, I realize that you are not, uh, solely focused on VR. Um, you know, you've got sort of a broad, uh, aperture when it comes to digital health, but I would like [00:07:00] to ask you a question.

[00:07:01] Marcus: You about VR because I do think in the world of VR and digital health, you're, you're probably as much of an expert as anybody is. Um, I think there's a lot of questions out there around the clinical purpose of VR, right? Uh, you know, why, why do we specifically need VR, right? We've got zoom now, we've got all these people who are doing.

[00:07:23] Marcus: Um, telehealth sessions, whether it's with a doctor or, or a therapist, um, what is it that is unique in terms of the property and the experience and the, the, the interaction that we have when we put on a VR headset? How is it unique in with the right programming, you know, and sort of the right oversight?

[00:07:43] Marcus: How can it address trauma in a way that other video modalities are unable to? 

[00:07:50] Walter: It's a very good question, and, um, one of the words that you used in asking the question was experience. And I love the phrase that my colleague Jeremy Bailenson uses [00:08:00] is experience on demand. Um, there's a difference between reading about something or watching something, um, or, uh, having a dialogue via zoom call and having an experience.

[00:08:13] Walter: And a lot of it has to do with, um, uh, interaction and not just the interaction we have verbally or visually, but also our movements. And virtual environments are dimensional, three dimensional, they're interactive, and they evoke more of a cognitive engagement. And that's the key point. So, the mechanism of action to use a phrase from pharmaceutical research, et cetera, is, is that cognitive engagement that can happen with a virtual reality experience that allows us to do more objective measurements of, uh, um, Um, cognitive and emotional state, because we're able to get more focused attention.

[00:08:52] Walter: It allows us to evoke a cognitive state or an emotion state. And if you want to measure how someone is feeling, or [00:09:00] how they're thinking, it's not enough to fill in a piece of paper or ask them. You have to evoke that state and measure that state using, um, um, all the tools we have. Um, you know, the physiological signals, psychophysiological signals, but also observational data such as voice tone, body language.

[00:09:19] Walter: So we create a context for evaluation and we create a context for engagement in therapy. And it's just much more memorable. It's much more evocative and that's much more measurable. That's the other key points is if you're in a virtual environment, you know, we're able to not only challenging you to do something and having a multi user experience, but we can also measure.

[00:09:42] Walter: How you're reacting to stimulants. Now that brings some complexity. We have to make sure that we come up with some evocative environments that are age appropriate and culturally diverse and, and, uh, not boring. There's often a lot of lame application that goes [00:10:00] on when we try and identify some of these virtual environments, but, uh, they're powerful tools.

[00:10:06] Walter: I would argue in digital health that as VR and AR technology gets more out there, it's going to be the backbone for promoting adherence. And that's what we're seeing right now is with a lot of the mobile apps that we're seeing, especially in mental health, the adherence is low, people use them for a short while and then it gets a little boring or for whatever reason they stop using them.

[00:10:26] Walter: We don't see that as much with VR environments because they're more engaging, more interactive, more, more, more experiential. And that makes a big difference. 

[00:10:40] Marcus: Walter, you said two things in your answer that kind of hit me over the head. As like duh moments because I, I don't use VR often, but I have used it.

[00:10:50] Marcus: Uh, you know, we've got an Oculus in our home and the two things that you said, and I'm someone who regularly does, um, uh, telehealth therapy sessions. [00:11:00] Um, but the two things you said was one immersive. And then to focus, uh, I'll be on a telehealth therapy session and like it's, it's become, I have a great relationship with my therapist, so this is okay.

[00:11:14] Marcus: I'll catch myself totally distracted going in emails and I'll also catch my therapist doing that too. You know, like, and it's fine because like we have this multi year long term relationship where I, I, I'm not offended by the fact that, okay, like she got a text and she feels the need to kind of check on something.

[00:11:30] Marcus: Wow. While we're talking, it's like, it's fine in the, in the multi year, uh, view of our relationship, this two minutes are, are not that big of a deal, but I, I think. When I think back to the times when I put a VR headset on one of the one of the things that is that is so different about it than any other technology is the rest of the world disappears, right?

[00:11:53] Marcus: And so, you know, it's it's you can't be distracted because you can't see anything else. The only [00:12:00] thing you can see and engage with is the thing that's coming through the headset. And I think we live in this world of so much distraction right now that any engagement with a clinician often runs the risk of some form of distraction.

[00:12:14] Marcus: And you could see how a VR headset alone. It's like a set of blinders. If nothing else, if nothing else, it does force the constraint of immersion and focus. 

[00:12:23] Walter: You're absolutely right. And there's, there's 2 other aspects of that. I want to underscore 1 is that, um, in many ways, video conferencing is, um.

[00:12:35] Walter: Exhausting and it's, um, it's annoying and in ways that, uh, we, we've had to adapt to, uh, basically staring at someone's face as a threat gesture, uh, number one, number two, when we're with other people, we're looking around the room. We're, we're repositioning ourselves. We're gazing at things off to the side.

[00:12:55] Walter: We don't stare at people. And so I think [00:13:00] there's less stress when we can meet someone around a campfire and a virtual environment to maybe walk around a bit. It would go for a walk together and talk. It's like, you know, if you want to have your talk with your children about sex, maybe doing it into the automobile while you're driving and your attention on something else.

[00:13:15] Walter: And so is there is, as opposed to looking straight at them might be a way to do it. We. The other the other point, I think, is that, um, um, some of the therapeutic things we need to do, we do need to block out the outside world. If we're trying to help someone with post traumatic stress. We're asking them to think about the most horrible thing that's ever happened to them, or the most painful thing that's ever happened to them.

[00:13:39] Walter: The brain, the brain doesn't want to go there. And, uh, so if, if I'm, if your clinician is saying, please think about that trauma. First of all, you can't do a graduated, uh, exposure because, uh, you have no control of what the person is seeing or thinking about or imagining. Second of all, our imaginations and some of us are not that good at going someplace.

[00:13:59] Walter: So, [00:14:00] But in a virtual environment, I could gradually take you back. And this is the principle of exposure therapy. In a controlled, gradual manner, measuring your psychophysiological responses, um, to, you know, maybe your fear of heights, maybe you've had a bad airplane landing, or maybe you were in combat, and your friend got killed, and you almost got killed, and now when you see a pile of trash on the side of the road, it evokes a fear response.

[00:14:26] Walter: I can, well, a clinician can gradually habituate to that learned fear response and teach you the The management tools for that to cognitive behavioral therapy perspective. I can't do that unless I can take you there. And, uh, uh, same principle for learning situational confidence for social anxiety disorder.

[00:14:46] Walter: Same principle for learning, um, um, how to handle a craving and addiction. If I, if you need to practice saying no to your friends in a bar when they're trying to get you to have another drink. [00:15:00] I need to be able to block out the outside world to take you there and teach you those skills, and VR is perfect for that.

[00:15:06] Vic: Yeah, and a lot of times it's the, it's all of the experience, it's the things that I hear, maybe if I'm afraid of crowds, it may be that, um, when I'm in that experience, I'm hearing a bunch of people around me, and there's ambient noise, and then there's, maybe it's a little warmer, or whatever, you can, you can adjust the environment through VR in a way that is, You'd have to have a really good imagination to be able to do.

[00:15:29] Vic: It's difficult for a therapist to paint that picture in the same way. 

[00:15:32] Walter: We can also give you positive feedback, you know, like you to teach your situational confidence in a crowd. Not only do I need to take you to a crowd and maybe I do it gradually with larger crowds or maybe it's public speaking. I can give you a friendly audience and then a more challenging audience as we go along.

[00:15:49] Walter: But, um, we have. The ability to adjust the experience based on your response, because meanwhile, be our headsets are a perfect place to [00:16:00] put sensors for E. G. and for E. M. G. and capture eye gaze and pupil dilation so I can see how you're responding and I can say, well, I need to back it down a little bit or I need to make it.

[00:16:11] Walter: He's ready to push on to the next level or this is in particular what is concerning him. So it's a perfect platform for both assessments. And for interventions. 

[00:16:22] Vic: So Walter, that reminds me when we spoke earlier, you have six major areas where you think VR and AR technology can be really impactful going forward.

[00:16:33] Vic: And I thought it might just be an interesting way to sort of help the audience understand where this could go to talk through the different, the six areas. Um, I think the first one was prevention. So maybe talk through that and then let's talk through the six just briefly where, where it could go. 

[00:16:48] Walter: Uh, sure.

[00:16:49] Walter: Well, um, You know, the, the, for prevention, it's really wellness. You know, we can help teach people the skills they need to [00:17:00] managing man stress to manage anxiety to deal with addictions and depression. And we can do that in a wellness context and teaching also healthy habits. Um, 1 of the powerful techniques that my.

[00:17:12] Walter: Colleagues at Samford Virtual Human Interaction Lab have done is to create an avatar of your future self. And so to have a dialogue with, we age progress you, um, we show you in the context of where you might be, um, if you're in your 20s, we can show you maybe you're in your 30s. And believe me, Stanford undergraduates seeing an age progressed future self, who's even 10 years older is a little bit, yeah.

[00:17:35] Walter: Uncomfortable, but you have a dialogue with, um, with your future self about the choices you make and then close the feedback loop. Maybe you are exercising more. Your future self looks and healthier. We can do that immediately. So you don't have to wait months to see the results of better exercise, better nutrition, better sleep.

[00:17:56] Walter: We can also have your avatar look and have talked to you [00:18:00] and not be very happy about the alcohol you're drinking because you decided to give up on that and we can even have your future self give you a phone call. If you do offense and go into a bar. So there's ways we can help with health and wellness by giving people feedback about what works for them.

[00:18:16] Walter: What doesn't work for them and what their choices and values are. So, prevention is what I would say is, is the catch all phrase. That strikes 

[00:18:24] Vic: me as much more powerful than a payer calling me, trying to get me to do something. My future self. coaching me might be much more engaging, much more likely to work.

[00:18:36] Walter: Or maybe your future girlfriend or your future wife. 

[00:18:39] Vic: I'm not sure my wife would like my future girlfriend, but it also could be using clinician training. One of the things that we wrestle with in the healthcare industry is keeping our clinicians up to speed on the latest, greatest new things. There are always new procedures, new technology coming out.

[00:18:55] Vic: And one of the use cases of, uh, XR technology is, [00:19:00] is helping clinicians. Continuously train. 

[00:19:03] Walter: Absolutely. We have amazing, uh, simulations of virtual patient encounters and you can learn to use and it's not just, um, you know, for dialogue, but also you can learn how to practice putting an line and we have great surgical skill training systems and haptic feedback systems to teach venipuncture or how to do, uh, Um, you know, getting captured of, uh, spinal fluid, uh, um, how to handle.

[00:19:32] Walter: And here's a critical thing is how to have a difficult conversation. If you need to deliver bad news to a family or to a patient about terminal illness, for example, you don't want to do that on the job and you don't want to blow it. So being into practice in a simulation, how to handle those difficult conversations is so important.

[00:19:53] Walter: So we can also team train teams. It's, it's, uh, I've seen some great VR applications where they're not [00:20:00] just turning, teaching a neurosurgeon how to, how to plan a pre surgical planning and to do an operation, but also have teams practice how to handle a complex situation, what to do if there's an emergency in the OR.

[00:20:12] Vic: Yes, and some of the education, like you'd think in aviation where they go do simulations for. bad weather or you lose an engine, we could do the same thing in medicine where it's, it's not expected, but some crisis happens. And how do you react to that? 

[00:20:25] Walter: Exactly. It might be something that, uh, you'll never encounter, but if you do, you need to be ready and you need to not have it be the first time you've done it.

[00:20:33] Walter: And to do that by reading about it doesn't really teach you the skills, but to actually be there, maybe have the complexity of the situation, maybe figure out how to do it with your colleagues, how to solve this emergency on the patient in front of you. You, you want, you want to practice that, and so we can have flight simulator, the equivalent flight simulators.

[00:20:52] Walter: And we do, we have some great pre surgical planning systems and some great, uh, uh, skill training systems for clinical care. [00:21:00] 

[00:21:00] Vic: Yeah, no, three and four were, um, better and more objective, accurate assessments, and then also, uh, improve clinician, uh, clinical innovation. So interacting with the patient, collecting information more accurately, more objectively, And then using that in interactions with, in the clinical settings.

[00:21:20] Walter: Yeah, and there's a spectrum. It can run from, um, you know, stroke rehabilitation, both acute and post acute, showing people their progress, showing them how to do the, the, the rehabilitation exercises correctly, making it fun and engaging. And, and by the way, we're, we're learning a lot from our colleagues in the movie and gambling and gaming industry about how to promote adherence because we can put a nervous story on top of these experiences.

[00:21:51] Walter: And for some people, um, what counts and what motivates them and promotes adherence is being on the leaderboard. But for others, it might be [00:22:00] collegiality, doing the exercise or doing the rehabilitation in concert with others, or for others, it might be learning, learning about yourself or learning about the, the, the medical problem that you're working on.

[00:22:12] Walter: So, the VR gives us a platform and clinicians don't have a lot of time to work with patients, but a VR platform for therapy, both physical therapy or occupational therapy, or. Behavioral therapy gives us the ability to to that layer of I don't want to see gamification. I want to say using game mechanics to promote adherence.

[00:22:36] Walter: Um, we can do that with VR technology. 

[00:22:40] Vic: Yeah, and then adherence and sort of distributed care. So, um, I guess the point I wanted to make is that VR seems like a novel technology to, to me, to a lot of, to all of our audience, and yet you've been working on it for gosh, 30 years or so. And the broad, application.

[00:22:59] Vic: It's almost [00:23:00] across the entire health care landscape. Um, and it will be a couple of years to get it integrated, but the potential is right across all health care. Would you agree with that? 

[00:23:11] Walter: Yeah, absolutely. Um, I've been doing a lot of work with, uh, the Veterans Health Administration and they're fantastic at, uh, uh, embracing and promulgating, uh, Um, and evaluating the value of new technologies in their ecosystem, and they've rolled out VR systems to address more than 30 different clinical indications, and they've trained several 1000 clinicians, and they've had a lot of patient encounters.

[00:23:36] Walter: And so I think we're gradually moving beyond the early adopter stage. For some of the VR applications, like using it for pain mitigation, you know, we have FDA approval. We have products that are out there and again, they're moving beyond just, uh, the academic medical centers and the early adopters are starting to be, this is how we do things now.

[00:23:57] Vic: Yeah. So let's dive into that, which really [00:24:00] likely will be the meat of our conversation too. As we get beyond the early adopter, uh, let's test what is possible. We need to get into regulation and reimbursement. That sort of drives. A lot in health care, and you were involved, you're the chief science, chief science officer at pair therapeutics early on in the early days, and so I wanted to sort of try to frame.

[00:24:27] Vic: We have pair and Achilles. Who really, I think, did everything the right way. You were, of course, involved early at PAIR. You knew the Achilles. I mean, you might have been involved at Achilles. Um, they went through the FDA. They did all the right things, and yet they didn't get reimbursement. And then we have a couple examples, um, more recently of companies that have achieved reimbursement.

[00:24:49] Vic: And so I want to sort of try to frame this in what have we learned from PAIR and Achilles. And you, you were in the middle of that, so let's talk through that. And then what have we seen even in the last two weeks [00:25:00] about sort of, there might be a light at the end of the tunnel. Like we're starting to see a couple of pathways where It can get through regulation and get reimbursed.

[00:25:09] Vic: But let's start with the lesson. So you were early at Payer and Achille. What, what, um, what is the takeaway from that? What should we learn from those? 

[00:25:18] Walter: Well, I think, um, appropriately so, there's a lot of inertia in medicine. And, uh, there have been a lot of false starts trying to roll out, uh, digital health applications.

[00:25:28] Walter: And, um, Corey McCann and my colleagues at PAIR did a fantastic job of bringing to the existing regulatory infrastructure, um, the, uh, establishing software as a prescription medical device, uh, SAMD, and, um, I think that broke the ice in many ways and opened up a lot of doors. I think timing, though, is everything.

[00:25:54] Walter: And I think the timing of pairs, uh, um, entry into this and, and [00:26:00] when it, uh, when the public also coincided with changes, uh, a downturn in our economy, uh, there's many reasons to, you know, in Silicon Valley Bank and so many things that can push back against, uh, companies in this space. Uh, but the reality is, in my point of view, uh, uh, Pear and Achille and others did a great job.

[00:26:19] Walter: Great job of, of opening the pathway. And, um, we see there's fantastic examples, but our regulatory environment and our reimbursement environment relies upon research and relies upon validation and relies upon, uh, demonstrating the clinical efficacy and the business effectiveness of these new therapeutics.

[00:26:43] Walter: And sometimes that takes a while. And I think we'd all like to have a more responsive system when something new is developed. That there's, um, better pathways to move it forward, but it does take time, and that's one of the reasons I've really enjoyed working with the Veterans Health Administration, uh, reimbursement [00:27:00] codes aren't, uh, 

[00:27:01] Vic: Right, right, they, they got a bunch of veterans they need to take care of, right?

[00:27:06] Marcus: So, so Walter, that, that begs the question, how is it going, uh, at the Veterans Health Association, uh, uh, administration? I mean, like, are, what kind of penetration do we have of, of VR devices, how many patients? Have been, uh, seen and been treated with these, uh, software medical devices. Um, and, and is there any outcomes that have been reported?

[00:27:33] Marcus: You know, I know that you are working across the spectrum, whether it's pharma or providers or payers, uh, in the research capacity, kind of in more of the commercial, you know, GovPay Um, uh, space, but as, as you said with the VA, I mean, they can kind of just do whatever it is they, you know, they, they want to do.

[00:27:52] Marcus: And, and hopefully we're finding some, some great outcomes there. What, what, what's reportable from, from, uh, from [00:28:00] the VHA. 

[00:28:01] Walter: Well, they're in the process of, um, of assembling, uh, the metrics about the economic impact and the, the clinical impact of the products, but they, and they've, they have stood up systems across every, um, every state, every VA hospital and, and most of the clinics.

[00:28:22] Walter: Have have, uh, some form of VR and again over 30 different clinical indications, many different products. Um, um, and they're in the process of, of moving that forward. What I, what I understand from my, my conversation is that, you know, on top of the thousands of patients that have used VR therapeutically on top of the thousands of clinicians who have used it with their patients, uh, the, the, uh, The reports are extremely positive.

[00:28:52] Walter: The patients like the products. They don't want to turn them back in. They want to take them. The clinicians feel that they're extremely [00:29:00] helpful in terms of reducing some of the time burden and allowing them to do more for their patients. Um, I think the next level is gonna involve better ways of, uh, interfacing to the existing, um, infrastructure at the Veterans Health Administration in terms of their, their EMRs, et cetera.

[00:29:18] Walter: But we're getting there and, um, I, I encourage you maybe bring back, um, um, and Bailey, who has, um, run the immersive therapeutics program at the VA for, for your podcast. 'cause she's a. She's made a big difference there. And, uh, again, I think it's not viewed as this exotic technology at this point is viewed as something that, uh, we're, we're adapting it to match the needs.

[00:29:43] Walter: And to some extent, we need to embrace some of the new tools that we have with generative AI. Um, you know, the products that are being fielded right now were from a previous generation of graphic design and artwork where where [00:30:00] things had to be, you know, a lot of everyone into creating the, the, the, that the experiences in terms of, uh.

[00:30:10] Walter: Um, you know, like, building a video game, very expensive, very time consuming, but now with generative AI, we can dynamically change the, the background information. So, if I need the clinician needs, might want to do exposure therapy in a kitchen that was set in the 1950s in the Deep South, we can do that. We don't have to use the 1 size fits all approach for the experiences that we use.

[00:30:34] Walter: So it's, it's moving forward. And, uh. Fantastic results. I would also say, if you look at the, um, you know, what we're seeing with many of the products receiving FDA clearance and a lot of published work demonstrating the, the clinical efficacy of the products were well over threshold of does it work? Is it useful?

[00:30:59] Walter: Is it [00:31:00] cost effective? But now I think we're at a stage where we're just making sure that it fits into the clinical ecosystem. 

[00:31:09] Vic: Yeah. So in the last couple of weeks, there's been two, uh, news items that I want to talk with you about. Cause I think hair really, uh, sort of push forward and, and, and establish software as a medical device as a thing.

[00:31:24] Vic: And it got approved by the FDA and I was celebrating, everyone was celebrating it. Uh, but then CMS. Decided not to reimburse for the tool, which is their purview, but was surprising because previously other devices when it had been approved by the FDA had been reimbursed, and so we now have this new, um, environment where someone who wants to bring a new device, new VR tool forward, you have to go through two gates, which are independent, or at least a Not, uh, not [00:32:00] directly linked.

[00:32:00] Vic: You have to get through the FDA to make sure it's safe and effective, but then you have to make the business case that it should be reimbursed. And a company called Applied VR actually established themselves with the VA, just, almost exactly like you and Marcus are talking about. It's a solution for back pain and has they have had great results and they found a new slightly new approach It's a very small change But I want to cover it because we have a lot of people listening that either in administration or with payers or doing a startup and so they File that they they were creating software in a medical device as a wholly contained package.

[00:32:43] Vic: And so the software is inherently part of the hardware device and they linked The hardware and software through the breathing as measured through the microphone, I think. Um, so, everyone will have to [00:33:00] look at their own products, but, but it wasn't a huge leap. It wasn't a, a brand new device infrastructure, but they did intentionally connect the hardware to the software.

[00:33:12] Vic: And I think that was important to CMS. I'm not exactly sure why, but I'm not sure it matters why. So that's one pathway. Now, if you sort of can connect, 

[00:33:23] Walter: I think it's durable medical equipment. Yeah. 

[00:33:25] Vic: So, so this software and hardware combination and the hardware aspect is the measuring of breathing through the microphone.

[00:33:35] Vic: That is what has been approved as a durable medical equipment. Device that that CMS is willing to pay for, um, and Highmark is paying for one of the blues is paying for it. That is, uh, pretty interesting because there are other VRAR tools that that might take that same approach. Um, and if it's a way to get reimbursed, get a code and get reimbursed, [00:34:00] that could be really positive.

[00:34:01] Vic: So let's talk about that. And then there's another pathway to that we'll talk about, um, around DeepWell too, but let's stick with that first. So is it, does it make sense to try to integrate the software and the hardware together as a package, not necessarily for effectiveness, but because it will be re it's more likely to be reimbursed in our existing software.

[00:34:20] Vic: Situation 

[00:34:22] Walter: I think that's a pathway. I think that, um, especially for, uh, work for, um, chronic low back pain. I think that is so key to be able to get those systems out and once validity has been demonstrated, um, and economic, um, impact has been demonstrated, then, you know, uh, That's a good, that's a good code to use.

[00:34:48] Walter: I think there's also work being done using some of the remote patient management codes, uh, for some of the products that are provided at home to, to help manage someone with their, their therapies. [00:35:00] Um, and then I think you, I think you're also, Vic, about to bring up some other, uh, code. Yeah, 

[00:35:05] Vic: so, so the other, the other example, and that's good, which was DeepWell, uh, which you brought up to me.

[00:35:10] Vic: It, they're really a game developer, but they have gone through the FDA 510K process really around their, uh, engagement, game mechanics, how their algorithms work to, uh, drive adherence. Yeah. And they wanted to do that in order to be ready for the, um, for the behavioral health codes that are, that are coming out in 2025, which are more like remote patient monitoring or chronic care management that they are, um, codes to allow, um, clinicians to monitor their behavioral health parent patients over time.

[00:35:52] Vic: And there's a fixed amount of money. For that, um, and some of these deep well algorithms or embedded in other [00:36:00] tools could be really helpful in that, which is another way to sort of get reimbursement, um, in a different pathway than you would otherwise. 

[00:36:08] Walter: Yeah, I think the, the concept here of establishing a particular game mechanic to use that phrase.

[00:36:15] Walter: That is, uh, promotes adherence or that promotes results. I think that's really very key because we're going to come up with more and more complex, um, um, ways of providing a mental health, behavioral health, um, rehabilitation, tele rehabilitation products. And we need to understand, as these get skinned with different layers on top of them of interactivity and, and experience, what is the core part that is promoting results?

[00:36:46] Walter: You know, what makes it impactful? What makes a product that, um, complex enough to have it be a patient's having an experience rather than just taking a pill or, or measuring something? Um, that [00:37:00] that's so important for, uh, for interventions and therapies. But what makes, what is, what is that key mechanism of action to use the that phrase?

[00:37:11] Walter: What is the mechanism of adherence? What is the mechanism of action? And can that be, um, approved as something that the FDA says is substantially equivalent to a biofeedback sites, for example? And that provides a pathway to be more generic that we can have other products come forward and say, we don't look like that other product.

[00:37:34] Walter: Um, because of the top layer of what we're doing, but if you look at the mechanics of what we're doing, here's the mechanism of action. And here's why it is. Um, here's why we can make claims about its effectiveness because we've validated that mechanism of action. So, to me, that's burrowing underneath and finding the active ingredient to a therapy, which I think is so important.

[00:37:56] Walter: I love it. Yeah, I have 

[00:37:58] Vic: I have some empathy for [00:38:00] FDA and CMS. I mean, they are trying to assess now, you know, this. big wave of new, largely software tools, and they don't have a good way to measure that. So if they can find the active ingredient, I love that analogy, like this is what they're really focused on that that might make the approval process faster and more effective.

[00:38:23] Walter: And in many ways that harkens back to the approach that pair therapeutics had is they were looking at previously, um, researched and validated digital health applications that had gone through extensive evaluation. And then they were taking something that might have been developed 10 years ago and using flash as the, as the, um, um, context and moving it to the current generation of technology, but preserving that active ingredient.

[00:38:51] Walter: And, uh, I think that's a key point. And I think as we move software deeper into how we how we reach people, which we have to do with an aging population [00:39:00] with some of the health care crisis, we need to leverage technology. We need to figure out what is the key part to look for for both validation for, um for regulatory review and also for, um, you know, reimbursement.

[00:39:16] Walter: So, uh, that. That to me is the critical part is coming down to that core part of what makes something effective. Can we measure that part? Can we extend it to other products that are coming out? 

[00:39:26] Marcus: Walter, Over the course of the 30 years you've been working in VR and healthcare, how have you seen the regulatory agencies?

[00:39:38] Marcus: And let's maybe specifically focus on the FDA here and maybe even just if we were to time box between your time as a chief scientific officer at pair to today, how have you seen the FDA mature? In its ability to assess these technologies, right? I mean, [00:40:00] technology is always going to lead regulatory agencies, so there shouldn't be some expectation that the regulators are ahead of the tech, right?

[00:40:07] Marcus: But the tech is moving faster and faster and faster. We are getting more You know, more consumer grade VR out there on the market, which inevitably would mean many more developers are working on these types of technologies. We're already seeing the backlog of AI, um, you know, submissions that are at the FDA.

[00:40:24] Marcus: So what have you seen in terms of the development of talent focus initiatives inside of the FDA to be able to properly assess this, uh, this, the efficacy and safety of this technology? 

[00:40:36] Walter: I think we should be proud and, and congratulatory of how the FDA has risen to the occasion. I mean, we, you know, they would, and we would love everything to go a little bit smoother and faster, but they have really, you know, looked at really com as the tech titans, uh, apple, Google, Samsung, uh, uh, all these companies are moving into healthcare.

[00:40:59] Walter: You know, things are [00:41:00] surging forward. You know, to look at the black box of, um, um, large language models and machine learning to make a clinical decision and being able to regulate that when it's, you know, when the when the data sets behind it change dynamically. Um, that would have been something the FDA said no way, you know, we need to be able to see all the wires and all the.

[00:41:25] Walter: All the all the parts and be able to then, you know, and they said, we're gonna we're gonna get on top. So, uh, I, I'm my impression is very, very positive. Now. I should say, I'm not regulatory specialist. It's not what I do, but what I see in terms of companies coming to the FDA, seeking review. And I see the new divisions being set up within the FDA to rise to the occasion.

[00:41:49] Walter: It just seems like they're, they're, they're on top of it. Yeah, I'm done. And I also see, you know, our healthcare ecosystem trying to rise to the occasion to, uh, I've [00:42:00] seen, uh, you know, health group has done some and with optimist and some fantastic was accepting, uh, and digital applications and, uh, and then worldwide to, I mean, look at what's going on in Germany.

[00:42:11] Walter: There's some really fantastic work there to. Systematize and organize and reimburse for digital applications. So, you know, I think there's a lot we can be frustrated about. Of course, things can, you know, there's hard working groups that come up with products and then, you know, and they know they make a difference.

[00:42:29] Walter: But, uh, getting the pathway to market is it can be a challenge, but. But I think we're, I think we're rising occasion and we really have to, I mean, with an aging population with the crisis of burnouts in our clinicians with the crisis of mental health in our youth, we've, we've got to leverage technology to solve these problems.

[00:42:50] Walter: And so, you know, yes, I, I'm, I'm, I'm feeling positive about how our agencies have responded. But, you know, I'm sure they would like [00:43:00] to move faster and we would like to move faster too. But I think we should applaud them for the work they've done. 

[00:43:05] Vic: Uh, so Walter, I, I was listening to a speech you gave, I think it was to the VA and you touched on the changing role of the clinician.

[00:43:12] Vic: And so I'd like to end with, you know, you've seen this market evolve from really nascence to a pretty exciting space today. Where is it headed? And particularly maybe let's focus on what the clinician's role is going to be as, you These new tools come out and there's all kinds of, of data sources and technology.

[00:43:35] Vic: tools. What is the clinician's function in that, in that system? 

[00:43:40] Walter: It's a very important question, and I think it's a, it's a, a dynamic between good design and also, um, changes in, in the roles and practices in, of clinical care, um, I remember at the beginning of our call, I talked about the [00:44:00] product I made on the Apple 2 computer.

[00:44:02] Walter: When we moved from the Apple 2 to the Macintosh SE, I found there were a lot of clinicians who not only did not know how to type, they didn't know what a mouse was. And, uh, that was because back in that day, you know, everything was analog and handwritten, and, uh, uh, we made fun of doctors and their handwriting.

[00:44:20] Walter: Um, um, now we have EMRs, and if you are a doctor who doesn't have a computer in the room while they're, they're talking with you, you wonder what's wrong. Why aren't they leveraging technology? So, things change, I think now, with AI coming in, with these systems that we're talking about that, Allow you to manage a whole spectrum of your patients and see how they're doing.

[00:44:45] Walter: We can have a dashboard that is red, yellow and green and nuances to that scene with feedback on the patient status and whether it's time for someone to come in, or whether they, they aren't doing their exercise, or they've fallen off the charts. [00:45:00] Now, there's much more information about patient status and progress, but we need to make sure we design these.

[00:45:08] Walter: Dashboards, and we provide the information to the clinicians in a way that's not burdensome and is palatable. And that's a design challenge that the project developers need to have. But we also need to, as clinicians, there's a need to appreciate that the role is changing, that there's a lot more information about the individual status of the patient.

[00:45:30] Walter: The patients are showing up with data from their wearable sensors, and they want to integrate that into What you're seeing as a clinician, um, I think you're, I think clinicians are becoming more of. Um, experts who can provide advice and leverage, you know, the technology that's coming out, like digital twin technology and simulations and integrating information for disparate source make the right clinical recommendation [00:46:00] and that means, um, both getting on top of new technology.

[00:46:05] Walter: But new technology needs to get on top of what the clinicians need to see and how they, you know, make sure we don't overburden them. So it is complex, but you're right, the role is changing. And, uh, uh, I, I think we, we need to make the stair steps to make it like not a big leap, but gradual evolution of, of how we practice medicine today.

[00:46:27] Vic: Is it fair to make the analogy to financial planning that Um, like I go to see a financial planner and they'll, they'll sort of, uh, talk to me and try to learn about what my goals are, but then they have a, a set of tools that they can advise me on and pull in a mixed, mixed set of things to match what I need.

[00:46:47] Vic: Is that close to what a clinician will be doing in the future where they, they meet with me and they try to understand where I am now. They take readings on various, uh, you know, biologic markers. And then we together sort [00:47:00] of map out a plan. like, you know, buying, buying stocks and mutual funds and things.

[00:47:06] Vic: I don't actually do that. I sort of talk to my advisor and then they, they go do the things. It may be that the, the doctor or the, the set of clinicians that I work with, they're more sort of partnering with me on these things. They're experts at certain things, but it's more of an equal, um, I'm talking about what I'm willing to change and what I'm willing to do and what my hopes and goals are.

[00:47:29] Vic: And then it helped me get there. Is that. 

[00:47:31] Walter: Close to what you're painting as a picture? Oh, absolutely. I think I think that's a perfect description of, um, the optimal pathway. And I think that, um, the key part of what you said that I think is so important to reinforce is the part about understanding the patient's goals all too often, we have algorithms that if you have this measurement, if you're in this age group, here's the therapy that should be provided to you, but really, you know, patients, uh, do have [00:48:00] different goals.

[00:48:00] Walter: Some may want to optimize for getting back to work sooner. Others might want to optimize for a longer lifespan or health span others might the priority might be to have more time for more ability to do something else. So the clinicians need to and we need to design into the dashboards and systems. We build the ability to have a patient reflect their goals.

[00:48:23] Walter: And, uh, it does also need to be portable that if, um, if your clinician moves to another city, that the information and perspectives are available to whoever is stepping into her place. Um, and it also needs to be, I think, uh, You know, we're still evolving some of the interoperability issues among our digital health technology.

[00:48:47] Walter: So, I think that's part of the problem to allow a clinician to have that helicopter perspective and make the recommendations. I think in many ways, our banking system is a little bit more structured. And our financial [00:49:00] system, uh, then our healthcare ecosystem in terms of evolution, digital health, you know, groups, multiple groups that are putting together a ways of standards and their ability.

[00:49:12] Walter: But that that still is something we need to work on. But, uh, yeah, I, I love that vision. And I also think, um, it's, um, it's more than just being the, um, um, advisor. I think you're also the coach, you know, like, you, you, the role is partially to say, here's. Here's what we know. Here's the expertise. I can give you information and I can help you think it through.

[00:49:37] Walter: But also, you know, I need to it's not easy. Healthcare is not easy for the patient and often it's a challenge. It's especially when it gets rough. So I think we also need to see, and they're currently doing this, but we need to preserve that as we move forward, that empathy, that willingness to care for your patients and help them find the best pathway.

[00:49:58] Walter: We need to make sure the layers of [00:50:00] technology we put on top of that doesn't get in the way of that. 

[00:50:04] Vic: Yeah, almost empower them to be empathetic and spend more time with the patient, coaching them, and because they have these technical tools that allow them to do so. 

[00:50:16] Walter: Exactly. 

[00:50:18] Marcus: All right. So, so Walter, maybe I'll, I'll get the final word in here.

[00:50:21] Marcus: Uh, you you've come across throughout this interview as a very pragmatic person. Uh, however, uh, just to have a little fun, I I'd love to get a prediction for next year. You know, last year we, um, We, we, we went pretty in depth into the end of pair because I think we were both concerned we, we have a track record of investing in digital therapeutics, um, successfully, uh, and we were pretty concerned about sort of what the long term implications of, of the end of pair we're going to be, uh, and then kind of out of nowhere in the last month, we, we've seen some really Thank you.

[00:50:56] Marcus: Uh, great signs that digital therapeutics are kind of back on [00:51:00] the rise from an investing perspective and reimbursement and and relationships with payers and things of that nature. So that's really good. Um, you know, having you in the seat here, what do you think we as investors should be on lookout for in 2025?

[00:51:15] Walter: I'm rarely accused of being pragmatic, so thank you for that. I would say that, um, um, I love the quote from William Gibson, the future is already here, it's just unevenly distributed. There are some remarkable things that have been developed and are on their way in all full stack of healthcare. And it's all, you know, based on, on digital technology, AI is giving us a lot of jet fuel here, and we have no choice.

[00:51:46] Walter: I mean, we have to move these systems into our healthcare ecosystem and, uh, there are some wonderful breakthroughs that are occurring. So for 2025, I, I would, uh, I would say. It's not a [00:52:00] time to go back, um, because things are just starting to surge forward. I think it's the time to, to find the, find the ones that are doing it right.

[00:52:09] Walter: And, and, you know, follow them, but there's more you know, these are this is the, these are the advanced scouts for. Um, you know, a tidal wave of of digital health applications that are going to transform health care. And I, I think that we know that's happening. And it's, it's, it's something that, yes, there's been setbacks.

[00:52:32] Walter: That's just part of how things go. And some of, some of that is, uh, an aspect of, of our health care ecosystem adapting to these amazing technologies. But I see a gathering momentum. I'm, I'm very excited. Um, I'm very positive about where things are going, um, and, um, I, I wouldn't hold back right now. 

[00:52:55] Vic: So one of the things you suggested to me, uh, when we were speaking before is that, [00:53:00] um, the Gen AI tool set is, uh, getting more and more powerful every day and it's relatively inexpensive compared to the old way of doing things.

[00:53:10] Vic: These VR environments, and it might be a business model to watch to have a like a free, uh, tool out there that would be much lower regulatory approval. Of course, no reimbursement approval in order to gather very large numbers of user data. See how it's making a difference and then you have a premium track like like a normal freemium model But it's really more around the efficacy and the business case to get reimbursement that that you were saying that could be an interesting business model to watch 

[00:53:44] Walter: Yes, what I'm advising, uh, my, my clients who are bringing out new health care, digital health care products is that there's a wellness component where the claims are different and the application areas are different.

[00:53:57] Walter: But the, the data they're collecting, [00:54:00] um, can be tagged and used to empower, um, products that are on the clinical side of things. And that, uh, a bimodal approach, it used to be the investors would say, focus. I think Sure. Focus, but make sure that you, that you leverage the power of, of numbers and data that we get from wellness applications.

[00:54:18] Walter: Use that to, to build out the foundation of, uh, data and analytics for, for more clinical facing applications. I, I think we'll see more companies doing that. The other thing to, to look out for is. AR technology is soon about to take off, and we have Google glasses and things like that. But the next generation of AR is going to be low cost, comfortable to wear, powerful, and there's going to be clinical applications on top of that layer of technology too that I think is, is, we're going to see transmedia applications, not just going to be desktop, laptop, cell phone, and.

[00:54:59] Walter: [00:55:00] Watch is there's going to be applications that span all those technology platforms to provide better health care. 

[00:55:05] Vic: Great. Well, that, that's a, that's a good roadmap. We have plenty to invest on that. I think Walter Greenlee, thanks for doing this. Really enjoyed it. We'll need to have you back to talk about AR as it comes out.

[00:55:15] Vic: We can be always wearing new glasses, uh, in six months, six months or 12 months. 

[00:55:20] Walter: Uh, that'll be fun. Next time we'll meet in a virtual world to have this conversation. 

[00:55:23] Vic: Yeah, that's a good, that's a good idea. It's a good idea. Hey, thanks Walter. Appreciate it. 

[00:55:27] Walter: Take care guys.