Corrections or additions?
This article by Barbara Fox was prepared for the January 17,
2001 edition of U.S. 1 Newspaper. Additional information on
Speedia.com Inc. was added after the edition went to press. All rights
Ray Watrous’ new Siemens spinoff updates the old-fashioned
Picture it as a Norman Rockwell painting — the
little girl has brought her ailing doll to be cured by the family
doctor. The doctor, stethoscope in his ears, is listening very
to the doll’s heart.
Rockwell might paint that scene differently today. To reflect today’s
healthcare practices, the doctor could be giving the doll one of
expensive tests, an EKG or an echocardiogram. Studies show that
care physicians (the general practitioners) are referring too many
patients to cardiologists for fancy tests. They are also referring
too few, because they are failing to detect latent cases of valvular
heart disease. Why? Skills in "hearing" heart problems with
a stethoscope have atrophied.
If only we had a "magic stethoscope," an instrument that could
non-invasively and automatically "read" the health of the
heart, then we could use it both in monitoring patients and perhaps
in acute care situations. Such a instrument used during a routine
examination could connect your heartbeat, captured and interpreted
by new software, to an expert.
Ray Watrous, a researcher at Siemens Corporate Research (SCR) on
Road, thinks he has just such an amazing device. Watrous has the
of a lifetime — to go off on his own to start a high tech company
yet be backed by an international mega firm. He and his cohorts at
Sound Diagnostics, a young Siemens spinoff, are working with signal
processing technology to record and analyze the acoustic signals of
the heart. Their instrument, called an Auscultation Assistant, uses
algorithms to find abnormalities in the acoustic signals and gives
information to help with a diagnosis. His firm is announcing an
investment partner, Speedia.com Inc., this week.
Skill in using a stethoscope has been neglected among primary care
physicians for 20 years, says Watrous. "We concluded there was
a real opportunity here for speeding the time of therapy." His
instrument would save money every time it prevents a needless visit
to the echocardiogram lab, a visit that can cost from $1,000 to
"There are strong incentives for improving the diagnostic accuracy
of cardiac auscultation," says Watrous. "Computer-assisted
auscultation — listening to the heart with a stethoscope —
will dramatically improve the ability of listeners to detect
and by providing wireless access to a web-based signals archive,
will be able to access patient data, perform serial comparisons, and
make online referrals."
Different kinds of electronic or digital stethoscopes are on the
now for under $400, but their purpose is to record, not analyze the
data. And other telemedicine devices do transmit other kinds of heart
data. But the Sound Diagnostics instrument would be a very advanced
tool in the telemedicine revolution.
In 1998 Siemens’ Andy Zawadzki estimated the home automation market
would be $4 billion in the United States by 2002. Other estimates
put the growth rate in telemedicine at more than 35 percent a year
for the next five years. Over the next three years hospitals are
to buy information systems worth more than $14 billion.
Kevin Pezzi used to be an attending physician in a large teaching
hospital. "Very few of the residents knew what they were doing
when it came to auscultation — cardiac sounds," says the
physician/inventor. Pezzi has developed an electronic
that represents the heart sounds in a graphic format (www.erbook.net).
Not having seen the Siemens device, he points out that EKGs are far
more sensitive than sound, "and EKG technology is very easy to
"Telemedicine is a very fast growing segment of all the monitoring
services," says Frank Movizzo, owner and CEO of MedNet Healthcare
Technologies, a firm that transmits electrocardiograms over telephone
lines (www.unimed.com). Based on Ludlow Drive in Ewing, his 62-person,
$7 million firm sells both heart monitors and software management
systems. "Telemedicine can help people in rural areas and those
that are too sick to make a doctor’s visit. The pressure from
to keep the cost of healthcare down is also a plus for telemedicine,
and HMOs are always looking for cost-saving devices."
"Along with telemedicine will come the advancement of clinical
output, neural networking (artificial intelligence)," says
"More devices that are web-based, trans-telephonic, and wireless
will have analysis components. But nothing will replace anything
he warns. "You will still need the EKG to look for arrhythmia
and abnormal beats. And you still may need an echocardiogram to look
at organ damage."
"The new instrument could prevent unnecessary testing — a
shotgun approach to diagnosis — or trigger some needed
says Movizzo. "Any information you give a physician that is more
than a shotgun approach would be helpful. Many paths can lead from
prognosis to diagnosis, and technology aids in choosing the right
The son of the chief engineer at American Viscous Plant Avisun Corp.
in Marcus Hook, Watrous went to the University of Pennsylvania’s Moore
School of Electrical Engineering, Class of 1971. He has a PhD in
science from Penn and has worked at Siemens for 15 years. He met his
wife when she was in nursing school, and they have four children,
ages 15 to 20, all home schooled.
Watrous’ entrepreneurial journey began when he went sailing on Lake
Carnegie just after he had had a strenuous workout on a rowing
"I pulled a muscle in my chest and was quite sure it was a muscle
strain," says Watrous. "But I spent a few hours at Princeton
Medical Center’s ER and it turned out, of course, not to be a heart
attack. That started me thinking about helping people to determine
how to tell whether or not their chest pains are myocardial
Many people try to talk themselves out of it for a couple of hours,
promising themselves to call 911 after another hour goes by. By then
it may be too late."
"We started thinking about ways to combine non-invasive cardiac
sensors to build up a composite picture of heart function," says
Watrous. Advanced technology on an inexpensive platform like the PC
can be low cost and made available to people in their homes, he says.
In 1997 Watrous and his team began working on a prototype that
multiple sensors (ECG, phonocardiogram, and pulse oximetry sensors),
signal processing algorithms, and Bayesian networks for probabilistic
reasoning. Their prototype algorithm is able to identify basic heart
sounds and murmurs and come up with clinical findings that could help
physicians and other healthcare providers in distinguishing innocent
heart murmurs from dangerous ones.
The device "listens" to the blood flow, the opening and
of the valves, and the turbulence generated by failures of the valves
to close. This is difficult for humans to hear because many of the
important sounds are below the threshold of human hearing.
Sound Diagnostics, formed in 1999, is the first SCR spinoff in 10
years; the most recent was Gradient Technology. SCR, which has 150
people on College Road, is one of five R&D centers worldwide for
AG, based in Berlin and Munich. SCR has invested in it through its
venture capital arm, Siemens Venture Capital.
"This is an exciting opportunity to commercialize a technology
developed at SCR by participating in the capitalization of a new
company," says Thomas Grandke, president and CEO of SCR.
But Siemens’ investment was contingent on finding external
"Right now the Siemens spinoff is a one-product, one-technology
firm, and it is hard to build a company around one technology,"
says Tony Warren, of Adams Capital Management, who had been introduced
to company officers at the Silicon Garden + Angels Investors Network,
run by Dan Conley. "Venture investors want a road map to several
A strategic corporate investor — Speedus.com, Inc. (Nasdaq: SPDE,
has been brought forth and has agreed
to provide seed funding to develop and commercialize the technology
in exchange for an equal stake in the venture with SCR. As a result
of this agreement, Sound Diagnostics Inc. now owns the three patents
are pending. The agreement — to be announced January 16 — is
expected to involve clinical trials, scaled up production, and proof
of prototype. SCR and Speedus will have equal stakes in Sound
Speedia Wireless, a wholly-owned subsidiary, has an exclusive contract
with SDI to design and develop wireless applications and also to
provide transaction processing to support the commercial rollout of
SDI’s cardiac diagnostic products. This subsidiary has end-to-end
wireless solutions (www.speedia.com).
Says Watrous: "I am very excited about working on a technology
that I was involved in developing. The idea of a growing a company
and adding value and seeing it grow is tremendously exciting."
— Barbara Fox
Princeton Forrestal Center, Princeton 08540. Thomas Grandke, president
and CEO. 609-734-6500; fax, 609-734-6565. Www.scr.siemens.com.
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