John Beadle, co-founder and managing partner, Aegis Ventures.
Aegis Ventures
For Years, Michael Dowling has listened to outsiders’ claims that health systems are far too slow to adopt recent technologies, and he’s uninterested in hearing it. He believes the critics are fallacious. “We are inundated with technology companies coming to us with products and ideas,” said Dowling, president and CEO of New York-based Northwell Health Forbes. “A lot of it is not based on the reality of how health care is actually delivered.”
That’s why Dowling has partnered with startup incubation studio Aegis Ventures and its $100 million fund to drive more thoughtful and targeted innovation within the nonprofit healthcare system, valued at $15.6 billion (2022 operating revenue). used. Together, they construct corporations based on what health systems really need—not what Silicon Valley enterprise capitalists imagine.
Aegis’ model gets around this problem by putting early healthcare customers on the startup’s cap table and using them as testing grounds. On Tuesday, Aegis announced that nine health systems, including Northwell, Stanford Health Care in California and Ochsner Health in Louisiana, have formed a brand new consortium based on its model. Together with Endeavor Health, Indiana University Health, Memorial Hermann Health System, Novant Health, The Ohio State University Wexner Medical Center and Sharp HealthCare, they may develop startups to deal with the true needs of the healthcare system. In total, the consortium has operating revenue of greater than $65 billion and employs 300,000 people.
“Once you get a successful proof-of-concept for one of these systems and the connective tissue is there across the consortium, you can scale it up and get it to patients much more quickly,” said John Beadle, co-founder and managing partner of Aegis Ventures Forbes.
John Noseworthy, Chairman of the Aegis Ventures Digital Consortium.
Aegis Ventures
The so-called Digital Consortium is led by John Noseworthy, the previous president and CEO of the Mayo Clinic. Noseworthy told Forbes The key to success can be getting the support of frontline staff who see an actual day by day need for the brand new tools being developed. “When employees are involved in developing ideas, planning, implementing, testing and improving, they are committed to changing broken systems,” Noseworthy said. He added that they’re significantly less willing to accomplish that in the event that they are presented with a jumble of various solutions that do not solve real problems or don’t fit into their workflow.
With Aegis, health systems select to speculate on a deal-by-deal basis with no management fees and have direct equity. “Health systems can end up with double-digit ownership and the ability to invest much earlier when there is much more potential,” Beadle said Forbes. That means hospitals can be more involved, an enormous difference from a typical hospital-venture firm relationship where the corporate is a limited partner in a fund or a late investor and finally ends up with significantly less equity.
As promising because the Aegis model may sound, few of its members are going all-in. Many are testing the waters by joining while continuing to make separate investments from their very own enterprise arms or off the balance sheet. “That doesn’t mean we don’t continue to entertain and work with other companies that come to us with good products,” Northwell’s Dowling said. “It’s not an either/or situation. It’s an additional addition.”
An enormous problem for Northwell — and most health systems — is the quantity of paperwork required for all the things from discharging a patient to verifying insurance status. Northwell is working with Aegis on a startup called Ascertain that’s using generative AI to construct a military of administrative bots to assist with a few of these tasks, comparable to understanding what an insurer pays for transferring a patient from a hospital to a rehab facility. Facility required. “We believe Health Systems is the best brand in healthcare,” Beadle said. “So how do we make sure they have the tools and skills to solve their problems?”
Another challenge is getting patients to point out up for appointments in the primary place. This is where one other co-developed startup called Caire comes into play; It develops software that tracks the patient’s care journey and engages them with reminders. With Optain, Northwell and Aegis are also attempting to detect diabetes complications earlier by developing an easy-to-use device that screens eyes for diabetic retinopathy and uses AI to create a cardiovascular risk rating.
Northwell and Aegis were also each investors in Hume, a conversational AI startup that claims to interpret emotions based on the best way people speak. This technology just isn’t specific to the healthcare industry and is utilized by over 1,000 corporations. “That applies to a lot of things we want to build in the future,” Beadle said. “Maybe we’ll start in healthcare but then expand.”
The next step is to boost tens of tens of millions of dollars in Series A funding for every of those startups and proceed their joint development. This is where the opposite health systems within the consortium come into play and choose the businesses that best meet their needs. (This is along with developing our own internal startups with Aegis).
The hope is that these healthcare-grown startups will soon be scalable with 4 or five additional co-development partners. “If we are successful, we will be essential partners to these health systems,” Noseworthy said. “They’ll say, ‘Gosh, due to you we are able to do quite a bit greater than we thought.’ Let’s do one other one.’”
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