While Nashville may be well known as “Music City” for its rich history of country music, the city also has gained recognition as an incubator of healthcare innovation and services.
Nashville is home to 400 healthcare companies, with 18 publicly traded healthcare companies headquartered there, generating more than $84 billion in annual revenue and more than 500,000 jobs. According to a study by the Nashville Health Care Council and Nashville Capital Network, the city is in the midst of a venture capital boom, with healthcare IT leading this surge in investment.
More than $940 million was invested in Nashville healthcare companies by venture capital firms from 2005 to 2015; that amounts to 60 percent of Nashville’s total venture capital investment dollars over that time period, according to the study. Venture capital investment in health IT companies has grown from $2 million in 2009 to a peak of $62.5 million in 2014. Health IT venture capital investment surpassed that of healthcare services companies in 2012, and now represents the largest share of VC investment in the Nashville healthcare market.
With the dynamic changes occurring in health care, new health care companies are being founded in Nashville at an accelerated pace. These innovative new companies are forming partnerships with the city’s healthcare community to address the new and evolving challenges brought about by the transforming regulatory landscape and the pressing need for cost and quality improvements in the U.S. healthcare system, according to Hayley Hovious, president of the Nashville Health Care Council.
Nashville has a legacy of healthcare leadership, entrepreneurship and innovation, Hovious says, and this has helped to foster collaboration and connectivity. The city has been making its mark on the national healthcare landscape since the founding of the Hospital Corporation of America (HCA) in 1968, and now companies such as Acadia Healthcare, Community Health Systems and LifePoint Health are headquartered in Nashville as well.
“Nashville is called the Silicon Valley of healthcare just because of the number of companies that have developed here. There is a really deep well of talent and knowledge about the delivery of healthcare here,” she says.
The health IT innovation happening in Nashville, and around the country, will be explored during the upcoming Nashville Health IT Summit, sponsored by Healthcare Informatics, June 28-29. Learn more here.
The Nashville Health Care Council, which was founded in 1995, is helping to drive interdisciplinary collaboration within the healthcare market by serving as a catalyst for leadership and innovation. The council has an annual budget of $3.3 million and brings together top-level healthcare executives for meetings, public forums and networking events. The council’s membership includes leaders in hospital management, outpatient services, population health, behavioral health, senior living, pharmaceutical services, academic medicine, health IT as well as professional services firms.
The council also focuses heavily on leadership development through its Fellows program that aims to bring together select industry executives to explore new solutions that meet the challenges facing the U.S. healthcare system.
“In the Fellows program, we pair senior executives with other executives across the industry with the goal being to really break down silos and get them to think differently about healthcare,” she says. “We’re bringing people together who wouldn’t normally sit down next to each other and have a conversation on how we can change things. People who get together and say, ‘I’ve got an idea for how we can work together to change things.’ And, we’re starting to see that happen.”
Healthcare leaders in other cities are trying to replicate the success that Nashville has seen in its efforts to foster collaboration and advance technology development. In Austin, Texas, the Austin Healthcare Council launched in early 2017 to bring together executives in the medical and biotech fields to communicate and collaborate. In October 2016, the Health Care Council of Chicago was formed to foster connectivity in the Chicago-area health care community.
Hovious says the growth in healthcare-focused councils points to the recognition that there needs to be more collaboration in healthcare. “There is a growing awareness that there is a lot of value in bringing people together and convening the industry experts,” she says.
While the Nashville Health Care Council can serve as a model to other cities, Hovious contends that Nashville has a unique healthcare ecosystem that spurs innovation. “There is a long history of entrepreneurship here, and the market here has a long history of investing in itself. We’ve had the fastest growth in venture capital investment, while the rest of the nation is seeing growth of 40 percent, we’re at 400 percent growth,” she says.
There is a strong collaborative spirit among healthcare organizations in Nashville as well, she notes, particularly around sharing clinical best practices to improve patient care. “When we bring in executives, they are struck by how much people are willing to work together here, and that’s not necessarily the case in other cities. Even the hospitals that are providing care at the local level are far more willing to talk to each other and work with each other; it’s just a different kind of environment.”
And, she notes, “There are also vast quantities of data that reside here. As a data repository for healthcare, particularly on the clinical side, you can image having the headquarter companies here that have a national reach, like an HCA, a LifePoint Health, a CHS, and Acadia.” She adds, “Vanderbilt (University Medical Center) alone has one of the largest genomic sets in the NIH (National Institutes of Health), and that’s in addition to their clinical data.”
As a result, there are many healthcare companies in the Nashville market working on data-driven initiatives, she says. “They are using AI (artificial intelligence) and pairing it with natural language processing to go back through doctor’s records and start to identify problems at the point of care. We have a number of other companies that are taking data around opioids and working to be able to predict and prevent opioid abuse using this data.”
Hovious also points to the Center for Medical Interoperability, which opened its headquarters in April 2017. The center is a cooperative research and development lab founded by health systems to simplify and advance data sharing among medical technologies and systems. In an interview with the Nashville Business Journal, the center’s CEO Ed Cantwell said Nashville was the ideal location for the center due to the proximity of the area’s major health systems, namely HCA Holdings, Inc., Community Health Systems, LifePoint Health, Vanderbilt University Medical Center and Ascension Health (represented here by its local system, Saint Thomas Health).
“The ‘procurement power’ of those groups makes it more likely they can influence vendors to work with the center to achieve its goal of solving the interoperability problem, Cantwell said in the article.
Looking ahead, with the unprecedented pace of change occurring in healthcare, the need to break down silos and to spur collaborative thinking and innovation will only continue to grow, Hovious says. Among the health IT and digital health companies in the Nashville market, Hovious is seeing a growing focus on the patient experience. She points to healthcare startups such as Narus Health and Aspire Health which are both focused on providing a personalized approach to palliative care through a digital platform.
“We’re starting to see more of that patient focus. How do you give people access to their data? How do you help people have a more personalized path in the system? How do you make sure their care treatment paths are tailored to them?” she says, adding, “The problem we struggle with in healthcare is always that the pace of change in technology is exponential. Everyone sees all this potential happening, and the question is, ‘How are companies focusing on the really important things?’”
“What we’re seeing In Nashville certainly is a focus on the consumer, and also a focus on how you use data. The great thing is that we have so much of it, but how do you make that data something that you can harness and use to improve care?” she says. “There is so much healthcare delivered out of Nashville. I do think we have an opportunity to work with others, such as Silicon Valley, because there is such a deep well of knowledge here on how to drive efficiencies and improvements at scale to actually affect patients and make care better.”