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.”
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