When I saw a press release last week from Salt Lake City-based Intermountain Healthcare and Healthbox about the launch of their healthcare innovation and venture model, I was intrigued because I had recently interviewed Jill Seidman, a Healthbox director, for another publication.
For Government Technology magazine, I profiled five different business incubators and focused on their links to government and economic development.
Healthbox, launched in 2012, is headquartered in Chicago, with five U.S. hubs: Chicago; Boston; Tampa, Fla.; Nashville, Tenn.; Salt Lake City (plus London and Tel Aviv).
Seidman told me that Healthbox typically works with six to 10 startup companies per program. It raises money in a microfund structure to pay for its operations. It also makes investments in early stage health-care companies. Funding comes from strategic partners, usually in the health-care field. “A good example is in a Chicago program where we have HCSC, Advocate Health Care, Ascension Health and several others participating,” she told me. “The typical structure is $50,000 in exchange for 7 percent equity, but that structure does vary based on the stage of the company,” she added.
What interested me was that large health systems are eager to work with these startups because they want to look at the broad base of innovation in health care and see where trends are going. Basically, they don’t want to be left behind. They want to see the companies coming along that may create something that would change the way they do business. Or they are looking for companies that may be able to meet a specific current need. “For instance, in our last Chicago program, one of the large health-care companies became partners with two of our portfolio companies,” Seidman said. “They also want to expose their own employees to innovation. There are things employees of large organizations can learn from startups about flexibility and agility.”
Also, they want to increase the number of internally generated ideas that end up as products or internal efficiency improvements. That is why the "chief innovation officer" title is hot.
In partnership with Intermountain, Healthbox will lead three new initiatives in Salt Lake City, according to the press release:
▪ The Intermountain Foundry provides a structured framework to help high-potential employee ideas and near-market concepts become commercial businesses.
▪ Strategic investments will source companies from the broader healthcare ecosystem and develop partnerships that include investment and potential customer relationships.
▪ The Healthbox Salt Lake City Accelerator, which launched in September in partnership with Health Equity, Zion’s Bank and BD, brings the Healthbox infrastructure to Salt Lake.
For Intermountain, which has 22 hospitals and 185 physician clinics, focusing on becoming a “model healthcare system” translates into pushing the boundaries of established practice and forming relationships with the entrepreneurial community inside and outside of the healthcare system, testing new ideas inside the organization and learning to be an early adopter of outside solutions.
“Over my tenure, I have been increasingly impressed with the innovative ideas coming from Intermountain Healthcare’s physicians and employees that hold the potential to lead us into the next era of healthcare delivery,” said Bert Zimmerli, Intermountain Healthcare’s chief financial officer, in a prepared statement. “We have a responsibility to always improve the healthcare available to the communities we serve. Collaborating with Healthbox provides us not only with the foundation to expand the impact of their solutions but the means to form relationships with entrepreneurs and their technologies that will improve quality and reduce the cost of care for our patients.”