Accelerating Digital Health in New York and Beyond
Recently there has been a lot of media attention around the newest class of startups picked to participate in the New York Digital Health Accelerator’s (NYDHA) second class (announced July 22 2014). Before unraveling this, let’s first set the scene. 1) Digital Health is off to a record breaking start in 2014 with VC investment pouring in at a breakneck pace – $2.3B through June 30th – and 2) additionally, there has been a proliferation of Digital Health specific accelerator and incubator programs over the past few years – the stars being Rock Health and Blueprint Health (see expanded list of accelerators @ VentureScanner). It is safe to say there are A LOT of eyes on Digital Health and the ground for health tech entrepreneurs is the more fertile than ever. Resources are abundant.
2014 Mid-Year DH Funding
So, given all of this activity in the space, what makes this second NYDHA incoming class so special? Aside from the participating companies themselves (not to take anything away from them – they all sound awesome), additional media attention is likely due to the success of NYDHA’s inaugural class that graduated in 2013. At present, this first class of companies has raised over $20M in follow-on funding in total and furthermore, two companies were acquired by prominent health organizations (including WebMD) within six months of graduating the program. The bar has been set high for the incoming class and New York is quickly becoming a hub for health tech, second only to California in terms of VC funding. This all aligns with the overarching goal of the NYDHA program – to fuel innovation in healthcare and to grow the economy of New York by creating jobs and attracting additional investment to the state.
Dissecting it further, the NYDHA has a unique model that serves the needs of a unique sector and I would like to highlight a few distinctions that I believe have helped it work well thus far and why.
Unique Model:
1. NYDHA is a public-private partnership
Sponsored by the State of New York and run by the New York e-Health Collaborative (a non-profit) and the Partnership Fund for New York City (NYC’s economic investment arm)
2. The mentor network is a group of prominent New York State based healthcare providers
This includes hospitals, long-term care providers, community health centers and primary health care providers – again, all in NY
3. The program’s selection committee is the mentor network (not investors) AND the mentor network (see above) is made up of prospective customers of the participants
4. Participants have open access to the Statewide Health Information Network of New York (known as SHIN-NY)
This is a secure platform of clinical patient data that is accessible to healthcare providers in NY – effectively it is a public utility – innovative in its own right
(Note: lion’s share of above logistical detail sourced from here)
Unique Sector:
Digital Health sits at the intersection of healthcare, technology and business and within this intersection there is A LOT of talent. But…these parties see it through slightly different lenses. To frame simply, doctors generally do not become technology entrepreneurs and technology entrepreneurs are generally more apprehensive to touch highly regulated sectors like healthcare. That said, achieving success in Digital Health is absolutely possible (and evidenced) but “complete” success is a product all of these parties working together.
The neat thing about the NYDHA model is that it eloquently reduces the barriers to collaboration and helps to bridge the gaps between the government -> health systems / providers and -> tech entrepreneurs which empowers its cohorts of Digital Health companies to effect real and impactful change within the healthcare space. Other organizations have taken notice of this formula too – the California Healthcare Foundation, for example, has called it one of the most successful accelerator models in the country. One that is being and hopefully will continue to be emulated and adopted by public + private entities in the future as Digital Health continues to find its way and change the game!
For a full list of Digital Health companies that I am currently tracking, please click here.