ORLANDO—During HIMSS24 Views from the Top session, “Digital health startups: Harnessing innovation to disrupt and improve care delivery,” experts relayed that strength in an executive team (not necessarily a product) and solutions that solve providers’ pain points are top of mind.
“There are a series of attributes we tend to weigh pretty heavily–the strength and relevance of the executive team is first and foremost,” said Michael Greeley, cofounder and general partner at Flare Capital Partners.
Still, Greeley said what is complicated now is the digital health financing and funding environment, which is historically bad, particularly following 2021’s enormous influx of capital into the sector.
“We’re now in this really awkward phase. We probably created way too many companies. Many of them have narrow offerings and are struggling to get traction in the market,” he said.
Still, investors look for companies that can scale quickly and take credit for cost reduction in the near term. Data and attribution are vital–getting credit for an offering’s impact on patients.
As a provider, Robbie Freeman, system vice president of digital experience and chief nursing informatics officer at Mount Sinai Health System, said that when looking for companies to work with, he focuses on those with narrow-point solutions and a broader platform that can deliver on numerous use cases.
Freeman said it starts with listening to consumers, patients and employees to understand pain points. His organization then looks to either build the platform or partner with the vendor community to see what the best fit is for Mount Sinai.
Mary Beth Chalk, cofounder and chief commercial officer at BeeKeeperAI, said her earlier-stage startup built its business model around the revenue generation capability, while Abhinav Shashank, CEO and cofounder at health data analytics startup Innovaccer, said his company designed its solution to address a specific problem.
“People need to depend on knowing beforehand that this is the problem that we are out to solve and this is how we solve it,” Shashank said. “The thing that has worked in our favor over the last few years is that we migrated very quickly.”
Still, balancing innovation with maintaining integrity takes a detailed development process.
“If it’s not a mission-critical problem for a health system, people will give up,” Abhinav said. “That’s why building a tech startup in healthcare is very hard.”
Healthcare impacts people’s lives, and companies that take a long-term view of implementing their innovations in healthcare will be more successful.
It takes time for healthcare innovators to succeed, and AI’s place in healthcare is becoming more apparent, as shown by the type of investments in companies that utilize the technology.
“For us, it falls along two factors: how [the AI offering] supports clinical workflows and how it supports administrative workflows. Right now, we’re focused on administrative workflows,” Greeley said.
“We’re seeing that capability pretty quickly as teams embed it in their product roadmaps and have real impact. One is the prior authorization space.”
Still, Greeley says Flare Capital Partners’ focus is on innovations that don’t immediately impact patients, as they seem more accessible and safer. Still, a company’s executive team is important to funders.
Moderator Sally Frank, worldwide lead of health and life sciences at Microsoft for Startups, said she and Greeley have conferred investors consider the marriage of a good team with not such a good solution not necessarily a stellar platform that has not so good of a team.
