When Cedars-Sinai Health System launched a program last year to help young companies get off the ground, it received 500 applications for 11 spots.
The Los Angeles-based academic medical center, which is partnering with Techstars, an organization that provides guidance to startups, saw mentoring entrepreneurs as part of its community benefit mission and also as a way to keep pace with the wave of innovation that's transforming healthcare delivery—much of it driven by consumer demand.
“We're seeing more and more expectations that technology can really uplift people's lives in healthcare,” said Omkar Kulkarni, who directs the accelerator program. “Health systems like Cedars-Sinai are learning how to speed up.
”A good portion of the new investments in digital health over the past two years have come from end users of the technology. The number of health systems setting up their own venture capital arms has exploded, with hospital groups seeking both commercial success and the possibility of discovering technologies that will help solve their business problems.
The health systems going down this path have moved well beyond passive investment. They are becoming incubators and accelerators, guiding young companies and entrepreneurs through the healthcare regulatory and commercial maze. “They're investing more and more, and at an earlier stage than ever before,” said Unity Stoakes, president and co-founder of StartUp Health, which invests in and coaches digital-health hopefuls. “It reminds us of 1995 Internet when Netscape first IPO'ed.