Tradition-bound healthcare is learning a few things in Austin’s innovation-focused atmosphere

South by Southwest—the hip Austin, Texas, festival known for bringing together new music, films and technologies—hosted an unexpected guest this year: the American Hospital Association.

AHA leaders sat on panels related to access to care, innovative partnerships and “must-haves” for future healthcare leaders at the 2019 event, which took place March 8-17.

The AHA’s presence marked the first time the association officially participated in sessions at SXSW, though some teams attended the event last year.

“We wanted to offer the public a view of how hospitals and health systems are redefining the 'H' to better serve their communities,” said Dr. Jay Bhatt, AHA’s senior vice president and chief medical officer, who sat on a panel about telehealth and in-home care.

SXSW, a 32-year-old festival which started as a regional event to celebrate Austin’s art community, added its Health & MedTech track in 2014 to reflect the city’s growing healthcare market, according to Hugh Forrest, SXSW’s chief programming officer. 

Fast-forward to 2019, and the festival is hosting 100-plus sessions on the track, with sponsorship from Kaiser Permanente and participation from major hospital groups. Modern Healthcare has also been a part of SXSW, with Publisher Fawn Lopez participating in a 2017 panel on advances in healthcare technology.

The health addition puts SXSW in competition with some of healthcare’s long-established players. “2018 was a little bit challenging because the HIMSS event in Las Vegas literally backed up to our event, with their last day being the first day of SXSW,” Forrest said. “One of the biggest lessons we’ve learned is that we can get a lot more buy-in when we’re not backed up against one of these really big events.”

Austin as a whole is building a name for itself as a national innovation hub, anchored by technology giants such as Amazon, Dell, IBM, Intel and Oracle, all of which have major presences in the city. 

Apple—which already employs 6,200 in Austin—unveiled plans just three months ago to open a $1 billion campus within the city’s limits, with a goal to be the largest private employer in Austin.

This innovative reputation is one reason the city can call itself one of the fastest-growing regions in the U.S. The larger Austin metropolitan area has the ninth fastest-growing population in the country, according to estimates from the U.S. Census Bureau, and in 2017, Austin boasted a population of nearly 917,000 within its city limits—up 10,000 residents from just a year before, according to separate estimates released by the agency.

“The city is growing so rapidly,” said Craig Cordola, CEO of Ascension Texas. Ascension’s main presence in Austin is through Seton Healthcare Family, a health system it has owned since the 1990s. “We have about 140 (people) per day who are moving to central Texas,” Cordola added.

That statistic, that 150-some new residents move to the city each day, is an oft-repeated refrain. It’s based on a breakdown of the 55,269 residents that the larger Austin metropolitan area gained between 2016 and 2017—and is indicative of the growing population pressure that city residents are feeling.

For Austin, population growth means a more crowded city. 

For hospitals, it means an expanding and relatively young patient population—and one that tends to be captivated by the city’s innovative reputation. 

That means providers will have to deliver care in new ways.

The median age in Austin’s metro area is 35, three years younger than the national figure, and millennials—who are known for being dissatisfied with traditional healthcare services nationwide—made up 22% of the city’s population in 2017.

“The rapid growth that the city is seeing obviously demands more healthcare resources,” Cordola said. “I’m seeing a rapid development (across healthcare) to expand to meet patients where they are, given the growth of the city.”

Austin hasn’t always been the Southern tech metropolis it’s known as today. Those who spoke with Modern Healthcare cited such milestones as the 1984 launch of Dell, then called PC’s Limited, and the formation of SEMATECH, a chip manufacturing consortium that debuted in Austin in the late 1980s, as seminal to the city’s reputation.

Dr. Norman Chenven, CEO and founder of the Austin Regional Clinic, said that the technology landscape was much different in 1973, when he first moved to the city. “There were a couple of technology companies in Austin, but it was more industrial technology,” he said. That all changed in the 1980s. “All of a sudden, Austin was on the map.” 

“Having Dell, which started with Michael Dell hand-building computers in his dorm (at the University of Texas at Austin)—it created a lot of excitement,” said Chenven, who also serves as vice chair of the Austin Healthcare Council, a not-for-profit industry association. “Dell grew into a monster company very rapidly.”

With more than three decades of innovation under the city’s belt, technology now feels baked into the DNA of nearly every industry in Austin. That’s a testament to the city’s collaborative nature, according to Dr. Lisa McDonald, director of healthcare at the Austin Technology Incubator, which is affiliated with UT Austin.

In healthcare, nowhere is this tech history more pronounced than UT Austin’s Dell Medical School. The school, the city’s only medical school, is named for the Michael & Susan Dell Foundation—which pledged $50 million as part of a naming grant. The school admitted its first class in 2016.

“The school’s mission is derived from Austin’s creative, tech-forward DNA,” said Dr. Clay Johnston, the school’s dean. “About a quarter of our students are getting MBAs while in med school and several others will get master’s degrees in engineering. Several others are in the design program and are building solutions to a variety of health problems.”

The technology scene in Austin often seeps into healthcare by proximity.

Charles Barnett, a former CEO of Seton Healthcare, said local connections fueled collaboration during his time leading the health system. He recalls working on a proof-of-concept related to congestive heart failure readmissions with IBM’s artificial-intelligence arm Watson after meeting IBM Watson team members at a local business meeting.

“We’re seeing the tech community is really interested in helping to identify ways to support improvements in healthcare processes,” Barnett said.

This convergence between healthcare and technology companies is what the Austin Healthcare Council is placing its bets on. The council, founded two years ago and now chaired by Barnett, brings together more than 50 groups, including hospitals, insurers, consultancies, tech firms and venture capitalists, bound together by a vision to establish Austin as a national healthcare innovation hub.

In 2018, the council began its support of Modern Healthcare’s Transformation Summit conference, which gathers senior leaders from all industry sectors, focusing on efforts to drive transformation within their own organizations.

“Our platform is for cross-pollination of ideas,” said Gus Cardenas, CEO and co-founder of the council. “Our challenge is to find the right blend of the (healthcare, entrepreneur and technology) sectors.”

The promise of a tech talent pool paired with a growing healthcare workforce has already drawn new life sciences startups to Austin, according to McDonald, who pointed to Cloud 9 as an example of a startup improving access to care in the city. One of the startup’s founders, JC Adams, moved to Austin nearly five years ago to launch the company after struggling to establish a team in New York.

“I had a friend in Austin who seemed to have the ability to pull together the tech talent,” said Adams, who now serves as CEO of the app-based mental healthcare startup. “Learning about the growing health community, with the new medical school, also made me think this would be a good place to launch a digital health company.”

For one health system that’s been expanding its presence into the Austin region over the past few years, it’s the people—the tech-savvy population—who have set the city apart.

“Austin gives us a population that’s very progressive with technology, which gives us the ability to try new things,” said Nick Reddy, chief digital officer at Dallas-based Baylor Scott & White Health. That’s why the system is using its Austin sites as a testing ground for its more innovative project ideas, such as on-demand home visits and virtual care. The successful projects are then scaled across the health system, Reddy said.

Local healthcare organizations agreed that setting up new facilities was an integral part of addressing Austin’s population growth. But Austin’s reputation for innovation also provides a backdrop for groups eyeing new ways to manage the city’s expanding patient pool. New types of care delivery services are emerging nationwide, “but Austin may be a foot or two ahead of the curve,” Chenven said. 

Austin Regional Clinic, for example, has a telemedicine program that Chenven’s team is working to roll out on a direct-to-consumer level.

Last November, Seton Healthcare opened AscensionConnect, a 30,000-square-foot facility that serves as a hub for the health system’s virtual-care services, including its remote monitoring, telemedicine and home visit programs. Austin’s technology reputation proved helpful when recruiting talent for AscensionConnect, Cordola said.

“A lot of really smart, young software developers and engineers are coming here, some of whom are in the healthcare space,” he said, adding that Austin’s reputation has become a benefit for Ascension systemwide. “The talent pool for us is great,” he said. “AscensionConnect, which is heavy on IT and infrastructure, is expanding to be a regional hub for all of Ascension, not just the Texas marketplace. We can do that in large part because of the talent we can attract to Austin.”

Baylor Scott & White is also moving care outside of the hospital as part of its virtual-care strategy, which includes a direct-to-consumer telemedicine service. But Reddy said that while the program is part of the health system’s strategy to scale its services in Austin, ramping up virtual care is more about meeting patients where they are and addressing changing patient preferences—such as engaging the technologically progressive crowd that helps the health system innovate.

“Austin is attracting a lot of individuals who are very tech-savvy, and that’s now one of the characteristics for expectations of people that live here,” he said.