Executives who spoke with Modern Healthcare said they hope their stakes will support research efforts that would eventually fuel improvements at their own organizations.
With data from Truveta, academic medical systems can conduct research into quality, safety, equity and other aspects of care delivery, said Dr. Neil Weissman, chief scientific officer at MedStar Health and president of MedStar Health Research Institute. On average, MedStar has 1,000 clinical studies open at a time.
"We need to be able to answer questions quicker and with greater accuracy," Weissman said. "To do that, we need to use data analytics on a big dataset."
Weissman said he thinks a vast dataset like Truveta, which corrals data from health systems that treat millions of patients across 40 states, could have helped scientists early on determine whether drugs like hydroxychloroquine could be used to treat COVID.
With a central source of structured data, "you should be able to answer those types of questions," Weissman said.
Truveta is building a data platform where customers can access aggregated and de-identified data from participating health systems, as well as AI and machine learning tools it develops for doctors and researchers. That could include datasets that are free, along with more complex ones that Truveta charges researchers and pharmaceutical companies to access.
Patient data will be de-identified and brought into the Truveta platform daily.
The company's earnings will "flow back to the investors," said Myerson, a former executive vice president at Microsoft Corp., stressing that health systems don't have to invest to join Truveta.
"These 17 have laid the groundwork and provided the Series A capital, but the next health system that joins doesn't have to take that equity risk," Myerson said.
New Hyde Park, N.Y.-based Northwell Health's investment into Truveta came out the system's technology budget. That budget already involves millions of dollars, including an estimated $250 million spent each year on information technology, according to Michael Dowling, Northwell's president and CEO.
"The money came out of that bucket—it comes out of basic core operations," Dowling said. "It's the right investment into data analytics."
Advocate Aurora Health, based in Downers Grove, Ill., and Milwaukee, is approaching the investment into Truveta the same way it balances other investments into innovative, future-focused efforts alongside funding core operations like clinical care, said Dr. Bobbie Byrne, the system's chief information officer.
That involves thinking through "what's the type of investment that's needed (to do) what we call 'transforming the core,'" Byrne said, which has included investing in areas like aging in place.
There's not a specific financial return that Houston-based Memorial Hermann Health System is expecting to see from its investment into Truveta, said Eric Smith, the system's chief digital officer. The decision to invest was driven by an understanding that it takes capital to create the data platform that the group of health systems wanted to build.
"Our perspective is that the returns that we'll get will be in our ability to do large-scale research" more easily, Smith said.
A spokesperson for Providence in an emailed statement highlighted the potential for Truveta to support development of new therapies.
"We believe investing in innovation that strives to make healthcare data robust and useful at scale will enable the development of critical life-saving treatments," the spokesperson wrote. "Truveta use cases include developing new drug therapies and finding creative ways to diagnose and treat rare diseases."
It's a lofty goal, and one that will require more than just bringing the data together on a regular basis.
Scientists will have to test—and validate—possible breakthroughs, which health systems then actually put into practice.
"Data by itself does not drive innovation," said Michael Abrams, managing partner at healthcare consultancy Numerof & Associates. "Every hospital is sitting on a pile of data. If that were enough to generate innovation, we'd be up to our ears in new knowledge."
Investing into a company that sells de-identified data also offers an opportunity to "monetize" data that's already being created as a byproduct of a health system's daily operations, according to Abrams, creating another possible revenue stream for health systems that hold ownership stakes in the company.
Earnings that the health systems receive from Truveta will be "invested back into the communities they serve," according to a news release from Truveta.
Still, if a health system can glean ways to improve outcomes—a particular point of importance amid a shift toward more value-based payment models—it makes sense to invest into the effort, said Rick Kes, a partner and healthcare senior analyst at audit and consulting firm RSM. That's one way to "justify an ROI on an investment like this," he said.
Kes said most organizations he works with realize they have to take occasional risks—often through their venture arms—even if there's a chance the effort doesn't turn out the way they hope.
In 2020, healthcare provider organizations were the most common type of corporate investors in digital health companies, according to data compiled by Rock Health, an early-stage digital health venture fund that also compiles research on the sector. In fact, providers accounted for 30% of digital health deals by corporate investors.
"I've heard several executives say, 'we don't want to be the Blockbuster of healthcare—we don't want to be the one that didn't innovate (and) didn't challenge ourselves,'" Kes said. They say, "'we want to be the ones that are advancing.'"