Collaboration is one of those concepts that everyone can agree is something we should strive for in our personal and professional lives. The outcome from collaboration is always perceived to be better than going it alone.
Healthcare has recently taken steps toward a more collaborative approach to creating better patient experiences. Healthcare providers and insurers are working with and listening to their customers—the patients. It can improve communication between a patient and their physician, which leads to better outcomes. Often times, hospitals and healthcare providers look to new, innovative technology to diagnose, treat and communicate with their patients. In a recent trend, called collaborative healthcare investing, these institutions are not only trying out new technology, they are also investing in these companies and forming co-development partnerships.
In healthcare, we talk about the Triple Aim: provide better patient care, improve population health and reduce the per capita cost of healthcare. This type of collaborative healthcare investing can serve the Triple Aim while also having the potential to get a high return on investment and expanding the brand. Major healthcare providers like Kaiser Permanente, Mayo Clinic, Intermountain Health and UPMC all have investment arms and enter into deals alongside VCs, corporate partners and other healthcare systems.
Investments can vary including healthcare IT and healthcare services (e.g. physician management) or medical devices and specialty products (e.g. OTC drugs) within a health system. The investing helps the health system to scale and accelerate their growth or increase efficiency and improve the patient experience. For startups, when they have a healthcare provider as an investor, they are getting more than just a check. They are connecting with clinical subject matter experts and getting critical feedback and validation of their technology.
Healthcare companies partnering with healthcare providers is not a new concept—all new medical devices and medicine must go through rigorous clinical trials and regulatory approval. However, healthcare providers as investors, co-developers and partnering with each other to share due diligence, testing and implementation is definitely a recent trend with a lot of upside. Investors (e.g. VCs, angel investors and entrepreneurs) are looking for ways to decrease their risk and maximize the return on investment(s). Collaborative healthcare investing partners can provide many additional benefits for investors and the companies they are investing in.
Erik Halvorsen is the Chief Business & Strategy Officer at FAR Biotech. As a result of his industry experience, Erik is an often sought-after public speaker, and he has served as an advisor to various hospitals and start-ups. He is constantly looking for new ways to improve patients’ lives while changing the broader healthcare industry for the better. He has been referred to as a “translator,” in that he has the ability to speak science with businesspeople and speak business with science people.