Text: Eeva Kiuru, Oulu Wellness Institute
OWI’s US Gateway program is on a mission to find Finnish startups different gateways to the US healthcare market. Part of this mission is to recognize important connection points in the US and make sure our developers in Finland are aware of these possibilities. In this miniseries we interview some interesting people we have met during this fall.
Here’s what we discussed:
Eeva: I’m interviewing Yossi Saadon, Senior Program Manager of the Digital Health Accelerator in New York. Hello Yossi.
Yossi: Hi Eeva, how are you ?
Eeva: Great. Please tell me, what exactly is NY eHealth Collaborative and the Digital Health Accelerator ?
Yossi: NY eHealth Collaborative is a non-profit organization with a mission to bring healthcare to all New York through health IT. We break it out into different initiatives. The main thing is to drive the adoption of health IT and electronic health records across New York state.
We also created a state-wide health IT network to allow large hospitals to exchange clinical data with each other. This is the largest clinical network in the USA. We created an API on top of that network to bring innovation and startups to develop and stimulate this ecosystem.
On top of that we developed a New York Digital Health Accelerator program together with our partners, the partnership fund for New York City. This is a 9 month program for health IT startups, usually at the later stage. We require them have a beta and potentially some customers. The companies receive 300.000 usd investment from a group of investors. They have to have a presence in New York during the program.
Our unique differentiator in the program is that we match each of the companies selected to the program with 2-4 provider mentors, so they work with large hospitals in New York State, such as New York Presbyterian Hospital, North Shore LIJ and Mount Sinai. They work with them and receive their mentorship with the goal to get a pilot launched. We had our first class graduated in May 2013. We got 17 pilots launched with the providers and the companies created over 100 jobs in New York City.
Eeva: Sounds great. Can anyone from anywhere in the world apply to your accelerator ?
Yossi: Yes of course. Actually for the first program we received over 250 applications from different states in the US and also from across the world, from England and Israel for example. There is no problem of being part of the program.
Our only condition is to have a presence during the program in New York state. So we just try to attract companies with a hope that eventually they will have enough customers so that they will stay, because we also have an economic mission to create jobs.
Eeva: Do you give funding for the companies and do you take equity of them?
Yossi: Every company accepted into the program receives up to 300.000 usd from a group of investors in a form of a convertible note. First they receive in the beginning of the program 100.000 usd. We have a mid-program check in. All the companies that meet all the requirements receive the additional 200.000 usd.
Our partners, the Partnership fund for New York City, which is a VC with an economic mission to develop the New York, is responsible to a group of investors and they created the fund and can take the equity of the companies.
Eeva: There is a huge development potential in healthcare. Are there any specific domain areas you are looking for when choosing the startups for your accelerator program ? What kind of healthcare problems are you actually trying to fix ?
Yossi: Together with the healthcare providers who are part of our program we have identified four focus areas where there is a need for improvement in healthcare system. The four focus areas are: care coordination, analytics, patient engagement and message alerts. We are looking for companies in each of those specific focus areas to help improve healthcare delivery and reduce costs in those areas.
Eeva: Those are not any small problems you are solving. What are the biggest challenges for health IT startups ? What are they mostly struggling with ?
Yossi: Startups struggle with a lot of different things. It’s admirable to see entrepreneurs come with ideas and driving them forward. I would say the biggest challenge is all about selling. It’s trying to sell what you have. It’s selling to get investors, selling to get customers.
Also the access to customers is very, very challenging if you are a company developing product for healthcare providers because those hospitals have a very slow procurement process. It takes some time to review and get their approval and push it forward. Sometimes it just gets stuck. And just because it gets stuck doesn’t mean that they don’ t need it. Access to providers is very very challenging for startups.
Eeva: Sounds great that you help exactly in those difficult areas. What about investors, are they now active in health IT ?
Yossi: We have eight different investors as part of the program. Some are classic VC’s and some more strategic. There is a lot of excitement in this field, because it’s a changing industry with the Affordable Care Act.
When industry is changing, there is always opportunities for new innovation to come in. When new innovations are about to grow investors want to be part of it and help companies grow and be part of the business development and push it forward. It’s very exciting. This whole market is being stimulated. It’s a great place to be in.
Eeva: Sounds good. Finally, Yossi, we have a very active health IT developer community in Finland. What would you like to say to our developers ?
Yossi: First of all, I admire your drive to become entrepreneurs and developers in any field. I know it’s very very challenging. Keep up. I know sometimes it looks hard. Just do your things right, push forward and things get in the right place.
I invite all of you to come check our program. We offer a lot of tools and needed resources for developers and access to providers. New York State has a lot of large hospitals and health care providers that are eager also to accept those innovations and open-minded to mentoring. That access I want to provide to you guys.
Eeva: Thank you very much, Yossi.