Where health system VC leaders are focusing their digital health investments

With a tough investing climate for digital health, health system venture capital leaders told Becker's they're focused more than ever on return on investment and companies that address unmet needs.

"The macro environment is helping us prioritize solutions that have a tangible ROI and can make a positive impact on patient and provider experience, treatment, outcomes and cost," said Mayank Taneja, MD, vice president of OSF Ventures, the venture capital arm of Peoria, Ill.-based OSF HealthCare.

He said OSF Ventures is focusing its investments on the increasingly popular care-at-home market, looking for "tools and technologies that can help clinicians strengthen their ability to provide care outside the walls of the hospital and to be equally effective in remote care settings."

Ballad Ventures, part of Johnson City, Tenn.-based Ballad Health, has shifted the way it assesses its investments but continues to focus on digital health and workforce initiatives.

"Given the immense pressures on health systems now in terms of staff adequacy and rapidly rising costs, an emerging theme has been a strong emphasis on hard dollar ROI," said Bo Wilkes, president of Ballad Ventures. "It doesn't impact how we view our investment thesis but places a stronger emphasis on how we evaluate opportunities moving forward."

Orlando (Fla.) Health continues to base its digital health investments on the strategy and needs of the health system, said Michael Schmidt, assistant vice president of strategic innovations at the Orlando Health Center for Innovation.

"Choosing to invest in a company is always a stringent process for us," he said. "There has to be strong alignment in a variety of areas and we have to be confident that the solution has the potential to help our care teams improve outcomes, create a better patient experience and decrease the cost of care."

Richard Mulry, president and CEO of Northwell Holdings, said his organization's mission remains taking care of "unmet needs" identified by subject matter experts at New Hyde Park, N.Y.-based Northwell Health.

He pointed to Northwell's recent investments in pediatric virtual mental healthcare (Brightline), artificial intelligence-enabled communication for people unable to speak (Cognixion), patient intake technology (Health Note), and clinician credentialing for underrepresented populations (Violet). Northwell also launched a virtual care startup, Caire, earlier this year in partnership with innovation studio Aegis Ventures.

Inception Health, the innovation arm of Milwaukee-based Froedtert Health, has been concentrating its digital health investments on what it believes to be two underserved areas: women's health and senior care, said Director Mike Maschek.

"As we look into the future, we believe AI will have a transformative impact on the healthcare industry and we are interested in companies that leverage the full power of AI in healthcare," he said.

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