How Providence St. Joseph Health's venture fund approaches digital innovation

Aaron Martin brings more than 20 years of experience in technology and strategy to his roles as executive vice president and chief digital officer at Providence St. Joseph Health and managing general partner at Providence Ventures, the health system's venture capital arm.

The corporate innovation fund is part of PSJH's Digital Innovation Group, which drives the Renton, Wash.-based health system's progress and initiatives toward enhancing digital innovation. Operating under DIG, Providence Ventures is tasked with generating strategic and financial returns for PSJH by investing in companies and initiatives aimed toward using technology to solve healthcare issues.

Here, Mr. Martin discusses Providence Venture's strategy for approaching investment opportunities and how he helps support innovation within the group.

Editor's Note: Responses have been lightly edited for clarity and length.

Question: What factors does Providence Ventures consider when searching for new investment opportunities?

Aaron Martin: First and foremost, the team focuses on areas of strategic priority for the system — in other words, finding companies that address or solve the big problems that the organization is facing and wants to solve. In addition, they ensure that the fund has financial return targets that it aims to achieve with the portfolio of investments. By focusing on these large priorities, we believe we're defining a valuable market space, which will de-risk our investments.

Q: How do you promote innovation within Providence Ventures?

AM: Providence Ventures is a key component of a larger innovation model, which is PSJH's Digital Innovation Group. DIG is a team of about 200 people who are responsible for an innovation model that starts with working with our clinical, operations and subject matter experts in the organization to size and prioritize the largest opportunities and problems we have and how we are able to leverage digital technologies.

When we've identified these 'needle movers,' as we call them; we run them through a very deliberate process in which we determine first if we already have a solution to the problem we've already licensed. If not, we get Providence Ventures and Avia, which is a network of health systems focused on digital innovation and transformation, involved to help us find the 'best of breed' company that has solved the problem or is on track to doing so. If it makes sense, Providence Ventures will invest in the company. If we don't already have a digital solution or we can't find one, we'll build the solution and spin it out as a company. We've done this twice before with Xealth and Circle/Wildflower, and we're currently working on a third spinout. Ultimately, Providence Ventures plays a role in financing these spin outs.

Q: What technology do you think will significantly impact the healthcare industry in the next five years?

AM: Artificial intelligence and related technologies such as natural language processing and machine learning will begin demonstrating value across several different segments and use cases in the healthcare industry. For instance, voice technology that uses natural language understanding and natural language processing will increasingly play important roles with providers and patients.

With providers we believe the in-clinic potential of voice technology can reduce technology burden on providers, for example through automation of documentation and charting. For patients and consumers of healthcare, whether it be in clinical settings like hospital rooms controlled via voice, or in their homes through smart speakers like Alexa and Google, consumers who are increasingly getting used to voice as a mechanism for doing other things can also use it to get their healthcare needs met, such as booking appointments and getting messages from their providers. As an example, PSJH was one of six healthcare organizations to launch a HIPAA Amazon Alexa skill.

Additionally, AI can power robots that can support patients and consumers in navigating the complex health system structure. Whether it be just looking for the right setting of care that matches a patient's needs, whether they are geographic, clinical or other, or actually doing triage, diagnosis and treatment, AI-powered robots can get patients the information they need quickly and efficiently. At PSJH, we've built very early versions of AI-powered robots that help navigate patients to the right care venue.

To participate in future Becker's Q&As, contact Jackie Drees at jdrees@beckershealthcare.com.

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