What New York Digital Health Accelerator's First-Year Results Reveal About the Health IT Market

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The New York Digital Health Accelerator, aimed at helping startup and growth-stage health IT companies find footing in the market, was created following a "perfect storm" of available, motivated stakeholders and the necessary resources, says Anuj Desai, vice president of market development at New York eHealth Collaborative, one of the leaders of the accelerator.

The New York eHealth Collaborative, a nonprofit organization dedicated to fostering the adoption of health IT throughout the state, has the resources to help developers create the solutions providers need ahead of the transition to value-based reimbursements, meaningful use stage 2 and other aspects of healthcare reform. NYeC runs the Statewide Health Information Network for New York, a statewide health information exchange that currently has about 72 percent of the state's hospitals connected. NYeC has strong relationships with all these providers, giving up-and-coming vendors a much-needed foot in the door.

"All the companies told us one of their biggest challenges was getting access to large customers," says Mr. Desai. "They couldn't get past LinkedIn" and get in touch with decision-makers at the hospitals and health systems, he says. "We saw an opportunity to bring these stakeholders together."

The Partnership Fund for New York City helped bring the program to life with a desire, and the funding, to lure technology companies to the city. The Fund brought both additional funding and more investors to the project.

"It all came together perfectly," says Mr. Desai.

The nine-month NYDHA program focuses on companies in the growth stage — "they all have a product before they come to the program," says Mr. Desai. The 23 healthcare providers participating in the program, including prominent providers such as New York-Presbyterian Hospital and NYU Langone Medical Center in New York City, are able to select the company they want to work with to develop and test their product.      

Eight companies were selected to participate in NYDHA's first year. Each company received $100,000 following acceptance into the program and spent the next four to five months working with providers to launch a total of 17 pilot programs to test and refine their products. The companies were also mentored by investors and executives from the health insurance, pharmaceutical and health IT entrepreneurial sectors. All the companies came back together halfway through the program to evaluate progress so far, and at this point each company received an additional $200,000.

Many of the companies found success following the program. Cureatr, a mobile care coordination solution vendor, raised $5.7 million in Series A financing. CipherHealth, a vendor of post-discharge engagement solutions, signed 20 hospitals in one quarter after the program ended. Avado, a developer of cloud-based patient relationship management software, was recently acquired by WebMD. Together, the eight companies in NYDHA's first year raised a total of $11.4 million in post-program funding and significantly expanded their customer base.

The program's applicants and success stories reveal current and future trends in the health IT market. "Care coordination is a huge trend," says Mr. Desai. The program received more than 250 applications from companies developing tools or applications to help providers coordinate care. "There are a lot of companies in this space," he says, but the successes of the program's care coordination solutions developers show there's still opportunity for success in this space as well. "It's one of the strongest areas in health IT right now," he says.

Mr. Desai has also noticed an increase in companies, like Avado, focused on patient engagement strategies. "Patient engagement is really the Holy Grail in healthcare — providers haven't quite figured out the optimal model," he says. Many providers have begun to foster engagement with patients with chronic conditions such as diabetes and have found limited success.

There is also a need for data analytics solutions, says Mr. Desai, but existing conditions may prevent startups from being successful in this area. A lack of inherent interoperability in many electronic health record systems makes developing a compatible solution difficult. "Also, a lot of these larger providers are already in bed with a larger vendor," says Mr. Desai. "For them to change to a startup would be a huge investment," one he is unsure many would be willing to make.

The new class in the NYDHA will begin in the first quarter next year, with a focus on companies specializing in care coordination and patient engagement. An application programming interface for SHIN-NY is set to launch in December, giving developers access to information on the HIE within regulatory frameworks. Mr. Desai hopes the program will continue to help providers "find the right tools for success."

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