Health IT, MedCity Influencers, Payers, Startups

Avado Health 1 of 8 startups selected by 21 large NY providers for accelerator class

The New York Digital Health Accelerator stands out among the health-centric programs not only because of the $300,000 that each startup receives but because of the opportunity to work with major providers who see that major change is required.

With the explosion of startup incubator/accelerators everywhere including healthcare, there’s one that stands out in my mind. It’s the NY Digital Health Accelerator. Full disclosure: My company was selected for it. I think the various early stage accelerators (RockHealth, Blueprint Health, etc.) are great, however they are geared towards very, very early stage ventures versus the more mature companies in the NYDHA. Here’s why I think the NYDHA is unique.

New requirements, new vendors
Leading healthcare providers recognize that the myriad new requirements such as fee-for-value, Stage 2 Meaningful Use, medical/health homes, etc. demand new systems. Since the keys to success in the emerging models are often the opposite of the present/past models, it’s clear to them that healthIT systems designed for the old model won’t address the new requirements, particularly while those vendors have their hands full with simply getting providers on EHRs. As a recent Healthcare IT News article outlined when they interviewed an industry visionary, Shahid Shah, software analyst and author of the blog, The Health IT Guy. “The EHR systems and IT required for MU is a quite different from what will be required for ACOs,” Shah saidd. “It will be nowhere as easy for existing legacy EHRs to simply retool their current platforms, like they did for MU.” With that said, Shah outlines 9 ways future EHRs need to support new accountable models.

Large providers winnow 100s down to 8
The 21 biggest healthcare providers in NY state (hospitals, home health, etc.) are deeply committed to the program at the most senior levels. While they don’t guarantee that they’ll purchase from the startups, the program matches the providers who have a particular need with the companies. Just 3 weeks into the program, we already have a “company maker” deal that has closed. It’s a huge deal that is likely to get replicated based on interest from other providers. The selection of which companies made it into the program was done by 50+ senior execs (e.g., Chief Medical Informatics Officers) from the 21 providers. The VC and strategic investors who were in the room said that process alone made it worth the entire program as they heard exactly what senior decision makers want to buy or not. Interestingly, when they announced the program, they said they were going to have 12 companies. They only selected 8 as they could only agree that 8 out of the 250+ that applied were fitting a real need that they had.

Largest support of any startup accelerator
The aforementioned investors (list is also on their website) put in the money which is $300,000 per company that is also — by far — the largest of any of the programs. It’s a 9 month program reflecting that decision processes are quite a bit longer in healthcare. It’s modeled after the highly successful FinTech Innovation Lab that the NY City Investment Fund (a double bottomline investment fund) has run the last couple years. As with financial services, they bring in the largest customers deeply into the process.

Major changes in NY demand new infrastructure
This program was put in place for a few reasons. The biggest is the state of NY is doing a major thing in moving 5 million Medicaid patients to managed care programs as they want to kill the flawed fee-for-service market that costs the state enormous dollars every year — $50B! The state and providers recognized they wouldn’t get what they needed from legacy vendors so wanted to facilitate the next generation and want NYC to be a hub for that activity.

Avado feels especially honored as we were the only company selected that isn’t in the NY metro area. The companies are being highlighted today at the Digital Health Conference where providers from all over the region come. Even if we weren’t participating in this program, I would be highlight this program as unique not only in healthcare but in the tech industry as a whole.


Dave Chase

Dave Chase has launched several new businesses, initially from within Microsoft. He founded Microsoft’s Healthcare business and gained deep experience in the healthcare industry as a senior consultant for Accenture's Healthcare practice. He can be found at @chasedave.

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