Health IT, Hospitals

UPMC Chief Innovation Officer talks about its investment strategy in health tech

UPMC’s most recent investment has been a majority stake in medCPU, an Israeli clinical decision support software developer.

JP Morgan Healthcare ConferenceUniversity of Pittsburgh Medical Center has led or taken part in a string of health tech startup investments in the past two weeks spanning data warehouse business Health Catalyst, behavioral health startup Lantern, and remote monitoring company Vivify Health.

Today, the integrated provider and insurer announced it agreed to acquire a majority stake in medCPU, an Israeli clinical decision support software developer. It also led a $35 million financing round to accelerate the company’s expansion in a financing round with Merck Global Health Innovation Fund. medCPU took part in the New York Digital Health accelerator a few years ago and raised a Series B round in 2015 led by Merck’s Global Health Innovation Fund.

medCPU will open an office in Pittsburgh and hire 20 engineers and other staff to work with UPMC as part of the deal. It currently works with a total of 60 hospitals.

Tal Heppenstall, president of  UPMC Enterprises, the commercialization arm of UPMC which made the investment, said in a statement on medCPU, that in the long-term, “this powerful technology will enable the development of other data-dependent applications in such critical areas as care management, population health and consumer engagement.”

In a phone interview with UPMC Chief Innovation Officer Dr. Rasu Shrestha, he talked about how these investments fit into its strategy.

He explained that there are four domains it goes after:

  • Clinical tools that leverage data to drive better decisions at the point of care;
  • Population health to help payers and providers manage risk;
  • Business services that support its infrastructure, supply chain management; technology to squeeze waste; and
  • Consumerization of healthcare.

“From our perspective as a healthcare organization, we have made a lot of investments in clinical tools. We are betting on the future of healthcare. [These technologies] will have a significant impact as far as how the future of healthcare will be written out,” Shrestha said.

UPMC enterprises regards itself is a living laboratory for the specific innovations it’s pushing forward, Shrestha added.

“We leverage strong principles of design thinking and democratic design,” Shrestha said. “On a day to day basis I am interacting with clinicians, sitting down and talking to them. We look at the market opportunities and think about how we can approach these challenges.”

He noted that Health Catalyst is a “stellar example” of leveraging data and how UPMC looks at data and getting insights through data analytics as a critical asset. UPMC and Health Catalyst forged a strategic partnership earlier this year.

Its investment in Lantern not only underscores its interest in integrating behavioral health into healthcare but it also has historical implications. Western Psychiatric Institute and Clinic is one the earliest components of UPMC.

Shrestha added: “I believe mental health is an area where there’s so much room for innovation. We are making some bets in that space.”

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