Health IT, Startups

Emmi Solutions founder: Healthcare organizations and the investment community need to be more closely aligned

Jordan Dolin, who founded Emmi Solutions which was sold to Wolters Kluwer in a $170 million deal last year, also talked about a fund he cofounded to invest in early stage healthcare startups at MedCity INVEST.

Jordan Dolin, Founder Furthur Fund at MedCity INVEST 2017

Jordan Dolin, Founder of Emmi Solutions and Furthur Fund at MedCity INVEST 2017

One of the biggest problems in healthcare, as serial entrepreneur and investor Jordan Dolin sees it, is that many investment arms of healthcare organizations are not aligned with the priorities of the hospitals they support, creating a disconnect between their investment strategy and the health systems. Dolin talked about this issue and how he hopes to address it with a new fund at the MedCity INVEST conference last week.

The mentor-in-residence at Chicago healthcare incubator MATTER said the $35 million “Furthur Fund” will invest in 15 early stage healthcare startups seeking to fulfill the Triple Aim in healthcare — improving the patient experience,  population health and reduce costs. The fund, cofounded with venture capitalist James Crawford, is seeking healthcare organizations to invest in it and serve as partners. In a conversation after the conference, Dolin described Furthur more as a platform to foster a fund. It follows the sale of Emmi Solutions, a patient engagement business Dolin founded, to Dutch publisher Wolters Kluwer in a $170 million deal last year.

The origins of the fund’s name, for the philistines among you, derive from the bus Ken Kesey drove cross country with the Merry Pranksters in 1964.

Commenting on the disconnect between the investor community and healthcare organizations, Dolin admitted that as an entrepreneur he tends to see issues in black and white rather than the gray area that colors many healthcare issues. He contended in his keynote speech that the vast majority of the largest venture-backed exits don’t address any aspect of the triple aim. For example, he noted that specialty drugs, a segment that has attracted a great deal of investor attention in recent years, have been the single biggest driver of healthcare costs.

The merits of population health compared with precision medicine is an ongoing debate in healthcare and is part of a broader ethical issue in healthcare and other industries: how to best balance the needs of the few with the needs of the many.

Among other reasons he highlighted, Dolin noted that venture investors have an interest in disruption that doesn’t necessarily fit well within healthcare. He also speculated that there was so much money on the sidelines that investors can’t afford to invest small.

One example of the kind of companies Dolin has in mind is Regroup Therapy, a company founded and led by David Cohn that seeks to address the shortage of behavioral health providers with a virtual model. Further Fund invested $1 million in the company, marking the fund’s first investment and Dolin sits on the board. Depression and other behavioral health issues can drive up healthcare costs for people with chronic disease because they interfere with the patient’s ability to adhere to their care plan.

“At the end of the day, the investment community and needs of hospitals are completely detached…In many cases, they are investing in things that actually raise costs,” Dolin said. “The point is, if you completely align them, you’ll make a lot more money and it’s better for you because all of you, at some point, will go from [being] vendors to consumers in healthcare.

“My message to investor organizations is if you focus on the need of the organizations, you have a better built-in customer base and in the long run you are actually creating value and that’s really the point…Things which are unfundable, by many standards are where the best opportunities lie.”