By: Beth A. Brooks, PhD, RN, FACHE
For the past two years I have served as a mentor at MATTER, a health care technology incubator and accelerator in Chicago. MATTER is incubating 200 start-ups, companies that offer medical devices, pharmaceutical and diagnostic solutions, big data analytics, virtual and augmented reality, artificial intelligence (including voice activated), and patient education solutions, along with health, wellness, and care coordination. I noticed that many of these start-ups have only physicians on their advisory boards, even when the specific issue requires more of a nursing care solution (e.g., care coordination, patient education).
The few successful health care start-ups have actually done very little to improve access, quality, or cost issues for the population at large, focusing instead on more healthy and higher socioeconomic status health care consumers (Savafi et al., 2019). How different would this picture be if more nurses, nursing students, and colleges of nursing were involved in the health care technology ecosystem?
Incubators and accelerators like MATTER are only one part of the health care technology ecosystem. Others in the ecosystem include patients and families, pharmaceutical, bio-tech, medical device and software companies, payers, universities, health care systems and professionals, entrepreneurs, and investors. As some of these terms may be
unfamiliar, this post provides definitions to familiarize faculty with the health care technology ecosystem
Incubators and accelerators are organizations designed to help entrepreneurs grow and develop their start-up companies by providing resources. including mentoring and investment and even funding. Typically, one organization serves as both an incubator and accelerator. By integrating these resources and others, such as office space and conference rooms into a single location, they provide a sense of community and connection to other entrepreneurs, mentors, and advisors, resulting in an ideal environment for an entrepreneur to “incubate” an idea. Incubating an idea is exactly what it sounds like—the act of causing or aiding in its development. If the idea requires the building of a prototype, the incubator provides a “makerspace” for tinkering. Some incubators even have mock hospital rooms for idea testing.
Many incubators also function as accelerators. Here the focus is on providing the resources and services designed to hasten or “accelerate” the idea’s development into a product or service that is ready to be sold on the market. Incubators offer workshops on a variety of topics such as building relationships with payers, providers, and pharmaceutical companies. Experts in their fields provide instruction in areas such as big data, artificial intelligence (AI), supply chains, or the challenges of navigating C-suite decision-making. Also available are how-to services for developing marketing and sales plans, advice on scaling (i.e., growing) the business, building financial models, even introductions to experts with an interest in serving on the start-up company’s advisory board (a great opportunity for faculty). Incubators/accelerators also offer “Shark Tank-like” competitions, conduct seminars on perfecting the “business pitch” to investors, and will also convene investors for “meet and greet” events.
Investors are the funding source for start-up companies. Nurse entrepreneurs (NEs) may initially need to start a company by bootstrapping, i.e., using their own or money from friends and family to launch the company. But those funding streams eventually run dry so the entrepreneur will need to seek out angel investors. Angel investors provide capital (sometimes called seed funding) for the start-up, usually in exchange for ownership equity or convertible debt (shares of the company). Angel investors typically provide financial support during the early stages of the start-up prior to investing opportunities being made available to others. Venture capital (VC) is a form of private equity and a means of financial support that investors provide to start-up companies and small businesses believed to have long-term potential.
While ranges vary, some reports suggest that investors spent $8.8 billion on digital health start-up companies in 2019, yet many start-ups failed. An article in Fast Company describes a key reason why start-ups continue to fail: some entrepreneurs neglect to engage with bedside providers, patients, and families to identify the actual problems (Yock, 2018). Making this situation worse are those companies delivering solutions based on spurious claims drawn from so-called “stealth research,” something that should concern all investors, payers, care providers, and consumers. Cristea,
Cahan, and Ioannidis (2019) tell how such companies using stealth or gray research to support their claims and choose to ignore more appropriate peer-reviewed, empirical research. Given these (and other) knowledge gaps experienced by entrepreneurs, the expertise of nurses would benefit the health care technology ecosystem tremendously.
In a second blog I will share ideas on how to incorporate aspects of the health care technology ecosystem into college programs, curricula design, and course activities. Suggestions will be appropriate for both senior baccalaureate students as well as graduate students in nursing.
Cristea, I.A., Cahan, E.M., & Ioannidis, J.P.A. (2019). Stealth research: Lack of peer-reviewed evidence from healthcare unicorns. European Journal of Clinical Investigation, 49(4), e13072. doi:10.1111/eci.13072
Safavi, K., Mathews, S.C., Bates, D.W., Dorsey, E.R., & Cohen, A.B. (2019). Top-funded digital health companies and their impact on high-burden, high-cost conditions. Health Affairs, 38(1), 115-123. doi:10.1377/hlthaff.2018.05081
Yock, P. (2018, October). Why do digital health start-ups keep failing? Fast Company. https://www.fastcompany.com/ 90251795/why-do-digital-health-startups-keep-failing