investment
How General Catalyst helps WellSpan invest
WellSpan Health earlier this month announced it's working to develop new health technology applications with General Catalyst's (GC) HATCo. A closer look at the deal underscores how the health system stands to win both medically and financially through its cozy relationship with the venture capital giant.
The trend: A growing number of nonprofit health systems are teaming up with venture firms on for-profit businesses. Aegis Ventures this week announced that Yale New Haven Health System, Keck Medicine of USC, and Hartford HealthCare joined its Digital Consortium that seeks to develop AI health care solutions. Earlier this year, I wrote about Cedars-Sinai's plan to create companies with Redesign Health.
"We created a couple of our own companies several years ago, really small companies that we deployed for a while," WellSpan CEO Roxanna Gapstur told me. "But what we know about most health care systems is the kind of talent that we have internally isn't really the talent that you need for startups."
Backstory: WellSpan operates nine hospitals serving Pennsylvania and Maryland, and its relationship with GC goes back three years to a higher-level collaborative the venture firm announced with over a dozen health systems. HATCo, or Health Assurance Transformation Company, is a GC venture that's in the process of acquiring Ohio-based health system Summa Health.
The plan: Gapstur told me that under the new deal, WellSpan will work with HATCo to develop a three-year roadmap for solutions they would like to "co-create."
Getting in on the action: While some of the solutions developed through the partnership may be sourced from existing GC companies, Gapstur said it's also possible that all this ideation may result in entirely new companies backed by WellSpan investment. She said guidance on where to invest was part of the appeal of working with GC. WellSpan also has connections to Andreessen Horowitz and 7wireVentures.
These investments are already happening: WellSpan touted how it works with GC-backed Aidoc and Hippocratic AI. The health system is actually an investor in both, too.
Use cases so far: WellSpan uses Aidoc's tech that helps analyze mammograms and other imaging, and it has used Hippocratic AI's agent, Anna, to conduct more than a million phone calls to aid with tasks like colonoscopy prep and surgical pre-operative calls in Spanish.
What's the future? Gapstur said WellSpan hopes to develop solutions to automate administrative tasks, like revenue cycle management; for workforce augmentation, where AI can improve the performance of humans, like Aidoc's radiology solutions; and for care navigation, to help "navigate people through the system in a way that feels personal, simple, [and] friendly."
Health tech news roundup
- The Food and Drug Administration warned Hims & Hers over "false or misleading" advertising as part of a broad crackdown on drug marketing undertaken by the agency, the New York Times reported. In an opinion essay over the weekend, commissioner Marty Makary wrote that the company "ran a Super Bowl ad parading the benefits of GLP-1 drugs without any mention of side effects," something STAT's Katie Palmer pointed out in January.
- This one is fun: Luminopia, maker of a VR headset-based treatment device that treats childhood lazy eye while letting kids watch entertaining content, has a new deal to bring Pokemon to the device.
- Conceivable Life Sciences raised a $50 million Series A round to launch its "AI-powered automated IVF lab." The round was led by Advance Venture Partners.
- Inbox Health raised a $22 million Series B round for its billing communications platform. The funding was led by Ten Coves Capital. Inbox Health says that more than 2,600 medical practices use it tech.
- GE HealthCare acquired Icometrix, maker of AI tech for analyzing MRIs. The acquisition was announced just days after I wrote about a Duke experiment with Icobrain Aria, the company's product that helps clinicians spot brain abnormalities that are a dangerous side effect of Alzheimer's drug therapies. That's right! They call me the deal whisperer. If I write about your company, it will be acquired.
- Penguin AI raised a $25 million Series A round led by Greycroft. The company develops AI products to tackle administrative tasks for both payers and providers.
- Goodpath, a virtual chronic care company, raised an $18 million Series A round led by MassMutual Ventures.
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