BOULDER, CO – The founders of Boomtown, a Boulder-based business accelerator, closely followed developments in the field of digital health for several years, waiting for the right time to begin investing in the innovative startups that were trying to transform healthcare with digital health technology. In 2015, when digital health funding – which had exceeded four billion dollars the year before – showed no signs of slowing, Boomtown partnered with Colorado Permanente Medical Group (CPMG) and launched the Boomtown Health-Tech Accelerator.
“Healthcare technology is really taking the world by storm right now,” said Tom Base, the Managing Director of the Boomtown Health-Tech Accelerator. “There’s been a confluence of events – the ACA and other regulatory changes, and the fact that more and more entrepreneurs are showing an interest in healthcare technology – that have made now the right time to launch this accelerator.”
According to Base, Boomtown’s partnership with CPMG, a Colorado-based provider group that has close to 1,200 practicing physicians in its organization, played a pivotal role in the founding of the Boomtown Health-Tech Accelerator.
“Across the country, entrepreneurs are developing really great products, but they don’t necessarily have a deep understanding of the healthcare market. Having a partner like CPMG gives us the ability to validate their ideas.”
As a member of Boomtown’s investment committee, CPMG takes part in deciding which early-stage companies are accepted into the health-tech accelerator. According to Base, the provider group prefers startups working on technologies that simultaneously improve health, reduce costs, and – most importantly for CPMG, which provides care to the 650,000 Kaiser Permanente members in Colorado – enhance the experience of healthcare for patients.
“As physicians we know that healthcare is going to change dramatically over the next five to ten years,” explained Dr. Katie Richardson, a pediatrician and the Director of Physician Experience at CPMG. “Technology innovation is going to be a big part of that change, and I think it’s important for physicians to play a role in its development.”
With the number of digital health startups steadily increasing as the market for their products quickly matures, Base and Dr. Richardson are betting that by matching Boomtown’s record of success with CPMG’s resources and expertise, the Boomtown Health-Tech Accelerator will produce companies that just might fundamentally transform healthcare as we know it.
Helping Startups Find Their Way
Startups selected by the Boomtown Health-Tech Accelerator go through an intensive twelve-week program designed to help them refine their business models, develop their products, and gain a deeper sense of their target markets. According to the accelerator’s website, startups receive an initial investment of $20,000 from Boomtown and enjoy over $700,000 in perks during the program.
“It can be very eye-opening during the first couple of weeks,” admitted Base. “Once the founders of a startup talk to a potential customer and have to answer the tough questions of who is going to pay for this and how will it be used, they often do a pivot of some kind. But that’s good. It’s all part of the process.”
Startups accepted into the accelerator receive guidance from leading figures in the Colorado digital health community, like Mike Biselli of Catalyst HTI, and Kevin Riddleberger of DispatchHealth. Several of Boomtown’s mentors also come from CPMG, and include physicians of all kinds, as well as experts in healthcare regulation and finance.
Yet what makes the Boomtown Health-Tech Accelerator unique is the opportunity that CPMG provides startups to begin testing the efficacy of their products in the healthcare system.
“The ability for anyone in our cohort to utilize the CPMG platform to do a pilot, a clinical study, or even a validation study is more valuable than any seed stage funding they could get. Having that stamp of approval from CPMG gives them something of significance to take to investors.”
Innovators With A Future
The Boomtown Health-Tech Accelerator’s investment committee scrutinized digital health startups from around the country when considering which applicants to accept into its inaugural class, which began on January 25th of this year. The four companies chosen to join its first cohort are all working on innovations that take unique approaches to addressing the needs of the healthcare system.
Agathos is developing a clinical decision support system that generates a comprehensive sense of both the clinical and financial outcomes of care. Mindful Labs has devised a novel cortisol test that uses hair to achieve a more accurate indicator of stress levels. Patientory is creating a “Facebook for Healthcare” to provide support to patients with serious diseases. And Visible Hand is focused on improving the delivery of behavioral healthcare from the bottom up.
“Many of the high-level people in behavioral health are frustrated because they don’t have a way of changing how the direct care staff interacts with patients,” said Matt Morris of Visible Hand. “We’ve created a solution that helps the direct care staff follow best practices to interact with patients in ways that improve their long-term behavioral health.”
Working alongside clinicians from CPMG during the development of their products presents startups in the Boomtown Health-Tech Accelerator with the possibility that the wider Kaiser Permanente network might adopt the innovations they create.
“I’m a believer that it’s going to take a village to really help providers deliver the highest quality and most affordable healthcare,” explained Dr. Richardson. “Leveraging technology to be able to do that is going to be very important, and I can see many uses for the four companies that we are working with in the future.”
Choosing Innovators, Not Innovations
The complexity of the US healthcare system has made pivots – sudden shifts in product design or business model – commonplace for digital health startups. This reality has inclined the Boomtown Health-Tech Accelerator to favor innovators over innovations when considering applicants.
“We’re selecting the team first,” explained Base. “Often we’re more interested in the thought process that went into the development of a product than the product itself, because as a startup gets to know the market, their product is going to morph and change.”