Business ‘Incubators’ Fuel Health IT Growth

The influx of the health IT industry under the American Recovery and Reinvestment Act (ARRA) helped launch the health IT incubator movement, which has given rise to dozens of health IT startups.

Business “incubators,” also known as “accelerators” help startups with seed money. In response to federal electronic health record (EHR) incentive payments, more than a dozen of these incubators have emerged across the United States in recent years, Modern Healthcare reported. According to the publication, the incubators are focusing venture capital on health IT rather than drug or medical device companies.

The health IT incubators, several of which are finding homes in the Chicago area are “chasing a growing pot of venture capital money looking to cash in on the health IT boom, according to Healthcare Growth Partners, an Elmhurst, Ill.-based investment bank focused on healthcare IT. Healthcare IT firms raised $2.7 billion last year in 267 private equity and venture capital transactions, both records, according to HGP,” according to Modern Healthcare.

Among the startups profiled in the article is Chicago-based Ludi, which designs software that helps physicians and providers track their contracts, and California-based drchrono, the developer of an EHR for iPads.

Dr. David Brailer, the first National Health Information Technology Coordinator, and founder of the healthcare investment firm Evolution Partners, expressed his doubts about the incubator movement for health IT.

Brailer told Modern Healthcare that he expects health IT incubators and the companies they spawn to “disappear” but noted that for healthcare leaders, “This is learning. It’s experimentation,” according to Modern Healthcare.


1 Comment

  1. The value of Health IT developments will be lost unless the industry works to promote opportunities for training and further development, necessary to ensure the U.S. has a workforce equipped with the skills to fulfill vacancies. In addition, many healthcare organizations have not yet addressed the range of technology, staffing, and process requirements needed to capitalize on mobile assets and to deploy mobile capabilities pervasively to optimize operational, tactical, and strategic decisions.
    Than Nguyen

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