In unique public-private partnership, the state Department of Health has teamed up with venture capital firms to invest in health technology and push New York to the top of the growing field of electronic medical records.
Private investors put up $4.2 million that will be distributed to 12 small health technology companies in New York, according to an announcement on Thursday.
The initiative, called the New York Digital Health Accelerator, is expected to create 1,500 jobs over five years and attract more than $150 million in additional investment.
“What we build in New York is going to be used around the country when everybody else catches up,” said state Health Commissioner Dr. Nirav R. Shah.
As part of the program, the companies will be connected to health care providers and potential customers for guidance. Among the mentors are several Capital Region organizations including Albany Medical Center, Ellis Medicine, Hometown Health Center and the Visiting Nurses Association of Schenectady and Saratoga Counties.
The initiative “will help develop innovative approaches to improving patient outcomes at lower costs while helping to attract health care entrepreneurs to New York State,” said James J. Barba, president and CEO of Albany Medical Center, in a statement.
The project is a collaboration between the state Department of Health, the New York City Investment Fund, a private group, and the New York eHealth Collaborative, a not-for-profit organization that is funded by the state to develop strategies to coordinate electronic health records statewide.
The Digital Health Accelerator has two goals: advance technology and create jobs.
“We want to make New York a center of this emerging technology,” said Maria Gotsch, president and CEO of the New York City Investment Fund.
The investment money will be provided by a syndicate of investors including Aetna, UnitedHealth Group, Milestone Venture Partners, New Leaf Venture Partners, Quaker Partners, Safeguard Scientifics and the New York City Investment Fund.
The investors will have a small stake in each firm selected for funding. To avoid a conflict of interest, Aetna and UnitedHealth will not vote on which companies get money, Gotsch said.
The state has already spent $800 million to help doctors and health providers implement electronic medical records and set up databases where providers can exchange patient information. This new initiative will focus on technologies that will help the state’s Medicaid Redesign Team implement its “health homes” model, which emphasizes efficient care and communication among health providers. The program will target “early- and growth-stage companies that are developing cutting-edge technology products in care coordination, patient engagement, analytics and message alerts for health care providers,” according to the news release. The companies initially get $100,000 and an additional $200,000 if they hit certain benchmarks.
“For many years New York has been a place where people come and sell things,” Gotsch said. “We want it to be a place where they make them and then sell them.”