New report from the California HealthCare Foundation identifies 5 opportunities to maximize the value of digital health accelerators written by Aaron Apodaca.
The rise of health accelerators since 2011 has spawned what Aaron Apodaca describes as the “greenhouse effect” explained in the new report, Greenhouse Effect: How Accelerators Are Seeding Digital Health Innovation from the California HealthCare Foundation that provides a window into the evolving landscape of health accelerators.
The report highlights how the birth of technology seed accelerator, Y Combinator, the passing of the American Recovery and Reinvestment Act (ARRA), and the Affordable Care Act (ACA) led to the emergence of health accelerators starting with Rock Health in San Francisco. Shortly after Rock Health’s inaugural class of startups, new accelerators such as HealthBox, Blueprint Health, and StartUp Health quickly emerged. Funding capital available to startups who are selected from these health accelerators range from $20,000 to $100,000 in grant based capital, equity financing, and convertible debt funding.
There are many critics who feel the Lean Startup approach of health accelerators is not well suited for solving complex challenges in healthcare. Experts interviewed for the report identified the following key challenges that health accelerators, startups, and investor should consider:
- Finding the balance between quantity vs. quality
- Revenue models have not been proven
- Startups must establish key partnerships
- Great idea, but not a viable business
- Significant time & capital is critical to growth
As of January 2013, Blueprint Health, Healthbox, and Rock Health reported that their portfolios raised more than $40 million in post program funding.
In navigating these challenges, program leaders, sponsors, and health technology startups should consider these 5 opportunities to maximize the value of health accelerators shown in the following infographic visualization:
The future of health accelerators is promising as the number of ardent startups gain more visibility and new health accelerators will focus on building financial and strategic ties to their specific local marketplaces such as NYDHA in New York.
The complete report is available for download.