Providence, based in Renton, Wash., has spun off four companies while retaining equity in each of them.
The companies are Xealth, a digital health prescribing platform; Circle, a smartphone app for expectant mothers; DexCare, a digital access platform; and Praia Health, a digital health company.
Sara Vaezy, executive vice president and chief strategy and digital officer for Providence, told Becker's these spinoffs create value for the health system in two key ways. First, they address specific challenges Providence needs to resolve.
Ms. Vaezy emphasized that Praia Health, spun off in March and currently in use by Indianapolis-based Community Health Network, originated from Providence's exploration of the challenges patients encounter when accessing digital platforms. Through this process, the health system identified a need for identity-driven personalization tailored to individual patients, which led to Praia Health's development.
Praia Health enables health systems to provide more personalized online healthcare experiences for patients. Ms. Vaezy highlighted that by establishing this company and implementing its solutions at Providence, the health system has reduced customer service call volumes. Additionally, patients can now navigate their digital experience with greater ease, decreasing the need for frequent password resets and assistance.
"Our goal is to fill existing gaps in the market, leveraging our unique perspective as a steward of data and patient relationships," Ms. Vaezy said. "Ultimately, these spinoffs are not an end in themselves; they are a means to solve real problems for our patients and the healthcare community as a whole."
The second way Providence is creating value with its spinoffs is through its role as founder of these companies. The health system retains equity in the companies and participates in product development to ensure the new entities continue to address Providence's needs.
Providence also often secures board seats or observer positions to stay closely connected with the company to influence the product road map.
"It's essential that these companies evolve and innovate to remain viable. This focus on viability is a key reason we choose to spin out these ventures rather than keep them internal," Ms. Vaezy said. "Building technology is capital intensive, and health systems typically lack the long-term capital necessary for such endeavors."