Many health systems are dipping their toes into venture capital, and Northwell Health is no exception. The New Hyde Park, N.Y.-based health system's venture arm, Northwell Holdings, has been making serious moves and maintains a diverse portfolio of healthcare companies.
Recently, Northwell Holdings partnered with Aegis Ventures to launch Optain, an ocular health company using artificial intelligence.
To learn more about Northwell's investment strategy, Becker's reached out to Richard Mulry, the president and CEO of Northwell Holdings.
Question: How is Northwell Holdings factoring economic uncertainty into its investment strategy?
Richard Mulry: The macroeconomic environment certainly impacts a startup's ability to raise or borrow, negotiate terms and how they manage their burn. When we review new investment opportunities, we have remained consistent with our investment thesis — we look for solutions which can improve quality, lower costs, drive efficiencies and enhance patient experience. In this way, we align our investment goals with the health system's strategy.
In our diligence, we also place great emphasis on the quality and experience of the management teams we partner with to de-risk product market fit and an effective go-to-market strategy. Through our collaboration, the company is more likely to execute at scale with a large enterprise reference customer, enhancing their ability to succeed despite economic headwinds.
Q: What is the advantage of getting in early with seed rounds, like the Optain investment?
RM: While seed funding can represent the highest relative risk, we view early investment as an opportunity to work directly with a founder and management team to shape the development and delivery of a solution. Optain, an artificial intelligence company that uses retinal imaging to detect and prevent a wide variety of eye and systemic diseases in their earliest stages (enabling more timely and cost-effective interventions), is an excellent example of Northwell's ability to add value in the early stages of a company's life cycle.
Combining cutting-edge technology developed in Australia with Northwell's large and diverse de-identified data sets, we recently launched Optain in the United States through a $12 million seed investment alongside Aegis Ventures. Looking ahead, we will also advance the company's product development by refining proposed integration into clinical workflows at Northwell. With this knowledge, we can spearhead efforts to obtain regulatory approval in the U.S., and building upon successful product launches overseas, accelerate product entry into the U.S. through serving as an enterprise reference customer.
Q: How did the Ascertain collaboration with Aegis come about, and do you see new opportunities for partnership in the future?
RM: Northwell and Aegis have collaborated over the last several years and have launched two innovative joint ventures: Caire, the first virtual-first ecosystem with health systems at the center, and Ascertain, a company creation platform focused on the development of AI-enabled solutions.
Caire was formed in response to the growing need for patients to access care more conveniently through technology, but not in a manner which disinforms their primary care physician, which can result in fragmentation in care delivery. Through assembling a consortium of health systems that serve as investors, early adopters, and clinical partners for Caire's hybrid model of in-person and virtual care, we intend to put health systems back at the forefront of innovation at a time of significant external competition, shrinking margins and workforce challenges. We believe health systems are uniquely positioned to design and deliver the solutions which address these issues and also benefit economically in a manner that is commensurate to the value they create.
Ascertain represents a tremendous opportunity to leverage some of the industry's most talented professionals, and with the advent of emerging technologies like large language models, work with leaders at Northwell to curate and develop AI-enabled solutions that improve care delivery, outcomes, and operational efficiencies.
While independent, we see significant opportunities for synergy and collaboration in the development of care solutions as Caire and Ascertain continue to grow and mature. We remain excited about advancing solutions from both of these ventures to market.
Q: How does Northwell Holdings generate value for patients?
RM: In the purest form, Northwell Holdings maintains the health system's values and executes on its core strategy for patient care and contributions to the communities we serve. When considering value for patients, we aspire to best meet the needs of a consumer through cost-effective, high-quality, accessible care, which results in a positive patient experience. The Holdings team sees each of these attributes as integral to the investments made in external companies, internal innovations within the health system and through strategic partnership, such as our collaboration with Aegis. Each of these pathways represents opportunities to impact the manner in which we perform our work and the delivery of those services to our patients. Holdings aligns the deployment of capital and people toward the attainment of these goals.
Q: Where do you see the healthcare AI market heading?
RM: With a few notable exceptions (particularly radiology), the regulated clinical market remains challenging given the lack of reimbursement levers and significant regulatory hurdles. When and if the market will be ready to support a robust ecosystem of clinical healthcare AI solutions remains uncertain. However, we see tremendous near-term opportunity in the unregulated, nonclinical space — particularly around the potential of large language models to streamline health system operations and increase clinician efficiency via reducing the amount of time they spend in the EHR. This is an area we're spending significant time and energy and expect to generate outsize returns.