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Optum Ventures is looking for startups that will make fundamental changes to healthcare system

New venture fund from the UnitedHealth Group subsidiary is more of a market lift model than an accelerator, partner says.

Susan Morse, Senior Editor

Optum Ventures officially launched this week to fund startups on the cutting edge of healthcare innovation.

It's starting with $250 million to invest in four startups that have the capability of changing the way healthcare is delivered at the core, foundational level.

The real focus is that the health of the patient is driving value.

[Also: Optum forms $250 million venture fund to invest big in healthcare innovation]

Most of the time, this means tweaking the system for savings. But that's not getting to the core foundation, said Optum Ventures partner A.G. Breitenstein.

Optum Ventures is looking at, she said, "the gig ideas to really change the way in which the system works at a fundamental level."

Breitenstein and Virginia McFerran are operating Optum Ventures independently of UnitedHealth Group's Optum.

[Also: Optum360, Navicure will dominate revenue cycle management vendors, Black Book says]

The LLC will be overseen by Optum CEO Larry Renfro, as managing partner. 

Optum Ventures is starting with a $250 million investment in four startups. 

One is Mindstrong Health, which is working on a new way to proactively treat mental health through the use of smartphones. 

This isn't mining the phones for calls or searches, Breitenstein said but measuring the tactile pressure of fingers on keys to check neurocognitive function.  

"Our neuro abilities correlate to brain health with surprising accuracy," Breitenstein said. 

Currently, a patient is tested for bipolar disorder or severe depression through a set of cognitive tests administered in a physician's office. 

"Patients don't live in the doctor's office," Breitenstein said. "Those tests only affect highly episodic and sterile circumstances in the doctor's office."

Mindstrong's technology measures brain health in everyday interactions, she said.

It can be also signal low sugar levels and the onset of a diabetic coma or be used for other chronic conditions such as asthma.

This cognitive behavioral therapy is a cost-effective way to head off a traumatic event before there is a hospitalization, she said.

The next level is training physicians to manage bipolar disorder before there's a relapse, rather than treating the relapse. 

"That's a completely different model than what we have today," Breitenstein said. 

The proactive shift in treatment will take time, she acknowledged.

"This is very long range, taking the long bets, to change the way healthcare is delivered," Breitenstein said. 

The venture funds overarching vision is industry disruption, while also needing to get a return on investment.

"We have to do both," Breitenstein said. 

It's not an accelerator, such as the classes at Cedars-Sinai.

"We're not really accelerator," she said. "We're looking at a minimally viable product, something we can connect to the infrastructure. We are a market lift model as opposed to accelerator."

The startups will have access to Optum's vast system of data analytics if it's appropriate, she said.

It is geared to both providers and health insurers. 

"I think there's a huge opportunity in the payer space, using data to innovate," she said. "There's more appetite for early stage investing."

For really promising technologies that have shown great traction, the question she said for Optum Ventures' is, how can we pour on more capital?

Breitenstein loves risk. Say "disruption" and she's ready to take on what that word means for healthcare innovation. 

Prior to working on Optum Ventures, Breitenstein was chief product officer at Humedica, a data analytics company she co-founded.

When Optum acquired Humedica in 2013, she became chief product officer for Optum Analytics. 

She's been working on Optum Ventures for months 

Her inbox of requests to be the next startup to get Optum Ventures funding is pretty full.

The aim is to take on three to five a year. They're looking at models for genome therapy, predictive preemptive approaches and genetics, combined with claims and clinical assets. 

The biggest difference between this and other venture funds is that Optum Ventures has the network to be connected to all of the different entities in healthcare, without beholding to any of them, according to Breitenstein.

Optum Ventures is in this space for the long-term.

"It will extend our purview of what is on the cutting edge," Breitenstein said. "Let's step out of ourselves."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

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