The Affordable Care Act has driven a rush in entrepreneurship, a new report claims, as startups chase new ways to jump into the $2.9 trillion business of health reform, according to Kelly Barnes and colleagues at the PwC Health Research Institute in their new report, “Five trends to watch as the Affordable Care Act turns five.”
More than 90 new healthcare companies have been created since 2010, many with venture capital funding and many aimed at bringing hospitals and physicians software and management services to adapt to new Medicare and insurance payment models.
Among the 90 new enterprises are 29 firms specializing in telehealth, with platforms that let patients consult physicians or nurses over the Internet, including CellScope and Medisafe. The largest telehealth provider, American Well, was founded in 2006, and is gaining traction with health systems like Philadelphia's Thomas Jefferson University Hospitals, which is adopting telehealth options along with retail urgent care options.
Fifteen of the new companies are working in patient education and transparency, including Doctible and HealthSparq. Owned by the Pacific Northwest Blue Cross Blue Shield insurer Cambia Health Solutions, Health Sparq's website and app offers cost estimates and provider comparisons and is available to many BCBS plans.
Fourteen of the companies are targeting the field of healthcare process improvement, from optimizing quality reporting to improving communications for chronic disease. These companies include Cureatr, the marker of group messaging apps for care coordination challenges; Dabo Health, which aims to “make quality metrics actionable”; and Epion Health, which offers a platform for digital patient check-in, payment collection and engagement.
There are also 9 patient connector companies, trying to link patients, doctors and support networks. They include Grand Rounds, Doximity and Smart Patients. There are also seven new healthcare delivery and accountable care companies helping providers navigate the value-based payment journey. These include Aledade, co-founded by former federal health IT coordinator Farzad Mostashari, MD, helping small primary care physicians form ACOs; and Iora Health, a network of primary care practices in Massachusetts, New Hampshire, Washington State and elsewhere that partners with other health organizations.
Seven new analytics companies have also been founded since 2010 (including Artemis, Flatiron Health, and Vheda Health) and nine new insurance and wellness companies, including AchieveMint, EveryMove, Jiff and Oscar Health. Oscar is a whole new health plan, in New York and New Jersey that was founded in 2013 by three young entrepreneurs and has received $174 million in venture capital from Silicon Valley veterans Vinod Khosla and Peter Thiel. Oscar's health plans have no copays and no coinsurance, free generic drugs, telemedicine and personalized online help; the insurer has 30,000 members is applying to sell in California.
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At the same time that new health companies were being created, the PwC report said, “giants from other industries” have been creeping into healthcare digitally and physically, in the case of CVS, Target, Walmart and Walgreens offering consumers basic, low acuity medical care at more affordable or at least predictable prices. A decade ago, leaders of academic medical centers brushed off the possibility of Americans taking their children to Walgreen's for a check-up, Jefferson CEO Stephen Klasko said.
In the new reformed healthcare economy, argues PwC's Barnes, "one thing is for certain: shifting frameworks in a consumer-centric sector will continue to inspire disruptive new thinking." The question for hospitals, physicians and health systems is how to collaborate with some new companies and compete with others, meet the consumer demand for affordable, convenient healthcare.