Nashville ripe for health IT start-ups
Center grows new companies, gives them footing
NASHVILLE, TN –Tennessee ranks third among all states in entrepreneurial activity over the last decade, according to a Kauffman Foundation study. Much of that credit goes to Nashville’s Entrepreneur Center, which helps startups find funding and a whole lot more.
Through the EC, fledgling technology companies receive ongoing mentoring and discounted legal and financial services.
Michael Burcham, president and CEO of the Entrepreneur Center, recently was honored by President Obama as one of 11 “Champions of Change” as part of the administration’s Winning The Future initiative.
“The entire healthcare field is moving rapidly toward technology-enabled services,” said Burcham. “Because so many healthcare companies are headquartered in Nashville, our aim is to help IT innovators refine their ideas and get plugged into this community quickly.”
The biggest mistake young health IT companies make, as Burcham sees it, is to promote their technology, not the clinical and financial benefits.
“Selling to a hospital usually takes many months and multiple meetings,” he said. “We make sure that tech startups have a compelling message for the CMO and CFO as well.”
“At the center, tech innovators get the benefit of real-time feedback,” said EC entrepreneur-in-residence Keith Gregg, who also is chairman of JRG Ventures, a Brentwood, Tenn. company that invests globally in healthcare IT and life sciences companies. “We can help assess whether a Nashville IT startup has a plan in place to really grow, not just in the U.S. but internationally, too.”
The Entrepreneur Center works closely with other area nonprofits, such as the Nashville Technology Council, a group dominated by health IT companies.
“Our involvement with the EC and Technology Council really raised our profile and made it easy to get funding to grow our company,” said Sal Novin, CEO of Healthcare Productivity Automation (HPA) in Franklin, Tenn. HPA’s software takes automated adjudication of claims to a new level, with 99.97 percent first-pass accuracy. An automated claim audit costs as little as 20 cents per transaction, while a claim audited manually can cost as much as $4.
Companies like HealthSpring (recently purchased by Cigna) are using HPA technology to eliminate human error and cut costs. “You can auto-adjudicate 90 percent of claims for less than it costs to manually audit just 10 percent of them,” said Novin. “That’s why we’re becoming the alternative to offshoring, where maybe a thousand people are entering the data and, unfortunately, making a lot of costly mistakes.”
The center was also the springboard for Nashville-based Stratasan, a company that offers a GIS platform that takes mountains of raw data and turns it into actionable summaries for healthcare executives. “We’ve aggregated over a billion health records from many sources – Medicare, state databases, hospital EHRs – and we cull that into layers of data that help executives make better decisions faster,” said Stratasan chairman Tod Fetherling. “Strategic reports that used to take a month to produce can now be done in an hour.”
The EC also helped steer Stratasan to the world of ACOs. “We feel that the GIS platform plays a pivotal role in the design and development of ACOs,” said Fetherling. “The mapping capabilities make it so much easier to visualize who your partners are – and what strengths they bring to the team.”
“The best way to describe the Entrepreneur Center’s role here is to call it what it truly is: an ecosystem for startups,” said John Davis, senior associate at Council Capital, a healthcare investment firm in Nashville.
“The EC is interwoven with other outstanding nonprofits, such as Leadership Health Care and the Technology Council. For a tech innovator, it’s easy to find mentors and partners with all the skill-sets needed to be successful.”