More than 20 hospital systems around the US have venture arms that invest in healthcare companies either founded internally by clinicians or externally by experts in the industry.
The idea is to build products the hospital needs, and hopefully bring in some ROI to uplift finances.
In 2013, New York-based Northwell Health launched Northwell Holdings, which has since used internal funds to spin out a joint company creation platform with Aegis Ventures called Ascertain in 2023 and robotics company Clarapath in 2021.
Richard Mulry, president and CEO of Northwell Holdings, spoke with Healthcare Brew about how the venture arm chooses its investments, the benefits it brings to the health system, and his thoughts on the future of healthcare innovation.
This interview has been lightly edited for length and clarity.
What sort of companies do you invest in? And are they often internal or external to the health system?
The answer is both. We have over 100,000 employees now, so invention can happen across the enterprise. Some of it’s from our clinical faculty, and others are from our team members. Some of our physicians have developed intellectual property around medical devices, sometimes around therapeutics. They present those through a normal tech transfer process, and then we would try to see if there’s a way that we can either help them bring that solution to market or if there’s a way that we can assign that IP over to them and help seed or fund the company, and then allow the company to proceed out into the market with us as an equity shareholder.
We do invest in outside companies. We probably receive over 2,000 inquiries a year from outside startups that want to receive some form of investment, but also the partnership that Northwell offers.
Lastly, we’ve really started to foray into creating our own companies. We have all of this expertise; we wanted to make sure that we were not only investing in but creating solutions.
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How do you decide what companies you invest in? And how many companies do you invest in?
For every 300 companies we look at, we may invest in one. We’ll do a first-pass evaluation with our subject-matter experts. For instance, is this really disruptive? Do we think that it meets a need? Does it do something better or faster? And does it represent an opportunity to have financial return? So if it meets those criteria, it will go into a deeper diligence [process].
How does the venture arm support hospital finances?
One example is preauthorization, and when patients are in transitions of care—so a patient’s going to leave the hospital and go to a nursing home, for example—[Ascertain] took that process down from 150 clicks to almost six clicks. It saves a lot of time on that end, so our team can spend more time either working the exceptions of what criteria they still need to fulfill in order to get that transition to occur, or they spend more time with the patient’s families.
Not only does it help with efficiency, meaning we’d have to hire far fewer employees to do that than we would if we just scaled it linearly through a manual process. Also, it’s a better patient experience, and it’s a better provider experience.
What innovations are you excited about in the healthcare industry generally?
We’re going to continue to invest in agentic AI because we feel that that’s a very, very important area to develop—both on the administrative and clinical sides—that can make vast differences in the way that we can deliver services. We’re also seeing great need in the market and great advancement in brain-computer interface. There’s a company [we invested in], for example, called Cognixion that helps translate basically brain waves into speech for patients that might be suffering from a speech impediment because of ALS, stroke, or for another reason.