Aegis Ventures' digital consortium continues to grow with sights set on scaling up tech innovation

Aegis Ventures' new digital consortium is gaining new members as health systems look to collaborate to develop and scale health tech solutions.

UPMC Enterprises and Vanderbilt Health have joined the digital health innovation collaborative, joining the nine founding health systems.

Aegis' digital consortium aims to put health systems at the center of digital health innovation to help address healthcare’s most pressing quality, equity and cost challenges, the startup studio said when the initiative launched in April. These health systems will codevelop, invest in and deploy health tech solutions alongside Aegis Ventures. 

"We launched the Digital Consortium on the founding premise that health systems should be in the driver's seat when it comes to innovation," said John Noseworthy, M.D., emeritus president and CEO of the Mayo Clinic and chairman of the Digital Consortium, in a statement. "By aligning incentives between innovators and health systems, we create sustainable technologies that are better for patients, providers and administrators."

The founding nine health systems are Endeavor Health, Indiana University Health, Memorial Hermann Health System, Northwell Health, Novant Health, Ochsner Health, The Ohio State University Wexner Medical Center, Sharp HealthCare and Stanford Health Care. 

The 11 health systems will work together with the common goal of "reimagining the healthcare experience for all stakeholders" through an innovative health system-led approach to build and invest in new technologies, Aegis Ventures said in a press release.

The consortium launched after Aegis Ventures collaborated with Northwell Ventures for three years, leading to the development and growth of four companies spanning patient engagement, AI-enabled diagnostics, workflow automation and empathetic AI. Caire is a patient engagement platform with health system partners at its core that launched in early 2023. Ascertain is Aegis' and Northwell's joint venture, a company creation platform that launched in 2021. Ascertain focuses on leveraging automation technology and AI agents to transform healthcare providers and payers’ enterprise operations. Last year, the two organizations launched Optain, an AI-powered disease detection company. Northwell and Aegis were also both investors in Hume, a conversational AI startup.

Health systems have so many common overlapping issues, and there is growing interest in collaboration to tackle problems, Noseworthy said during an interview with Fierce Healthcare on the sidelines of the HLTH 2024 conference in October. "We think these partnerships will extend and grow pretty quickly to be problem-specific, likely tackling three, four, five different problems at the same time," he said.

"Every health system is unique, but their problems are not," agreed John Beadle, co-founder and managing partner of Aegis Ventures, who sat down with Fierce Healthcare, along with Noseworthy, during the HLTH conference last month.

"Every health system is trying to diversify revenue and expand margin and everyone recognizes that the core business of delivering acute care is no longer going to generate enough margin to be able to continue to reinvest in your mission, expand and grow and be competitive," Beadle said.

"The way we've tried to position Aegis is as a wrap-around revenue diversification and margin expansion partner across a lot of different vectors and strategies, whether it's spinning out a business unit, taking IP or data or other assets and helping to monetize them, building companies from the ground up, taking great innovations from your faculty and productizing and commercializing those. It's a very flexible tool kit, and it's very specific to the needs and strategies of each health system," he said.

The partnerships with UPMC Enterprises and Vanderbilt Health will accelerate the consortium's pipeline of companies launching in 2025, Beadle noted.

"We've been resourcing ourselves to be able to do four or five really high-quality companies a year," he said. "I think the pace of company creation will accelerate pretty significantly now that we've built the consortium and have the foundation plan."

The goal is to create a "synergistic ecosystem of companies," not more point solutions, Beadle noted.

The startup studio and its health system partners are exploring companies that improve the "digital front door" for patients and the back-office administrative functions for healthcare operations, Noseworthy said.

Beadle said Aegis' investment thesis focuses on five areas: reimagining the consumer experience, automating workflows, creating and amplifying new biomarkers, unlocking real-world evidence to accelerate clinical trials and unlocking shared care.

Contrary to the word "digital" in the consortium's name, the group is not just focused on digital health technologies. "We're looking at scaled spinouts, for example, of business units within health systems that we can turbocharge using AI, AI agents in particular. We'll build diagnostics, biomarkers, we're doing real-world evidence and looking at automating things like durable medical equipment, pharmacy and home health," Beadle said.

UPMC Enterprises is the innovation, commercialization and venture capital arm of UPMC and has more than 40 active investments in early to late-stage growth companies. 

Vanderbilt Health, based in Nashville, Tennessee, is an academic medical center that's part of Vanderbilt University Medical Center. It has focused on launching creative solutions in areas such as pharmacy, supply chain and employer health services, bringing a track record of business building to the consortium, executives said.

Through the consortium, health systems can learn from each other and share best practices around what works and what doesn't work, Beadle noted. "Creating that dialog is very powerful. I think longer term, we also see the consortium serving as a governance body and being able to set standards as well help define best practices around how these technologies are diligenced, credentialed, deployed and scaled up within these systems," he added.

Deploying new technologies can be risky. Building a framework that enables health systems to work together helps overcome that hesitancy.

"Whenever you develop a novel technology, no one wants to be first in deploying it, and everyone has been trained to first do no harm. So, there's a risk aversion," Beadle noted. "But, when you can create working groups of four or five health systems that decide together they're going to amortize the costs, set the governance framework, decide how the technology is going to be deployed, you can share risk, reduce the burden on any one system, and create a bit of a community of practice around how to actually deploy these things successfully."

With advances in artificial intelligence and generative AI, there are now opportunities for health systems to reimagine the patient experience using technology in ways not possible before.

"Since the last generation of technology, you could build a digital front door, but you'd still need a human being on the other end responding to inquiries or questions. Now you can automate a lot of that, which makes it a lot easier to be able to go attract patients, retain them, navigate their care throughout the health system, respond to their questions, proactively give them content, take wearables and other data and then even build longitudinal care pathways based on their genomic profile, their EHR data," Beadle said. "I think the technology now exists to do that without it needing a human being at every step. I think you're going to see really significant acceleration there."