ANDHealth inks deal with US health insurance giant
March 12, 2021
ANDHealth has penned a partnership with the innovation arm of the second-largest health insurer in the United States, Anthem, Inc, opening a new path for local digital start-ups to enter the market.
The tie-up between Anthem Digital Incubator and ANDHealth, a non-profit digital health accelerator business, means Australian start-ups that often lack the expertise to expand globally can now gain access to the world’s largest healthcare market.
Anthem Digital Incubator is part of Anthem, Inc, the $US81.7 billion ($107 billion) US listed health insurer that is part of the Blue Cross Blue Shield Association. It’s the second-largest health maintenance organisation (HMO), serving more than 110 million Americans.
Bronwyn Le Grice, founder and CEO of ANDHealth, said the US market was critical to the global scale-up and commercialisation of Australia’s digital health technologies.
“The reality is, for most digital healthcare companies, when they are raising capital to take their product through clinical evidence-gathering and regulatory approvals, they will be asked what their plans are to market that outside Australia,” Ms Le Grice told The Australian Financial Review.
“The Australian market on its own is not sufficient to generate a return that warrants the type of investment these types of companies need. Companies that can clearly articulate a marketing entry strategy for the US market significantly increase their chances of raising capital, and their ultimate valuations.”
Anthem launched its incubator program – which invites entrepreneurs to participate in the program and receive funding opportunities, mentoring, and support in finding a path to market – in late 2020.
“Because innovation has no borders, Anthem is looking globally for high-potential start-ups and entrepreneurs with ideas, products and services that have the potential to help consumers lead healthier lives, while simplifying healthcare,” Kate Merton, Anthem staff vice-president of digital care delivery, said.
Anthem Challenges identifies an area of need, such as in maternal health, then ANDHealth looks over the 425-odd companies with which it works to identify those that can meet the challenge.
Perx Health founder Scott Taylor delivers digital healthcare programs to help manage chronic conditions for patients in between doctor visits. Medication, appointments, exercise regimes and examination results are all on the app.
Mr Taylor always had US ambitions after going through the ANDHealth program in 2018, and last year entered the US market with Perx’s first customer.
“We were shortlisted for one of the Anthem Challenges last year and applied for a few more and [are] waiting to hear back,” Mr Taylor said. “We are super-excited by what this incubator presents. We are looking to connect with one of the biggest payers in the US market.”
Mr Taylor said that as an early-stage health innovator, getting time with senior stakeholders and obtaining as much advice about going to market and strategy is pivotal in the highly complex US healthcare system.
Ms Le Grice added that the way these local digital companies stay around longer is to raise more capital.
“They can be impacting communities around the world, but based in Australia,” she said. “The biggest thing that drives companies offshore too early is lack of capital.”
Chris Nave, managing director of Brandon Capital Partners, a venture capital firm specialising in healthcare and biotech startups, said this partnership is interesting because it addresses a reason digital health has not delivered on its promise – reimbursement by healthcare funding bodies.
“[Many digital health companies] have not worked out ways to be a durable part of the medical system that gets paid for by insurers and by government,” said Dr Nave, who also is chief executive of the Medical Research Commercialisation Fund.
“Partnering with Anthem …. will provide the ultimate voice of the payer.”
Carrie LaFrenz
The Australian Financial Review
12 March 2021
