Seattle 2.0 Blog

January 25, 2008

[Marcelo's Note: Two days ago I blogged about all the healthcare startups in Seattle. Bob Crimmins wrote an excellent comment and I asked him to convert it to a blog post]

Spring boarding off of Marcelo’s salient post about the apparent abundance of healthcare startups in Seattle, I wanted to add a few observations.  Speaking as one of the founders of iMedExchange (a social network exclusively for physicians), I and my fellow comrades have been watching this space actively for a few years.  Here are some thought about why healthcare, why Seattle and why now.

Why Healthcare? At $2 trillion dollars and growing, the US healthcare industry is the single largest non-military market on the planet. It's also one of the most complex and one of the most broken industries. In terms of administrative technology (as opposed to clinical tech) the healthcare industry has lagged virtually every other industry of any significance. In fact, despite endless studies that purport to show that electronic medical records systems reduce costs, reduce mistakes and generally improve the quality of care, the rate of adoption remains glacial. Add to the mix a broad movement toward consumer-directed healthcare, a kludgey claim reimbursement process, government mandates, regulatory compliance issues, the fact that everyone, everywhere needs it all the time, recession or not, and about a hundred other factors and it's easy to see why healthcare is an attractive industry -- lots of opportunities.

Why now? An obvious factor is an aging population -- which means many more sick people along with lots of new opportunities to treat them... and sell them a ton of stuff. But, actually, it's not really a "now" thing... unless "now" covers the last hand full of years. There have been a truck load of healthcare startups coming out of Seattle for at least the last half dozen years, including OneHealthPort, MedOrder, ClearMed, OnHealth (acquired by WebMD), PracticePartner, TransVerio, 3DGrid Healthcare Solutions, and a bunch of others that I can't quite recall at the moment -- some have come and gone. A couple of more recent forays not on your list are Clarity Health and PeerWisdom.

As for why Seattle? I'm not sure, actually. There are some significant healthcare related players up here, including Harbor View, Seattle Cancer Center, Frazier Health Ventures, WellPoint, even Overlake Hospital has a venture fund.  Combined with the tech influence of Microsoft, Adobe, Amazon and others I suppose it’s  a pretty rich target environment.  I also suspect that other major technical market might also be hot beds of healthcare startups, e.g., New Your, San Francisco, Boston, etc.

As for us over at iMedExchange, we're taking a different tact from the vast majority of healthcare startups. While most healthcare startups are go after clinical information management or chasing the healthcare consumer, we're focused on the doctors as people. By providing a value add social networking context for doctors to connect we're aiming to build the most useful place on the Web for physicians.

Good luck to all the Seattle startups out there, healthcare or otherwise!!

----

Bob Crimmins is the Founder and CTO of iMedExchange.

Comments (4) for "Healthcare startups in Seatt...

"As for why Seattle?" - Another major healthcare theme emerging is Seattle as the Center for Global Health Initiatives. There are three components to this: 1) Large funding base from the Bill and Melinda Gates Foundation (http://www.gatesfoundation.org) 2) Great collection of scientific research centers (like UW, FHCRC, PATH, SBRI, ISB, BRC) 3) Declaration by the Washington State Governor (Chris Gregoire) that healthcare is one of four strategic investment areas where "Tabacco Funds" money will be invested into the local economy (http://www.governor.wa.gov/news/news-view.asp?pressRelease=442&newsType=1) 4) The recent creation of the Washington Vaccine Alliance (WAVA) (http://www.wava.info) This list emphasizes the research end of developing tools to fight global health challenges, and sponsored research draws good people to the area and creates intellectual property that can help found new Seattle businesses. By Tom Skillman - 1/25/2008 11:22 PM

In the why Now, why Seattle let's not forget the tremendous activities that Microsoft is generating. Having participated as the former WW Managing Director for GOV at Microsoft and having help developed the WW Public Health strategy and MSFT acquisition of Azyxxi, one should realize the tremendous power that will be created in the space. Under the direction of Peter Neupert (former CEO of Drugstore.com), the Microsoft health division counts over 400+ dedicated employees. The vision is grand and the impact will be felt. Of companies to watch I would offer that Sillicon Valley based yet Bellevue funded (Monster Venture Partners) http://www.Healthcare.com will be at the top of the leaderboard. Executing extremely well thanks to a highly qualified team, their focus is on building the industry's first global directory of care providers. Yes, healthcare is a good space to be in in Seattle. By Pascal Stolz - 1/26/2008 12:55 AM

I would add two points: 1) Seattle companies are in many ways at the forefront of employee benefits. Many of our big, landmark companies and even more of our smaller companies attract and retain superstars with innovative and generous benefits offerings. This includes but is not limited to health benefits. 2) We are open to alternative (but still evidence-based) approaches to US health care problems. Seattle companies, e.g. Free & Clear, Limeade (my employer -- shameless plug) and many others are probing the behavioral and social aspects of healthy and happy people/employees. One more thing -- in healthcare (moreso than many other hot industries), innovation is an economic necessity for our country. By henry.albrecht - 1/27/2008 7:59 AM

Trusera, too. By henry.albrecht - 1/27/2008 8:00 AM