“There has to be a radical transformation in value delivered,” Health 2047's CEO said.
The American Medical Association (AMA) will inject a fresh $27.2 million into its Silicon Valley-based incubator Health2047, Inc., according to a new announcement.
The company is the so-called “commercial arm of AMA,” and it’s the brainchild of the venerable medical consortium’s current CEO Jim Madara. Larry Cohen, the CEO of Health 2047, told Healthcare Analytics News™ that Madara launched it to make the AMA’s vast connections to providers and large volume of medical studies into action. Its aim is to imagine and drive the radical changes that will be shaping healthcare at the middle of this century, though it shaved a few years off in its name because 2047 will be the 200th anniversary of the AMA’s founding.
Cohen acknowledged that a lot of the language in the company’s materials might seem opaque—the announcement describes it as an “innovation enterprise” meant to “catalyze fundamental change in US healthcare.” The company’s actual output is other companies, Cohen explained.
It’s already spun off 1, the network-as-a-service company Akiri, in 2017. That company addresses 1 of what Cohen describes as Health 2047’s 4 main healthcare innovation areas: data management and sharing, chronic care management, productivity, and value. Those all intertwine, however, so there’s a need to look at the industry holistically. Value is a particularly dominant issue that plays into everything in healthcare.
“There has to be a radical transformation in value delivered,” he said. “Dr. Madara likes to say that we spend $3 trillion on healthcare and get $2 trillion worth of value.” Fixing that will require shifting onus of how healthcare is delivered from just the providers to every player in the sprawling game.
It also helps to look at the problems from multiple angles. Cohen said that the team is currently about 25 people, all from different backgrounds in the healthcare equation: tech companies, regulatory agencies, providers, and payers among them. Having the AMA as a “neutral broker” of all of the interest in the space serves as a major advantage, and the fresh $27.2 million in funding will help sustain its work. The CEO said that they planned to spin off more new companies later this year.
“Our idea is to build an ecosystem of companies, and that’s something we can’t do by ourselves,” he explained, adding that Silicon Valley is a great place for that. But the CEO believes that it’s more than just a location of convenience.
“There’s also a sort of Silicon Valley-approach to venture formation, which is starting with a clean sheet of paper: Trying to really wipe away your preconceptions, identify the problem, and then build from there up,” he said.
The new injection builds on a strong start for the AMA’s Silicon Valley experiment. Launched in 2015, it raised $15 million in initial capital and helped lead a $10 million Series A round for its initial spinout, Akiri.