A part of the Affordable Care Act forces insurers to redeploy capital rather than distribute it to shareholders.
According to Rock Health, a healthcare seed fund, digital healthcare companies raised $2.3 billion in the first half of 2014, which surpasses the total raised in all of 2013. That figure is impressive given that 2013 was already a record year at $1.9 billion raised.
One example is Blue Cross and Blue Shield of Florida aka Florida Blue, which established an accelerator for health care startups based in its home turf of Jacksonville.One example is Blue Cross and Blue Shield of Florida aka Florida Blue, which established an accelerator for health care startups based in its home turf of Jacksonville. The program is run by Healthbox, which has thus far invested in at least 47 health care startups – and, on its own behalf, raised seed funding from Blue Cross Blue Shield Venture Partners. BCBSVP has also funded its own incubator, called Sandbox Industries, that invests in startups.
Another example is New Jersey-based Horizon Healthcare Services that 3.7 million members; it invested $3.7 million into Cota, a big data company focused on oncology.
Corporate venture investors tend to have a bad reputation in the startup and venture capital world. At best, they are a potential acquirer of the startups; at worst, they cull ideas and strategies from the startups in which they invest in, only to compete with them down the road. With health insurance companies serving as investors, they have a chance to help ambitious but possibly naïve startups figure out the complicated healthcare system they all operate in.
The Affordable Care Act’s emphasis on efficiency measures is intended to lower the cost of health care by removing incentives to conduct unnecessary tests and procedures. In turn, health care providers are looking to big data and data analytics technologies to create best practices, make better decisions, and get better outcomes.