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Friday, Apr 12, 2024

Incubator to Back Innovators of Cost-Saving Health Care

Startups aspiring to lower the cost of health care will soon be invited to join a new incubator getting established under the West Health umbrella.

The West Health Incubator is part of a collective West Health effort that also includes the West Policy Center, the West Health Investment Fund and the flagship West Health Institute, formerly known as the West Wireless Health Institute.

Under the guidance of recently appointed Chief Executive Nicholas J. Valeriani, West Health aims to reduce health care costs through innovative, cost-effective technologies and solutions in four areas: innovative medical research, policy, investment and entrepreneurship.

The 10,000-square-foot West Health Incubator on the West Health Institute campus in La Jolla is a key ingredient to advancing the mission as participating companies will be developing ideas and products to solve the riddle of rising and unsustainable health care costs.

Joseph M. Smith, chief medical officer and chief science officer for West Health, said a public announcement about which companies are entering the incubator could be made by September.

‘A National Imperative’

“There’s a growing appreciation of the fact that lowering the cost of health care isn’t just a do-gooder mission, it’s a mission-critical need,” Smith said. “It’s a national imperative as well as a very good business strategy.”

The impetus for the incubator stemmed from the West Health Investment Fund’s investments into early stage companies. Having made six investments to date in companies outside of the incubator, Smith said West Health realized startups needed an environment that’s more conducive to their success.

So along with basic office infrastructure and accompanying assistance with back-office functions, human resources and recruiting talent, companies soon arriving to the incubator will be connected to West Health’s affiliates across 17 states. These aligned organizations include Norton Healthcare, Johns Hopkins University, Massachusetts General Hospital, Department of Veterans Affairs and, locally, UC San Diego and Scripps Translational Science Institute.

As part of the bargain, companies seeking admission to the incubator must receive an investment commitment from the West Health Investment Fund. Launched by Gary and Mary West in 2011, the fund provides risk capital for companies with cutting-edge health care technologies and services that offer the potential to substantially lower the cost of health care, according to the West Health website. The fund is seeking to fulfill the cost-cutting vision by committing as much as $1 million to $2 million to each company in the incubator.

Smith said the endeavor to provide physical and financial resources to mission aligned companies with credible business plans is clearly a philanthropic driven activity on the part of Gary and Mary West, the sole supporters of West Health.

“They’re helping San Diego to realize its opportunity of substantiating its claim to be the center of health care innovation in the U.S.,” said Smith, of West Health. “I think they’re proud to do this in San Diego.”

Helping Companies Meet Challenges

Gary West said early stage health care companies face multiple challenges in their efforts to develop and deploy innovative technologies.

“By offering both significant intellectual and economic capital through our investment fund, infrastructure through our incubator and access to our network of health care partners, we are de-risking technologies and creating a launch pad from which disruptive, cost-lowering technologies can reach the public,” he said in a statement.

Mark Cafferty, San Diego Regional Economic Development Corp. president and CEO, said small and medium-size businesses that already exist in the region are just as valuable to stimulating economic growth as bringing outside businesses to the area. With the right mix of human resources, capital and facilities, companies in incubators accelerate the idea process, which can lead to breakthroughs and the addition of meaningful, high-paying jobs that perpetuate good things for the rest of the economy, he said.

Cafferty added that the health care industry is starting to see the same type of technology innovation that has existed in so many other sectors.

“We have all the right resources around us to be a powerhouse internationally for health care IT,” Cafferty said. “San Diego is poised to shine in the future.”


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