There was some big news out of the healthcare industry recently. Maybe it slipped your notice (as it almost did ours), but Cambridge, Massachusetts-based venture capital firm General Catalyst announced the creation of a spinoff company called Health Assurance Transformation Corporation (HATCo). General Catalyst has been involved in the funding of many healthcare delivery and technology ventures, and it decided that the best way to support those organizations and achieve its mission of transforming the business of healthcare through innovation was to acquire and build a healthcare network of its own.
That’s a bold vision, and it will be interesting to see how it transpires. The plan for HATCo is to buy a hospital at some point in the next year and use it as a platform for integrating new technologies and approaches to improve healthcare operations as measured in patient outcomes and the bottom line. In a blog published the day HATCo was announced, General Catalyst partners Hemant Taneja and Marc Harrison M.D. said their goal “is to be in service of healthcare organizations everywhere to change how they deliver a fundamentally better experience for consumers – and to prove the transformative effect of a true partnership between technologists, caregivers and capital.”
“To be in service of healthcare organizations everywhere to change how they deliver a fundamentally better experience for consumers – and to prove the transformative effect of a true partnership between technologists, caregivers and capital.” the HATCo mission.
Incidentally Harrison, who will run HATCo, is the former CEO of Intermountain Health, a not-for-profit healthcare network headquartered in Utah and operating hospitals and clinics mostly in the Rocky Mountains.
Frustration Leads to Innovation
Reading between the lines of their blog, Taneja and Harrison suggest a level of frustration with traditional approaches to innovation that can hinder—if not prevent—progress. That makes sense. In our experience, healthcare organizations are often large and complex organizations that rarely operate in complete unison. Because the focus is (rightly) on patient outcomes, complementary functions may not get the attention required to operate at their most efficient. Taneja has seen it from the perspective of an outsider attempting to introduce new ideas into cultures that are often risk averse. Harrison’s experience is as an insider answering to a board of directors with priorities that likely don’t include reinventing the business of healthcare.
Harrison and Taneja believe that hospitals’ “existing fund structures cannot support” transformative innovation because of resource and cultural constraints, and the unrealistic expectation that results will be achieved within “arbitrary timelines.” Only by acquiring a hospital and becoming “responsible stewards of a health system in one of our nation’s communities” can HATCo achieve its vision, they say.
We are excited and optimistic for the ambitious goals that Taneja and Harrison have articulated and will work to achieve. We have seen what can happen when hospitals recognize and embrace the changes that become possible when the right technologies are applied in the right way. As an example, one large healthcare network customer of ours invested in our Diplomat MFT managed file transfer solution a few years ago. Initially their need was for a means of efficiently and reliably handling some routine human resources tasks, primarily payroll.
Tactical Purchase becomes Strategic Investment
But after recognizing how simple Diplomat MFT is to use, and the attention to detail we’ve put into automating processes like PGP encryption and key management, data capture, destination verification and delivery confirmation, multi-factor user authentication, and secure-by-design architecture and deployment, they realized that Diplomat MFT would be the ideal tool for executing all the transfers of sensitive files containing electronic health records (EHR) and other data regulated under the Health Insurance Portability and Accountability Act (HIPAA), mandated filings with the Centers for Disease Control (CDC), National Institutes for Health (NIH), Centers for Medicare and Medicaid Services (CMS), and other federal and state agencies.
Then, after embarking on a major digital transformation, they put Diplomat MFT to the task of migrating sensitive files from on-premises applications into new cloud-based applications, while also managing file transfers to and from those applications and their extensive network of digital supply chain partners. What’s more, recognizing that many of its smaller vendors lacked the capability to ensure their own secure file transfers, Diplomat MFT has become an enabling technology for the customer in maintaining security for that digital supply chain.
What started as a tactical purchase of Diplomat MFT became a strategic investment in a tool that the customer now depends on for secure and reliable performance. Yes, our experience is a smaller scale than HATCo’s vision, but as a microcosm of the challenges and possibilities that exist in the healthcare industry, they tell us that great things are within reach. We’ll be following their progress.