Redesign Health, a New York City-based healthcare startup creator, said Thursday it was partnering with a consortium of children’s hospitals to co-develop a series of new digital health companies.
The KidsX consortium was founded at Children’s Hospital Los Angeles three years ago and includes 32 children's hospitals, such as Advocate Children’s Hospital, Boston Children’s, Geisinger Children's and Texas Children’s Hospital.
With its KidsX build program, Redesign and KidsX hospitals will convene and determine areas to build new pediatric-focused digital health companies. Members of KidsX will also receive early access to pediatrics-related ventures being created at Redesign Health.
The partnership between New York City-based Redesign Health and the KidsX consortium will bring together the group’s 32 U.S.-based providers to brainstorm unmet needs later this month. Business plans will then be developed.
“I would love to have a spin out for four or five companies through this partnership in the next 24 months,” said Brenda Schmidt, head of enterprise growth at Redesign Health.
Omkar Kulkarni, chief digital transformation and innovation officer at Children’s Hospital Los Angeles, said less than 1% of all digital health investment is focused on pediatric patients.
“Solutions that are that are being presented to us don't meet our needs,” Kulkarni said. “There are still problem statements and pain points that our children's hospitals have identified that we can't find any startups [to] will properly solve.”
While Kulkarni admitted some existing solutions can be adapted for pediatric populations, there are core differences between what hospitals need and what's out there in the market. He said hospitals are reimbursed primarily through Medicaid, which requires unique solutions for revenue cycle management. While specific focus areas will be developed once the consortium meets, he also said remote patient monitoring is another area providers desire pediatric-focused solutions.
Individual hospitals will have the option to purchase equity stakes in any potential spinout companies but it’s not a requirement. Schmidt said the projects were not dependent upon provider funding.
While a growing number of providers have opened their own venture studios—including some participating in the partnership—Kulkarni said those shops are not able to move at the same pace.
“I don't know how many health systems out there can go that quickly,” Kulkarni said, who added there were also differences in risk appetite and access to capital. “The commercialization element of it is often not in the core DNA of the health system. They can find people that can do it, but it's often not necessarily what they're focused on doing.”
While the partnership could offer access to KidsX’s provider network, there are plans to require a newly formed company to solely serve pediatric populations.
“Honestly, I have to overcompensate,” Kulkarni said. “I've got to have highly engaged innovation officers, highly engaged IT departments and clinician leads, because they've got to show up. Typically, people would go to the adult help systems for partnership.”
KidsX formed a separate accelerator program with Amazon Web Services in 2021.