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12 HARTFORDBUSINESS.COM | SEPTEMBER 30, 2024 Dr. Barry Stein is the chief innovation officer for Hartford HealthCare. CONTRIBUTED PHOTO Pain Point CT's largest health systems place bets on early-stage startups says his organization also invests in startups, utilizing four "very clearly defined" strategic imperatives: improving care access, affordability, equality and excellence, meaning quality and safety. Stein said HHC, which owns seven hospitals and generated $5.9 billion in operating revenue in fiscal 2023, understands it needs "to innovate with the world's best startups and companies that are prepared to disrupt," so it has created an envi- ronment "to attract the world's best entrepreneurs and companies to try and help us solve those problems." Neither health system would discuss the specific amounts of money they invest in startup ventures. Angelini did say that YNHH's overall investment portfolio is approximately $3.8 billion, and that its investment in startups "is a relatively small portion" of that portfolio. "It's less than 1%," he said. Stein said HHC works with startups in a number of ways, including being a limited partner in "multiple health- care venture funds," directly investing capital, and signing agreements for an equity stake. Angelini said Yale New Haven Health has "about six investments in actual equity and about 12 that we're working with." The U.S. medical technology industry has been attractive to inves- tors. The sector raised $9.8 billion in venture funding during the first half of 2024, and $15.8 billion in all of 2023, according to research firm Statista. In its 2024 fiscal year, which ended June 30, the state's quasi-public venture capital arm, Connecticut Innovations, invested $14 million in healthcare technology compa- nies, which represented 29% of its total investments. Automating supply chains One of the companies YNHH works with is Clarium, a New York- based startup focused on hospital supply-chain operations. In August, YNHH joined a group of organizations in backing a $10.5 million investment in the company, which was founded in 2020. Clarium developed Astra OS, an artificial intelligence-powered work- flow technology and data system that helps providers automate their supply-chain operations, with the By David Krechevsky davidk@hartfordbusiness.com W hen doctors and nurses treat patients, a primary focus is to manage, if not eliminate, their pain. For health systems that invest in startup and early-stage companies, the goal is, of course, to get a finan- cial return on that investment, but it often also includes the hope of eliminating a "pain point." Connecticut's two largest health- care systems, Yale New Haven Health (YNHH) and Hartford Health- Care (HHC), each use a portion of their investment portfolios to invest in startup ventures, including some that are incubated in their clinical facilities. Michael Angelini, senior vice president and chief investment officer for Yale New Haven Health, which generated $6.6 billion in operating revenue in fiscal 2023, said his organization began making such investments over a decade ago. "We quite often had small, early- stage companies coming to us and saying, 'We recognize you're an academic medical center, and we have a product or service or techno- logical application that we're trying to develop, and we'd really love to do that in the four walls of your hospi- tals, in your clinics.'" YNHH agreed, he said, because the ventures were usually developing "something that would solve a pain point for us." A few years later, Angelini said, YNHH went all in, founding the Center for Healthcare Innovation. "We decided we were going to get better at this," he said. "That we are going to promote a culture of innova- tion … and really get our people on the front lines thinking about how they can do things differently." Solving problems Dr. Barry Stein, chief innovation officer for Hartford HealthCare, Michael Angelini VENTURE INVESTMENT IN U.S. MEDICAL TECHNOLOGY INDUSTRY INVESTMENT TOTAL Source: Statista 2019 2020 2021 2022 2023 $50B $40B $30B $20B $10B 0