Hartford Business Journal

www.HartfordBusiness.com May 4, 2015 • Hartford Business Journal 17 CT 1Q Venture Deals Company City Industry Amount iDevices LLC Avon Software $10,000,000 SurgiQuest Inc. Milford Medical Devices and Equipment $10,000,000 LiquidPiston Inc. Bloomfield Industrial/Energy $1,146,000 Logicbroker Inc. Shelton Software $1,100,000 NovaTract Surgical Inc. Madison Medical Devices and Equipment $600,000 Innovatient Solutions Inc. Farmington Software $500,000 IsoPlexis Inc. Branford Biotechnology $125,000 Skystream Markets Inc. Stamford Financial Services $1,000 SOURCE: PRICEWATERHOUSECOOPERS/NATIONAL VENTURE CAPITAL ASSOCIATION MONEYTREE REPORT, DATA: THOMSON REUTERS INSIGHT CAN CREATE IT. To succeed today, you need industry expertise and transformative advice to drive your business forward. Find out what CohnReznick thinks at CohnReznick.com. Forward Thinking Creates Results. Joe Torre Baseball Executive, Hall of Fame Inductee YOUR BUSINESS NEEDS A GAME CHANGER cohnreznick.com CohnReznick is an independent member of Nexia International REPORTER'S NOTEBOOK CT venture funding grinds to 1Q halt After a major venture funding surge in Connecticut last year, 2015 is off to a much slower start. Venture capitalists injected only $23.5 million in Connecticut companies during the first quarter of 2015, down from $196.6 million a year earlier. Nationally, venture investment also slowed. Overall, eight Connecticut companies received funding during the first three months of 2015, compared to 12 a year earlier, according to the latest MoneyTree report, a joint effort of PricewaterhouseCoopers and the National Venture Capital Association (NVCA), using data from Thomson Reuters. Avon's iDevices, which makes app- enabled cooking thermometers and probes, and Milford medical device maker Surgi- Quest, were Connecticut's breadwinners each raising $10 million. Bloomfield's LiquidPiston, which announced last month that it signed an agree- ment with the U.S. Department of Defense's Advanced Research Projects Agency to devel- op efficient and light combustion engines for portable and small applications, and Farming- ton healthcare software maker Innovatient Solutions were the only other Greater Hart- ford companies to attract venture funding, raising $1.1 million and $500,000 respectively. Nationwide venture funding fell 10 per- cent to $13.4 billion. Connecticut's drop-off may not be a huge surprise, considering the surge of venture cash that flooded the state last year, when investors poured $518.2 million in 53 Connect- icut companies. That was the highest level of annual investment in the state since 2001. operating loss in fiscal 2014, OHCA data shows. Still, the red ink hasn't stopped hospi- tals from aggressively pursuing physicians. That's because the long-term economics often make financial sense. The main attrac- tion is building up local market share and a strong referral base. As hospitals employ physicians, those doctors will often refer their patients to other doctors or specialists within the network they work for, generating a steady stream of business for the hospital system, CFOs say. Networks also typically force physician practices to cede some of their lucrative ancillary services, like imaging and lab test- ing, which get transferred to the hospitals, said David Bittner, CFO of St. Francis Care. "The hospital benefits from those ancil- lary services, so it's a net positive for the sys- tem," Bittner said. Healthcare reform is also pressuring hos- pitals to form accountable care organizations that increasingly hold providers financially responsible for better coordinating and man- aging the health of their patients, rather than simply providing sick care on a fee-for-service basis. That requires purchasing doctors to build an integrated system and to ensure phy- sicians remain in the community so patients have access to the care they need, Bittner said. Veillette said if ECHN didn't make the decision to purchase physician practices over the past decade, "We wouldn't have all the revenue we currently report on our hos- pital financial statements, thus that's why you can't look at just the performance of the [phy- sician groups] or the hospitals. "We made the decision many years ago…to preserve local access for our community and also to ensure our future financial viability," Veillette said. "Without these physicians in the communities we serve, we'd see a potential decline in our hospital services, and so although these practices on a standalone basis are gen- erally losing money, we'd be losing even more money without them in the community." n CT Health System Financial Performance Network Operating Gain/Loss Operating Margin Bristol Hospital & Healthcare Group $682,381 0.38% Eastern CT Health Network $2,172,721 0.67% Hartford Healthcare $52,186,000 2.06% Lawrence & Memorial Corp. $(18,685,472) -3.97% Middlesex Health System $16,906,000 4.24% St. Francis Care $11,523,000 1.43% Statewide Total $(30,697,472) -0.23% S O U R C E : S T A T E O F F I C E O F H E A L T H C A R E A C C E S S

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