Alex Richter, executive director and head of SciTech Innovation Hub
Photo courtesy of SciTech Innovation Hub
MobiHealthNews’ Emerging Technologies Series spotlights organizations developing, scaling and investing in innovative healthcare technologies. What follows is Part 3 of a seven-part series:
Alex Richter, executive director and head of SciTech Innovation Hub, whose Healthcare Innovation Engine won the World Economic Forum’s 2025 Public-Private Collaboration Award for its model of cross-sector partnership in advancing digital health solutions, sat down with MobiHealthNews to discuss how startups can prove value to health systems and insurers.
MobiHealthNews: How does SciTech pilot technologies?
Alex Richter: Fundamentally speaking, we try to be the front door for industry partnerships. So, in healthcare, almost every digital health company needs to deploy its things in partnership with a health system, with an insurer, maybe even through the health system. Maybe they actually directly sell to the health system. Almost nobody works here in isolation in this industry. If they do, they're probably not that successful. Now, that said, we try to make the industry more accessible and help startups with these industry partnerships.
So, partnerships could be a commercial relationship, as in the healthcare system or the insurer is actually the customer. It could be that they are just helping that startup deploy. They're not technically a customer, but they are a go-to-market partner, something of that sort. So there is a range, but what we really do is have this conversation with the startup: What's your model? Do you sell to a health system, insurer? Do you partner with them? What do you need?
And then we try to help get this off the ground, which is a pilot. The pilot could be that this gets directly deployed with the health system in partnership. There are slightly different flavors, but it's ultimately proving the value to the partner, so that subsequently, the partner will help with further expanding and scaling.
I think the thing is, why we do these pilots is that there's a lot of ... not hesitancy, but resignation. Some people are very critical about the actual value of digital health. Health systems, especially.
There was this wave we had when everything was amplified, people started getting their smartphones, and people started building these digital health apps, and a lot of people got sucked into the sexiness and shininess of this. And all these startups ran into hospitals, we got these cool ideas, and then hospitals started working with some of them and realized, wait, this tool is actually not exactly doing what I need, or I actually can't use this because you can't deploy this in my electronic health records. Or the value actually isn't there, or I'm not going to make money of this. Actually, this just leads to more work and less money.
So we are trying to do this work before. We look at the startups. We really clearly frame what is the win/win here for them and the strategic, and then, how do we get to this win/win, which is a lot about IT, implementation and organizational change.
There's a lot of internal stakeholder management of these organizations and getting them to cooperate. It's not easy to get a health system or a health insurer to cooperate.
We run, for example, the digital health committee for RWJBarnabas. We frame it to the health system; this is the technology. We think there's a real, tangible win/win here. This is a way for you to deal with a high-cost patient population, potentially lowering your costs of care. This is an opportunity to make additional money. This is an opportunity to increase patient loyalty. Here's the financial win/win, and we actually put a number behind this, and we double check this number and then it needs to be accounted for, the local specifics. And then we get this theoretical buy-in, and then we're like, okay, to deployers, here are the things we need to do. This is a solution. It's already in the Epic showroom, or it's not right. So, maybe we first need to mock this up and get it into the Epic showroom, or we develop a product first, and then this is the minimum viable product we're going to deploy for the pilot, and this is the longer-term deployment plan that would be in place. And figuring out how we are actually going to deploy this and then actually launch it. And then there's a whole bunch of other legal compliance that needs to get done.
MHN: What makes you excited about emerging technologies?
Richter: Two things. I think the opportunities are already there. So, when I think about all the digital health startups that are out there, there are a bunch that are already great solutions. A lot of them, but it's figuring out how we can separate ... there's a German saying die Spreu vom Weizen trennen – separate the chaff from the wheat.
But it's figuring out which are the ones that actually make sense. And because the space is so big, there's a lot of stuff that makes sense, but you need to filter out a lot in the process. You need to be really rigorous and be honest with yourself. Be also honest about how the industry works. So we have a very realistic, pragmatic assessment, but because there's so much stuff, there is plenty of opportunity.
There's how you talk to VCs, and there's how you talk to clinicians and industry. And sometimes they think they're pitching all the time. When you go to VCs, you need to be like, I'm gonna change the world. We are the absolute yellow of the egg. We are revolutionizing the industry. Here's my 500 billion target market. Fine, fair enough. This may be how the VC industry works.
The second piece is, I think, we are really reaching an inflection point, where the industry is becoming more thoughtful and professionalized about this. Think about it as the last 10/15 years were really kind of the early exploratory phase of this, and there was a lot of failure in the early exploratory, but now we have a lot of learning, and now we actually know what it takes, right? Broadly, what needs to be true. We know that now, and so I think there's a lot of learning, and we're reaching this inflection point where we have these learnings. The money for it is getting better. The two things that hold it back were there's not enough money in digital health. That's increasing now, and even the current administration, think about it what you want, is actually quite excited about innovation and digital health. So, there's increasingly more money in it, also because of value-based care and other conversations – increasingly more money and more and more tech maturity and interoperability. That's the other thing that we long lacked.
So a lot of opportunities. There will be even more opportunities because some of those fundamental things, financial and technical, are starting to change.
MHN: Why do most startups fail?
Richter: Really, it's the biggest thing, startups think, "This is definitely the most important thing that needs to get fixed." And the health system has so many challenges. Often, the thing doesn't rise to ... yeah, it's valid, it's a nice to have, but it's not a must-have.
Health systems don't have the capacity, time and attention to do nice to haves. So, it's really like, is there a burning clinical platform?
The second biggest reason startups fail is it is not financially sustainable. There are not enough financial incentives. And that is a big issue in the industry as a whole, and startups are too optimistic sometimes about their business cases, and haven't maybe even done enough thinking. I see the business case in a lot of techs, way too late and in too little depth. So, more rigor around the actual business case, because health system leaders are accountants.
To build on it a little bit, a thing I see a lot is trust. Physicians, system leaders, a lot do not trust the information they are getting from startups in terms of, what is this data? Where is it coming from? Can I really believe this? I see a lot of startups embellishing their data and making it look very pretty and very compelling. It's obvious. There's something going on here. There's some selection bias. This is like, you are doing a really favorable interpretation of the results.
I think startups need to be more honest with them about what they can do and need to be more honest with clinicians. Don't sell so hard.
They're trying to sell, sell. Have an honest conversation about the problem with the clinicians. Trust is fundamentally one of the biggest hurdles.
You need to have a different pitch and approach when you talk to the health system, which is incredibly fact-based, neutral, realistic and pragmatic. And I think not a lot of startups have figured that out.
