From regulatory pressures, to high (and growing) operational costs, the healthcare industry faces many challenges.

The good news is incumbents and insurgents in the industry are both tackling pressing problems in the healthcare sector through a mix of product and process innovation, startup creation, and strategic partnerships.

On this episode of Advantaged, a High Alpha Innovation podcast, host Drew Beechler, our VP of Marketing, sat down with two of our Build Directors, Mamta Elias and Molly Cross, to dive deep into what issues are top of mind with leaders at organizations in each corner of the healthcare space today and how enterprises and emerging industry players plan to innovate in 2025 to address those pain points.

Key Takeaways

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• Providers, payers, patients, and employers are all feeling pain in the healthcare arena today, whether it’s due to rising insurance premiums, workforce shortages, or another persistent issue. Regarding issues facing health systems, in particular, Mamta noted longstanding challenges are actually leading to greater (and faster) innovation, including and especially around the use of AI.

• Despite the sizable number of problems facing the healthcare industry, Molly expressed she’s optimistic at the advancements being made in areas like fertility and maternity care, clinical trials, and drug discovery as well as the future of venture funding in the sector, given some major corporate-VC partnerships formed in 2024.

• While there’s no shortage of innovation opportunities in healthcare today, both Mamta and Molly indicated they’re seeing proactive measures being taken by executives at large healthcare enterprises to combat industry headwinds and new technology startups emerge to address “point-solution fatigue” at health systems.

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Listen to the entire 30-minute conversation to learn how incumbents and insurgents alike are innovating in the healthcare sector today and what the venture-funding landscape will look like in healthcare in 2025

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‍Sign up for our Wavelength newsletter to get new Advantaged episodes and other corporate innovation-centric content sent to your inbox, and subscribe to our podcast on Apple or Spotify.

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‍‍Transcript

Drew Beechler: Welcome everyone to Advantaged, a High Alpha Innovation podcast. I am Drew Beechler, our VP of Marketing here at High Alpha Innovation and your host today of Advantaged.

High Alpha Innovation is a venture builder. We partner with leading organizations and entrepreneurs to unlock growth and transformation through co-creating new startups together.

This episode today is part of our "2025 Innovation Trends" mini series.

We recently published an article diving into 10 trends that will shape the innovation landscape in 2025, and we decided to turn that into more concrete discussions going a little bit deeper with a number of our team members and all these trends and really understand where things are heading in this new year.

So here today with myself, we have two of our build team directors, Molly Cross and Mamta Elias, both of whom have really deep healthcare backgrounds and have worked in a number of healthcare partners on the health innovation team, but have years and years of healthcare experience prior to High Alpha Innovation as well.

Today, we're going to be talking all about healthcare innovation trends. We're seeing the impact of some of these major pieces of the puzzle within this industry, particularly with digital HealthTech startups in the landscape, and how they're faring in this new environment as well as how incumbents are reacting to trends, and macro trends that we're seeing happen across the industry.

And so in this 2025 innovation trends article, Mamta, you talked a little bit about both specific trends last year that we saw, rising healthcare costs and workforce shortages continuing to be a challenge.

Maybe let's just start there and unpack that a little bit more around what are some of the key macro trends we saw impacting the healthcare industry last year in 2024.

Mamta Elias: Yeah, Drew, happy to start with that. And thanks for having us today.

So, as you mentioned, I talked about this trend of rising costs in the blog post. And I think that's really a trend that we can see carrying over from the last several years since the pandemic, but was really, still present last year.

And we're seeing these rising costs lead to real challenges impacting the economy. Every single stakeholder across the healthcare system. So on the health system side, they are struggling with tight margins. Employers are grappling with increasingly expensive benefit packages.

Just as one example, premiums are going up 6-7% every year and individuals are feeling that as well, right? They're having to make really tough financial and personal decisions about their healthcare spending. I think what's interesting though is how these rising costs are really starting to drive innovation and also pressure on startups.

So as costs rise, there's a demand for digital health solutions that can help reduce costs, really improve care delivery and quality and ultimately help bend the cost curve, as we say in healthcare.

At the same time, large buyers like health systems and employers are applying more scrutiny when it comes to picking solutions. They're really demanding proof points related to cost and quality outcomes, from their vendors.

And I know we'll talk more about that, but just to make the case that, this trend really is, I think, driving what we're seeing on the innovation front as well.

Molly Cross: And related to that, on the other topic, Mamta, on workforce shortages, that's actually another macro trend that we've seen in the industry for a long time. And that's clinician burnout leading to workforce shortages.

We've seen the number of physicians, RNs, and other healthcare practitioners really nationwide continuing to decline since the pandemic. And while there seems to be signs of slowing, that trend is definitely continuing.

The pandemic certainly exacerbated the issue, but it's important to understand that this trend has roots that actually predate it. It's driven by a combination of demographic, structural, and systemic factors.

And the drivers are so multifaceted, including a rapidly aging population that's requiring more care and educational pipeline challenges, increasing administrative burden and then wage stagnation, particularly for allied health professionals and frontline roles.

So it's a hard problem to solve and the impacts all really flow down into access and quality of patient care. And, in 2024, in particular, I think the most alarming trend for me was the drastic increase in geographical disparities, particularly the impact on access and rural areas.

According to new projections published by the Association of American Medical Colleges, the U.S. is going to face a physician shortage of up to 86,000 physicians by 2036. And that number actually grows to over 100,000 if you include other types of practitioners.

But like I said, that shortage won't be spread evenly across states or geographical areas. And I think that's what's going to have the greatest downstream impacts on patient access and care. 

Drew Beechler: We are in the business of startups and working really often with early-stage companies and early-stage startups, so maybe what on the, the digital health and HealthTech side of things, what did we see last year in 2024?

And what were some of the impacts on some of these trends may be on funding environments for a lot of these companies?

Molly Cross: Yeah. I think we definitely have to talk about what we've been seeing on the funding side of digital health. If you're in the industry, you know that it's been a rollercoaster the past five years.

And I think that we're post that sort of pandemic ZIRP bubble where investment in the sector actually reached almost $30 billion. And that was doubling from 2020 to 2021. And we also saw average deal sizes exploding, reaching almost 40 million. That's all $40 million per deal. And that's all based on Rock Health data in 2024.

We actually continue to see funding levels similar to 2019. That's sort of what we use as a baseline in the industry for funding. Back to sort of around that about $10 billion. But there are some differences. We're seeing smaller rounds, regardless of stage, average deal size. In 2024 was actually down back down to $20 million.

We're seeing a focus on earlier-stage deals and more scrutiny and focus on a path to profitability, which I actually think is a good thing. We also saw less access to the public markets. Only a handful of companies IPO in 2024. And then we've also seen some shifts in the VC ecosystem, which has been consolidating and maturing when it comes to the digital health sector.

We have a handful of large players that are making most of the investments in space. In particular, we see large investors like Andreessen Horowitz and General Catalyst really dominating digital health investments. and these mega funds have been able to really leverage their outsized resources to begin to shape the sector.

Another trend we saw was further concentration of investments in much fewer, very specific value propositions. And of course, a significant portion of funding went into AI companies, which we will talk about a little bit later.

Mamta Elias: Yeah, I think, Molly, one other thing I'd add and shifting to the incumbent side from last year I think this goes along with the trend of rising costs.

We really saw growing scrutiny on healthcare incumbents across the industry, just as a couple of examples in health insurance. If we take Medicare, Medicare Advantage, those plans face really intense scrutiny over risk adjustment practices, and then there was just broader scrutiny over coverage and denial issues, and that gained national attention in some really big ways towards the end of the year.

In the pharmaceutical world, we saw GLP-1 drugs for weight loss really being front and center here these are super effective drugs. They're working. They're helping people reduce weight and manage chronic conditions.

But it came with, this really big conversation around pricing and market access and the balance between innovation and healthcare costs and patient access, and, really, how do we juggle all of that in this world where we're innovating and creating new technology, new medications.

It’s just driving the costs up for the system as well.

And then lastly, on the pharmacy benefit manager side, or PBMs, they really found themselves. under the microscope as well. The FTC is continuing a deep dive into their business practices, looking at pricing, rebate models, a lot of, a lot of jargony stuff in healthcare, but they're really coming under the microscope there.

And Congress has even, towards the end of last year, introduced legislation that would require PBMs to divest their pharmacy businesses.

So, really, a lot of growing regulatory pressure on, on their market dominance and, the extent to which they are vertically integrated. So I think it remains to be seen how much all this scrutiny will drive meaningful change to the system, especially in a new administration.

But I do think it's interesting to see the conversations that this scrutiny is driving among consumers and legislators and the industry overall about transparency. pricing and really just the basic economics of healthcare delivery and in the U.S. 

Drew Beechler: Yeah, let's, let's shift to maybe a little more back to the startup front as well, and not just on the funding side. Where are we seeing a lot of startup activity being pointed in the space last year? What were some of the breakout sectors or solutions and things like that that we saw that were driving a lot of the activity?

Molly Cross: Yeah, that's a great question. I'll just start by saying one of the things that we've been hearing since probably 2023 is ‘point-solution fatigue.’ Mamta alluded to it a little bit earlier. We have to remember that digital health is a relatively new sector and what we're seeing both in some of the funding trends and also consolidation is actually a really natural maturing of the space and we should expect it.

But when I say point-solution fatigue, that actually refers to the complexity and inefficiency that's caused by the proliferation of narrowly focused digital health tools. So each addressing a specific condition or need. and while these solutions really tend to fill critical, really critical gaps in care, the sheer volume of them that are available on the market today actually leads to a really fragmented care delivery.

It greatly increases the administrative burden for both payers and employers, and, ultimately, it actually leads to underutilization by patients. So none of that is great. And what we're seeing is that there's been two main impacts or like shifts that we've seen as a result, particularly in the last year or so, as Mamta alluded to earlier, it's led buyers in this.

In particular, employers and health plans are demanding clear, data-driven evidence of cost savings, and improving health outcomes to justify their healthcare expenditures. And they're only continuing to offer solutions that are having a real impact for their employees or members.

And then secondly, we're seeing a movement towards platform plays and more integrations. This includes an uptick in M&A activity as point solution providers look to expand their capabilities and really make it through a very tough funding environment.

And I think in response to this buyer shift, one innovation trend that we saw starting ‘24 that I loved to see was startups taking more of a community or whole-person care approach.

So, Christina Farr, who I'm a big fan girl of, she has a great, great newsletter that I subscribed to. She wrote a short article about this topic this past fall, where she actually argues that digital health has historically been too focused on conditions, and not focused enough on communities.

This shift requires companies to focus on the person, not the condition, and she points to a number of companies who successfully built for the LGBTQ+ community. For example, this includes Focus Health and also PlushCare when it was started. I say all that, but there was actually one condition in particular that got a lot of action, attention last year, and that's obesity.

And Mamta, again, already alluded to the GLP-1 frenzy that we saw last year. And some might actually say that this topic of obesity and GLP-1s spans multiple conditions as well.

Regardless of the trends we're seeing away from, specific specialties or point solutions, we did see that the increasing adoption of GLP-1s is driving a corresponding demand for digital health tools that would help reduce the cost of those expensive drugs.

So you see weight-loss companies like Noom got into the compounded GLP-1 business. We also saw pharma and digital health partnerships like Roe and Lilly working together to offer Lilly's GLP-1 drug, Zepbound, directly to consumers at a reduced price on Roe's platform.

On the other side, we've also seen increasing interest in food as medicine as an area for innovation, and that's something that will likely continue under the new administration.

Mamta Elias: To add to that. I think we would be remiss if we didn't talk about AI in the year 2024-2025. AI is certainly having its moment in healthcare, just like in many other industries. Last year, we saw a very rapid acceleration of digital health startups with AI as some part of their product offering in digital health.

Just to put some numbers to it, according to Rock Health, AI-enabled digital health startups attracted $3 billion in venture investing just from January to October last year, and that represents 36% of overall digital health funding, so really a meaningful chunk of where the funding is going.

But it's not just funding. We've seen really rapid adoption of these tools in healthcare, especially for administrative use cases. So in health systems that things like AI scribes to help, providers have to chart less and be able to focus more on their patients to tools to help streamline prior authorizations for payers.

And we're even starting to see some patient facing use cases like automating intake scheduling and other parts of the patient-care journey. I think all of these solutions really are a sign of not only how quickly the technology is changing, but really responding to some of the macro trends we've seen around.

Costs and workforce challenges that we're seeing in the industry, and everything is really pointing to this momentum continuing into 2025. I would say, though, that AI startups are facing some of the same hurdles that Molly mentioned other digital health solutions are facing.

So, as the space matured as well, AI startups are having to prove their ROI, show that they're driving outcomes, and then they have the added layer of addressing concerns around data, privacy, security, algorithmic bias, and all those things.

Personally, I was excited to see this past year's continued momentum in women's health. We're really seeing this space continue to grow and evolve. We've seen startups move past more core reproductive health use cases like maternity care and fertility. And that's really where a lot of the focus was early on.

But we're starting to see startups really address women's health more broadly and look at conditions that affect women either uniquely, disproportionately, or just differently than men.

So, for example, menopause care has continued to be a really growing area. Cardiovascular disease, bone health, outer immune conditions, gut health. On the funding side, with women's health startups, funding there was pretty in line with what we saw in 2023.

I think it's unfortunate funding for women's health companies only make about 2% of total healthcare venture funding, which is a little discouraging because women make up more than, make up approximately half of the population, but all of that said, I don't see the space continuing to slow down given all the unmet need that we're seeing in women's health. 

Drew Beechler: I totally agree. And maybe on the flip side, where did we see from the healthcare incumbent side last year — some of the major trends happening there as well?

Mamta Elias: The cost and workforce challenges were there, as we've discussed, I think, because of these economic pressures, we were seeing health systems really focused on where they can reduce costs. And again, AI adoption is really rapid there, especially with these administrative use cases.

I think health systems are also really focused on acquiring new patients as they think about margin and sustainability and really, you see that more in competitive markets, and, and really also doubling down on more money making service lines like cardiovascular oncology orthopedics. We've also started to see a really interesting trend.

Of partnerships, on the health system side, especially on digital transformation, where we're seeing health systems form consortiums, JVs with other health systems and even really partnerships with big tech and startups.

I think with these partnerships, health systems have been trying to have more of a front-row seat at the table when it comes to digital transformation and the solutions being developed for them. So I think they want to go just on the receiving end of startups and digital solutions to really be driving what those solutions look like and really help shaping them.

And I think all of the partnerships we saw last year are really intended to meet that goal for health systems.

Molly Cross: Yeah. I can speak a little bit to what we've seen on the payer side and also on the retail health side as well. But with payers, we've seen this increasing verticalization of payer businesses in recent years. I'd say with most players really trying to replicate the OptumUHC model to some extent, and also to varying degrees of success.

CVS Health, for example, is one verticalized payer. They own a health plan now with Aetna, PBM, providers, pharmacies, and other healthcare services businesses. But they're struggling to make good on a number of their more recent, I would say, giant acquisitions, particularly around Oak Health and Signify and how they're really able to integrate those into their business.

And I think it'll be really interesting to see what CVS Health and other payers do strategically in 2025. and then on the retail health side. We saw retail stores like Walgreens and Walmart, both struggling for different reasons. But, ultimately, they've had to rethink their physical footprint when it comes to the healthcare services they're providing.

So with Walgreens replacing its CEO in late 2023, they then announced last year that they'd be closing 1,200 stores over the next three years. And then you have Walmart that opened 51 Health centers attached to their stores over the past five years. You saw them in April announcing quite abruptly that they'd be shutting them all down. I think that they did that within about 90 days.

For a variety of financial and operational reasons, I think Walmart thought they'd come into the space with a standard retail model and realized how hard it is and some of the financial challenges with the primary care model. It just points to how hard it is for incumbents and other large corporations to continue to innovate and stay on top in this industry. 

Drew Beechler: Yeah, we've seen Amazon, Apple, like many tech giants as well also launched especially over the last four-ish years healthcare divisions, practices, and it just goes to show even what we put on a pedestal as some of the most innovative companies, very tech-forward companies, are struggling tremendously. This space is very intricate. There's no easy button.

Molly Cross: Yeah, I will say I'm very bullish on what Amazon is doing currently in 2025. 

Drew Beechler: Shifting into 2025. What are some of the macro trends that we should be on the lookout for and where are things heading and what should both incumbents and startups be thinking about?

Mamta Elias: January 2025 is a big thing right now to keep an eye on is the policy changes that the new administration is going to make, new administrations always change things up that always have an impact in all industries, and this year won't be an exception to that.

I think it's hard to say for sure what's going to happen, but if we take what we're hearing in these early days at face value, I think there's a few changes we can anticipate.

For example, we might see a more sympathetic view towards Medicare Advantage. They have been under scrutiny, like I mentioned before, but because MA, Medicare Advantage, is privatized Medicare, we might see a decrease in some of that pressure in this new administration.

It's also possible that if RFK Jr. is confirmed as Secretary of Health and Human Services, we might see an increased focus on the impact of lifestyle and health and chronic conditions.

That's really been something he's been talking about for years. I think we'll also see changes on the Medicaid front. So, for example, moving towards block grants, capping federal funding, reducing federal match, NACA, Affordable Care Act enrollees, work requirements

All of these things really have the aim of trying to reduce spending and maybe more of that autonomy to states to decide what they're doing with their Medicaid plans. Medicaid covers one in five people in the United States. So any changes here will definitely be felt. really broadly.

We look at clinical trials and the FDA space. I think we might see less regulation pushing for diversity or representation in clinical trials. I do think industry might continue to do this on their own, just because they want their drugs to be proven to be effective for the broadest swath of the population. Describe those confidently, but we might not see that push coming from the government.

It might come from industry instead and then lastly, I think stricter immigration policies are on their horizon or even already being implemented, and I think that could significantly impact our already strained healthcare workforce, as Molly mentioned before.

Immigrants play a really critical role across healthcare from physicians to nurses to home health aides to nursing home staff. They've really plugged a lot of the gaps we have in our healthcare workforce. And so any, any crackdown on immigration be that. Legal or undocumented, I think, would directly pressure an already really stressed healthcare system, potentially exacerbating some of these workforce shortages in the near term.

Molly Cross: Yeah, I couldn't agree more with that last point, Mamta. And I can sort of flip to more what we're seeing on the market side, and the market dynamics and funding, what we're sort of, thinking we're going to see going into 2025.

I think generally, point solution consolidation, which I already said, and increasing M&A which is after we actually saw M&A  activity hit a decade low last year. I think this will definitely include some private deals, either by strategics or PE firms, which we've already seen.

We already saw with the announcement of Transcarent’s acquisition of Accolade, which is a public company earlier this month. Unfortunately, I think we'll continue to see some late-stage companies really struggling with valuation pressures, and they may have to consider less than ideal acquisitions. And we'll likely see some closures in 2025.

On the other hand, we also have a few really large unicorns potentially looking to IPO this year, like Hinge Health, one of my favorites, and Omada Health, and I would be super excited to see activity on that front. I'm cautiously optimistic that we will, and then on the VC funding side of things really quickly, I actually think funding is going to hold pretty steady and might rebound slightly if and when interest rates continue to decline.

But there's still a really big unknown there of what that's going to look like. 

Drew Beechler: Maybe just to double-click on the startup side, where are some particular areas of focus for startups and new technologies coming out in 2025 that a lot are going to be focused on or thinking about?

Molly Cross: Yeah, I do think we'll see a lot of continuing investment trends and innovation trends from 2024.

So, not to sound like a broken record, but I talked about the GLP-1 and obesity care trends that we've seen in 2024, and you just can't deny that this will continue to be an area of increasing attention and investment, just like how I think Mamta is going to tell us the same thing about AI in a minute, but employers are really going to need to continue to mitigate costs in this area.

Particularly as new and frankly exciting use cases for GLP 1s are being proven out. For example, cardiovascular disease and impact on substance use disorder. and so you'll see food as medicine and weight management probably continue to bring areas of significant investment as wraparounds to these GLP-1 drugs.

But it seems clear regardless that GLP-1s are here to stay. 

Mamta Elias: You already said it, but we're going to still be in the thick of this AI explosion in healthcare this year. I think a lot of the macro trends are going to play out here too, though, where we're going to see.

Consolidation of single AI use cases. So there's like a dozen AI scribes out there right now. Maybe we'll start to see some consolidation among things like that. I think we're also going to see front-end runners emerge and are the best-in-class solutions.

As the space matures as well on the incumbent side, I think they're going to move from more AI pilots to enterprise wide use cases and contracts. And so I think they're going to start looking at their AI vendors and say, ‘Hey, where are those proof points? Show me that ROI that was on your beautiful slide last year when I decided to buy this solution.’ I think they're going to, they're doing that with all of their vendors.

And I think they'll start doing that with their AI vendors as well. So I think we'll see continued growth in these administrative use cases helping reduce burden on clinical and nonclinical staff. Really quick cost savings went to class saving wins. I think we'll also see more of a move into enabling care delivery.

So maybe, for example, applying to reviewing images or diagnostics. I think the focus is going to be on how to augment healthcare workers rather than replacing them, frankly. For example, how can AI make healthcare workers jobs better? Let them focus on the highest value task possible, reduce burnout, and how can we really use AI to improve patient satisfaction?

Even in the first few weeks of the year, we've seen a lot of action in AI already, just as one example, Hippocratic AI, which is a startup that's developing generative agents for healthcare. They raised $141 million this year in their latest round. We're also seeing some really interesting partnerships emerge here.

For example, AWS and General Catalyst announced a new partnership. I think at JP Morgan that aims to accelerate the development of AI tools using AWS technology and leveraging that with General Catalyst’s portfolio of startups

So all of that to say, I think I am going to continue to be a focus for startups and incumbents alike this year.

Molly Cross: Yeah, and, actually jumping on the bandwagon. I have a slightly different take on what we're going to see in clinical trials. Actually, it's similar to what mom just said, right? I think we're not going to see any. See any help, in clinical trial innovation on the regulatory side. But I do think we're going to continue to see a push in the industry.

Clinical trials isn't an area that I'm super familiar with, but I am really excited about what we could potentially see in 2025. I think it could be a transformative year, for clinical trials and clinical research, where we are frankly seeing a historically really risk adverse industry begin to embrace technology for the first time.

The integration of AI and advanced analytics really promises to do everything, from enhanced trial design to optimizing recruitment and also improving data analysis.

So while there's a ton of promise in AI here, I think startups need to be really targeted in their application of AI in the space, and the use cases that they're pursuing, given some of the historical resistance of technology here.

And, in addition to AI, we're also seeing an increased adoption of wearables. That's a trend that I think will take off in 2025. And this is wearables, specifically, in the context of clinical trials. They are enabling patient adherence and better, easier data collection.

And they're also enabling more decentralized trials, which ultimately will result in more diverse participation, which is something that is good for the industry and good for the individuals and a greater ability to engage these traditionally underserved communities, and clinical research.

So I think that's a space that we should be watching in 2025. 

Mamta Elias: Yeah, I agree. I'm really excited to see all of this digital innovation start to hit. So clinical trials are more head on.

I think one more thing I would add here. I think we'll see this continued move to platforms not point solutions like you mentioned for last year, but I think there's going to be a few exceptions here. I think we will see point solutions thrive in high cost areas. So, for example, dementia and oncology.

These clinical areas are really unique. Opportunity, I think, for point solutions because they are high cost areas because they're really. clinically nuanced and have a really specific and unique patient journey. So in dementia, just as an example, we're seeing really, cutting edge therapeutics emerge here for, for the treatment of early stage Alzheimer's disease.

We could imagine a world where a startup starts to emerge to really provide the digital support patients and caregivers need. Around these novel therapeutics. We also know that lifestyle and caregiver support is a big part of managing Alzheimer's. So I could imagine, we would see continued startup in these spaces specifically.

Overall, I think move towards platforms, but we'll see point solutions where they're able to tackle really, high cost and high priority. clinical areas. 

Drew Beechler: Shifting maybe to the other side of the equation, what approaches do you think incumbents will take in 2025, given all the macro trends we've discussed, the growth and innovation opportunities on the horizon?

‍Mamta Elias: Yeah, I think we're going to see an acceleration of partnerships in healthcare between incumbents, big tech and even startups. So, as we discussed before, healthcare incumbents are really eager to drive innovation and transformation versus just being on the receiving end of these solutions that are developed by startups.

I think, at the same time, big tech and startups know that they can create better solutions if they build to solve real world problems that incumbents are facing. So I think everyone in the industry is really starting to see partnerships as a major lever towards really driving better outcomes, better solutions, and really moving the industry forward as a whole.

Just as an example, we're early in 2025, but we have already seen some interesting things. Partnerships emerging in healthcare. For example, NVIDIA announced a new partnership with the Mayo Clinic. I think again at JP Morgan to accelerate the development of foundation models. So combining Mayo Clinic pathology data and patient data with NVIDIA tech.

We also saw Andreessen Horowitz and Eli Lilly announce a partnership on a $500 million biotech venture fund. And so the idea here is not that they're only giving capital to startups, but really. Providing strategic insights from Eli Lilly and resources to help startups build their solutions and their companies.

Molly Cross: Yeah, it'll be interesting to see how DeepSeek impacts the U.S.-based AI activity going into 2025. Another partnership that I was excited to see this year was Omada and Amazon. I've already talked highly about both of these companies, but really to make Omada's diabetes program available on their health services platform.

I don't know, Sort of, to the point earlier about I'm bullish on what Amazon is doing in healthcare. Currently, I don't know if anyone has used Amazon's new health services, but it's pretty impressive. It's easy to use. It's cost-effective. Everything that you would expect in a consumer experience from Amazon.

And I think after a few fits and starts in the space, they're finally figuring out a model that works and it's exciting to see a large organization from out of the industry. Finally seem to get it right and maybe be able to compete with the current paradigm. so I'm very excited to see that. and then getting a little bit closer to home.

We also see in our day to day work here at High Alpha Innovation, we work with large healthcare organizations like health systems, payers and pharmaceutical companies, but we see the desire to be at the forefront of innovation. So, not just partnering with startups that already exist in the world, but building and investing in them to solve real needs they have in their business.

I personally saw the success of this approach firsthand. I've been working with the health system over the past year. We've launched multiple startups and each one is a really novel solution that solves one of their key pain points that they wouldn't have otherwise been able to solve if they weren't really taking the reins on the innovation and venture building.

Mamta Elias: Yeah, that's a great point, Molly. And, to add to that, we're really finding the benefit of our approach, when it comes to partnering with large organizations, because they get to identify the specific problems they want to solve. And then our job as their partner is to really validate that there's a broader market need and develop a viable solution and business model around that problem area with the goal of creating what we like to call advantageous startups.

So by advantaged, we mean durable companies that can get to market faster, secure contracts more quickly and really meet them, really meet key milestones more quickly, ultimately increasing a startup's chance for success.

I think advantage is particularly crucial in today's healthcare.

The environment we've talked about is maturing. We're seeing all of these dynamics. We're seeing AI market pressures, policy changes, all of it. And so I think as much as we can really, build startups from the beginning that are, advantages that can really deal with those, those challenges, headwinds and really, can be built to prove ROI and have scale and all of that.

I think it just means we're going to have better startups that are making traction and really, making an impact in the industry more quickly and more sustainably.

‍Drew Beechler: I couldn't agree more. It's such a great way to end this episode. I think we have a lot to look forward to next year, a lot of unknowns, but there's so much opportunity and there's so much exciting work that we are very grateful that we get to do. We get to work on really, really hard problems that they really matter to the world, which is a ton of fun.