Dr. John Halamka, president of Mayo Clinic’s healthcare technology and big data effort, Mayo Clinic Platform, last week traveled more than 6,000 miles to kick off the Rochester, Minnesota-based health system’s latest technology initiative: a partnership with Sheba Medical Center in Tel Aviv.
The two hospitals will co-develop and validate artificial-intelligence algorithms, including those used for image analysis, digital pathology and clinical specialties like cardiology, neurology and nephrology.
Mayo Clinic and Sheba Medical Center also will support AI startups participating in one another’s innovation programs. For instance, Mayo Clinic will help AI startups working with Sheba Medical Center understand U.S. market needs, compliance with the Health Insurance Portability and Accountability Act, and Food and Drug Administration clearance.
“We believe that to be successful in global health care transformation, which is [the] Mayo Clinic Platform vision, you need to work globally and embrace the best technologies across the globe,” Halamka wrote in an email.
Mayo Clinic is the latest healthcare organization to strike a deal abroad as a way to tap into a wider ecosystem of AI discoveries.
Funding for healthcare AI startups across the globe nearly doubled last year, as investors poured $12.2 billion into such companies, according to data compiled by CB Insights. Healthcare AI funding hit a quarterly record high in the year’s fourth quarter, at $3.7 billion.
While U.S.-based startups dominated healthcare AI funding, nearly one-third—or $1.1 billion—of fourth-quarter funding went to firms in other regions, mainly in Asia and Europe.
Nevertheless, it’s not an easy journey for products moving into the U.S. market, particularly for technologies picking up traction like AI. Startups must establish business models that align with how U.S. healthcare works and navigate a complex regulatory approval and payment landscape composed of a medley of Medicare, Medicaid and private payers.
Just because a startup has a regulatory approval—like CE mark, which signifies European regulatory approval—from another government doesn’t mean it’s a shoo-in to be greenlit by the U.S.’s FDA. In fact, it’s common to see companies obtain CE mark for devices three or more years before putting the product on the market in the U.S., said Brian Scarpelli, senior global policy counsel at the Connected Health Initiative, an industry coalition that advocates on health technology policies.
That’s where collaborations with U.S. healthcare organizations can prove fruitful. The partnerships can provide healthcare organizations with early access to innovations, and entrepreneurs with support as they develop a localized business plan.
AI startup Soundable Health was founded in South Korea in 2017 and in 2018 established its headquarters in San Francisco. “It was a very natural decision for us,” said Catherine Song, its founder and CEO.
The startup’s primarily working in the U.S., although it’s also exploring partnerships in Europe and South Korea.
During Soundable Health’s first few years, it focused on developing the AI technology. But in 2020, the company turned its focus toward commercializing the first product—an app that assesses bladder health by analyzing the sounds of a patient’s urine flow—and preparing to sell to academic medical centers and specialty urology clinics in the U.S.
For support as it learned the intricacies of the U.S. healthcare system, Soundable Health collaborated with the not-for-profit Korea Small-Medium Enterprises and Startups Agency, which is funded by the South Korean government, and Chicago-based healthcare startup incubator Matter.
The program, dubbed the Korean SME U.S. Market Adoption Program, helps Korean companies tailor their product, sales and fundraising strategies for the U.S. Matter has a similar program for Canadian startups and in June partnered with Amazon’s cloud arm for an incubator focused on startups based in Europe, Middle East and Africa.
Texas Medical Center, a medical district based in Houston, has been developing infrastructure to help launch international startups. The group’s BioBridge program—which started with Australia in 2016—partners with agencies in other countries and helps startups from those regions develop go-to-market strategies and test their products in the U.S.
The program has expanded with the United Kingdom, Denmark and as of May, with Ireland. In many cases, startups that enter the U.S. through BioBridge establish their U.S. base by the Texas Medical Center campus, giving member hospitals continued access to their work, said Bill McKeon, Texas Medical Center’s president and CEO.
“We want the best solution—whether it be a next medical device, or a next drug, or a next digital solution—we want that to happen on this campus,” McKeon said.