States invest in rural health tech with Silicon Valley approach
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Louisiana and several other US states are using federal funds to invest in early-stage rural health technology companies, mirroring the fast-paced investment strategies of Silicon Valley.
Josh Fleig, Louisiana’s chief innovation officer, reported his state allocated $20 million annually for five years through the $50 billion federal Rural Health Transformation Program. This program was created alongside cuts to Medicaid spending, with the intention of finding new solutions for rural communities facing doctor shortages and hospital closures.
States compete annually for funding, and the Centers for Medicare & Medicaid Services (CMS) will reduce funding to states that don’t meet their stated goals, including investing in technology innovations. CMS released guidance for states establishing these “tech catalyst” funds, limiting the funds to 10% of each state’s total award. States submitted initial progress reports in August, and must obligate their first-year funds by October 30.
Companies applying for funding must be less than ten years old and have raised under $50 million. Louisiana quickly received over 200 applications for between $250,000 and $3 million in seed money. Greens Health, a company analyzing Medicare claims to improve chronic disease care, and Caret Health, a platform connecting patients with necessary healthcare services, are among those hoping to expand into Louisiana with state funding.
Louisiana plans to take an equity stake in the companies it funds, hoping to recoup investment and improve healthcare outcomes.
