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Austin accelerator program aims to boost health tech startups

Seven months ago, Athenahealth announced plans to create an Austin-based accelerator program for health care technology startups.

The accelerator program, called More Disruption Please, now has its first participant — a 10-person software maker called Patient IO – and it’s looking to add more.

“There are a lot of opportunities in health care, but there are also a lot of extra hurdles that entrepreneurs face,” said Mandira Singh, senior manager of business development at Athenahealth. “It really helps when you can collaborate with other entrepreneurs who are also dealing with issues like HIPAA regulations and the FDA and long sales cycles.”

Based in Watertown, Mass., Athenahealth provides cloud-based services such as electronic health records, medical billing and other services for doctors’ offices, hospitals and other facilities nationwide.

The company, which has about 4,000 employees worldwide, last year chose Austin for an expansion of its research and development operations.

In exchange for incentives of $679,500 from the city of Austin and more than $5 million from the state, Athenahealth agreed to create more than 600 jobs at its offices at the Seaholm Power Plant development downtown. (The company currently has 104 Austin employees; the accelerator jobs aren’t counted toward the incentives deals.)

The accelerator program provides seed funding, free office space, access to health care industry experts and other resources to startups that are addressing problem areas in the health care delivery system.

Member companies also have access to Athenahealth’s more than 72,000 health care providers. Athenahealth makes either equity or convertible debt investments in all portfolio companies. It also runs co-working spaces where digital health companies can rent space but don’t necessarily receive an investment.

By partnering with startups, Singh said, Athenahealth gets access to new products and services “that fill key product gaps for our clients.”

Patient IO, which is developing a care coordination platform for doctors, received an undisclosed investment and will soon move into Athenahealth’s offices.

The three-year-old company is building a software system to help doctors keep in touch with patients, particularly those with chronic illnesses, between visits.

“Patients seeing several doctors at once are often juggling multiple to-dos, and the status quo in health care today is it’s almost always done with telephone and visits,” said Jason Bornhorst, Patient IO co-founder and CEO. “We allow the doctor to communicate with the patient directly using smartphone apps and web portals. It takes that information and puts it directly on the patient’s phone.”

For a patient with chronic heart failure, Patient IO would provide a personalized app with tasks specific to the treatment plan, including medication reminders and side effects tracking. It also lets patients securely message their medical teams.

“For a chronic patient seeing five to 10 doctors a month, it’s a great way for them to stay organized and in touch with the care team that can jump in when needed,” Bornhorst said.

The software is currently being used at 27 clinical sites.

Patient IO previously raised $1.5 million from investors including Mercury Fund and Techstars Ventures. The new investment from Athenahealth will enable the company to add five new employees in engineering and sales over the next six months.

But perhaps the biggest benefit is getting direct access to Athenahealth’s extended network of health care providers. “More Disruption Please is in effect a marketplace. It’s a way for Athenahealth’s customers to interact and get familiarized with new software that they can purchase and install with one click,” Bornhorst said.

The Austin accelerator program is Athenahealth’s third following launches in Boston and San Francisco.

Although there are already a multitude of tech incubators in Silicon Valley, Boston and Austin, Singh said Athenahealth saw the need for a program tailored specifically to the health care industry.

“Building a health care technology company is very different than pushing an app to an app store in a number of weeks,” she said. “You get one shot, and you’re either compliant or you’re not. The onus is on you to create a product, test it and show the return on investment, which is so important in health care right now.

“You have to be prepared for a sales cycle of over a year, often giving it away for free initially. It takes staying power and conviction. That’s where being around other similar companies can keep you going.”

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