Health Care Council of Chicago Releases First-ever “State of Health Care” Report

The Health Care Council of Chicago (HC3) – an initiative of MATTER and Leavitt Partners – presented a first-of-its-kind white paper outlining the state of the healthcare industry in Chicago, during an event today at MATTER with Chicago Mayor Rahm Emanuel.

The report concludes that Chicago’s $69 billion healthcare industry has a diversity of assets that position the city to accelerate innovation and disruptive solutions at a pace uncommon in U.S. cities.

“This report confirms what we have long suspected – Chicago is an unparalleled hub for healthcare innovation,” said Mayor Emanuel. “Thanks to the ingenuity of our businesses and incubators – like MATTER – we have the ability to harness Chicago’s potential in ways we could never imagine before and build a stronger healthcare industry for our entire nation and world.”

Bolstered by a core of world-class care institutions, medical technology enterprises, and life sciences researchers, the report identifies five critical factors that make the city a world healthcare industry leader:

  1. The unparalleled volume and diversity of healthcare industry expertise, across all industry sectors;
  2. The strongest presence nationwide of healthcare-focused private equity firms, as well as a robust venture capital community and the city’s designation as the second-best city in the nation for startups;
  3. The graduate medical education and vocational training system that pumps talent into Chicago for productivity gains and expansion to meet tomorrow’s needs;
  4. The environments for development and growth of new technologies through the 90 co-working spaces and incubators throughout the city, the community of accelerators, and corporate partners seeding innovation; and
  5. The unique collaborations amongst and between all stakeholders that help to identify new opportunities and investments through partnerships, association platforms, community events, and HC3.

The report also concludes that Chicago has limitations challenging its place as a preeminent healthcare hub: ongoing political and budgetary impasses, low insurance coverage rates, underlying health disparities and social determinants requiring redress, and a delivery system that fails to coordinate care and drive innovation.

“We believe that there is an incredible future for this city that can be realized through a common understanding of what makes us great and collaboration that advances our individual and collective interests. We have tremendous challenges to address here at home and untold contributions that can be made to the rest of the system at a time of profound change in healthcare,” said David Smith, Principal at Leavitt Partners.

“This report tells us that Chicago is home to more healthcare expertise and resources than anywhere else in the country,” said Steven Collens, CEO of MATTER. “By working together, Chicago has a unique opportunity to emerge as a world leader in healthcare innovation.”

Read the full “State of the Chicago Health Care Industry” report.

To learn more about becoming a member of HC3, please contact Laura Lewandowski at

About The Health Care Council of Chicago (HC3):

The Health Care Council of Chicago (HC3), an initiative of MATTER and Leavitt Partners, enables Chicagoland health care companies to expand their intellectual, technical, human, and financial capital. A collaborative platform designed to facilitate success in the value-based health care economy, HC3 highlights the profile of Chicago as an epicenter of American healthcare.

How OSF HealthCare and Regroup Therapy Virtualized Mental Health Treatment

Posted June 22, 2017
By Devon Leichtman
Associate Marketing Manager – MATTER

When OSF HealthCare developed their innovation model, they turned to a world outside of healthcare for inspiration. Borrowing from such non-healthcare companies as Google, Apple, and Caterpillar, OSF CEO Kevin Schoeplein  along with President Sister Diane Marie, Chief Strategy Officer Michelle Conger, and Senior Vice President and Chief Transformation Officer Dr. Jeffry Tillery  deployed an innovation team with the freedom to operate separately from the rest of the organization.

OSF’s innovation team focused on building a culture that would allow them to operate more like fast-moving tech companies. According to Matthew Warrens, vice president of innovation partnerships, “tech is all about ‘fail and fail quickly’” – a mindset that has, for good reason, never been popular in healthcare. The idea of “embracing failure” does not come naturally in an industry where failure can mean deteriorating health outcomes and lost lives.

But the OSF innovation leadership team, which includes Warrens and Innovation Partnerships Director Rob Jennetten, understood that the tech industry’s strategy for developing innovative ideas and disrupting existing markets – casting a wide net and expecting many solutions to fail – could work in healthcare if they set it up correctly. And in addition to building their internal capabilities, OSF looked externally for partners to help them with their mission. OSF was a founding partner of MATTER, where they have connected with dozens of leading-edge healthcare startups.

One of the companies they met through their relationship with MATTER is Regroup Therapy, a telemedicine solution that helps healthcare facilities augment their behavioral health capabilities. For most patients, seeing a behavioral health specialist – even if only for a quick consultation – is a painful process, requiring a referral from a primary care physician, a separate appointment, and other out-of-pocket expenses. David Cohn founded Regroup Therapy in 2012 to use telemedicine to make behavioral healthcare more accessible to patients.

OSF initially moved forward by piloting Regroup Therapy’s “doc-to-doc” model of telemedicine. It works like this: if a clinician needs a behavioral health consultation for a patient (or if a patient requests one), the doctor can use Regroup Therapy’s software to immediately consult a behavioral health specialist remotely. This system avoids a long and slow referral process, and keeps the patient from having to schedule a separate appointment, often in another location, with a behavioral health specialist.

The initial rollout of Regroup Therapy’s product has been promising. Recently OSF Ventures, the corporate investment arm of OSF HealthCare, led a $6.1M Series A investment to help them expand their product nationwide.

Best practices

The OSF collaboration with Regroup Therapy is validation that their innovation model is working. They have the mandate from leadership to explore novel technologies that can help them achieve their vision to transform healthcare to improve the lives for those they serve. Their innovation team has the remit to engage externally with companies such as Regroup Therapy, and the resources to bring solutions inside the system. And their investment arm, OSF Ventures, led by Vice President Stan Lynall, accelerates the growth of the most promising healthtech startups.

OSF HealthCare is currently working with a number of other MATTER member startups, and we expect to make more announcements in the coming months as these partnerships continue to develop.

How a One-year Old Startup Tackled an Industry Giant’s Problem

Posted March 22, 2017
By Devon Leichtman
Associate Marketing Manager – MATTER

This is Mike Abbadessa, senior director of medical affairs at Takeda Pharmaceuticals.


And this is Jason Smith, technology executive and computer scientist turned healthcare entrepreneur. He and Dr. Lev Becker founded the startup, rMark Bio, in 2015.


The Problem

In early 2015, Mike’s team at Takeda was looking to identify Key Opinion Leaders (KOLs) by identifying patterns in practice. KOLs are influencers in the biochemical and pharmaceutical industries. Often KOLs are biochemical researchers who study chemical and biological interactions, and as such are often the first to know about potentially helpful or harmful interactions between chemicals.

Pharmaceutical companies consult with KOLs to ensure that the therapies they create are being used safely and are producing expected outcomes in patients. Additionally, these consultations keep the pharmaceutical company on the leading edge of new or emerging thinking about how to treat patients, as KOL’s typically operate on the frontiers.

Over the past 5 years Takeda used ready-to-use technologies to identify primarily clinical KOLs, but the results were discouraging, as these products weren’t customized to Takeda’s needs and their outputs weren’t specific enough to truly answer the company’s questions. Mike and his technology team worked to combat this lack of specificity by conducting an experiment (in collaboration with the Takeda Digital Accelerator team) with an established large-company / corporate consulting vendor to develop machine learning processes. Although the pilot provided some insights into the use of artificial intelligence (AI) for discerning specific KOL segments, the capabilities of the supplier were not the perfect fit at the time.

In 2016, Takeda, through the Takeda Digital Accelerator team, nominated Mike to spend his Fridays at MATTER as a Living Lab fellow, a program designed to encourage collaboration on common healthcare challenges between innovators within MATTER’s healthcare industry partner organizations and member startup companies.

Jason, meanwhile, was working to identify which academic researchers were studying conditions and subject matter relevant to the development of new drugs, hoping to license his product to pharmaceutical companies looking for the latest in R&D. To help this process his team was developing a deep learning platform, allowing rMark Bio to learn and adapt to what recommendations are most helpful to its users.

But while his product was promising, Jason was struggling, too. He was having trouble connecting with the pharmaceutical executives who would eventually use his product, and he ultimately didn’t know if he was building something that pharma companies would actually pay for.

The Pivot

At this point, MATTER VP of Programs Maryam Saleh recognized the potential synergies between Mike and Jason’s projects and introduced the two. The collaboration made sense on paper: Jason would get the feedback he needed, while Mike had a potential solution to the problem he’d been looking to solve.

But Mike’s problem wasn’t exactly the one Jason was solving. He needed to identify integrated delivery network and accountable care organization “KOLs,” not the academics that rMark Bio was working on identifying. After a few initial meetings, Mike realized rMark Bio’s potential for filling the gap identified from the previous experiment. Mike then pitched Jason on a big pivot: if rMark Bio could extend their platform and algorithms to identify KOLs that meet changing criteria for engagement with the Medical Affairs department, Takeda may be interested in licensing it.

It was a much broader scope than Jason and Lev had initially planned for their minimum viable product, however, they recognized that a decision-maker at one of the largest pharma companies in the world was telling them explicitly how to work with them.

So they went for it.

The Project

Because both individuals were active at MATTER, they could meet regularly. Jason learned a great deal from these meetings as he got an inside view into Takeda’s operations, previous attempts to solve the clinical KOL problem, and their decision-making process. He worked with Mike to get his product audited and accepted by Takeda’s IT. Further, he learned how to navigate the legal and procurement processes of a large pharmaceutical company.

For his part, Mike could provide insights to customize portions of rMark Bio’s identification and recommendation platform to ensure they met Takeda’s dynamic needs up front, rather than trying to force ready-to-use products into an awkward fit or struggling to wade through tons of raw data output from machine learning algorithms.

Takeda essentially had the best of both worlds: the customization and computing power of machine learning with the user interface and ease of use of ready-to-use solutions.

Today, rMark Bio and Takeda have a pilot agreement, under which rMark Bio will deploy its app to help about 20 Takeda employees identify clinical KOLs. Mike and Jason hope to continue the partnership after the pilot, and Takeda plans to be the first enterprise to license rMark Bio with the potential for 60 Takeda employees to use the technology, and perhaps even more, across the globe.


Both parties came away from the collaboration significantly better than before they decided to work together. Takeda essentially got a product that immediately solves an existing problem, without any up-front research and development cost. rMark Bio, meanwhile, got a product roadmap from a big company, immediately bordered their future opportunities for companies with similar challenges, received a potential customer, and gained a strong understanding of the buying and audit processes at big pharma companies.

The two learned how to “speak each other’s language” as well. Jason knows how to communicate his value proposition in a way big pharma would accept. And Mike learned to appreciate the startup “language” with which Jason communicates, embracing the genuine and open communication style that rules the startup world. Freely sharing ideas and criticisms, as he and Jason do, is a tenet of true innovation, while corporate culture tends to favor abstraction of language and obfuscation of ideas.

Jason now feels comfortable navigating the sales cycle at companies like Takeda and says it’s critical to have an internal champion, like Mike, as early as possible in the sales process.

Mike agrees. He believes his role as champion for innovation and startup liaison was critical to Takeda developing a solution for KOL identification, and says that any company looking to emulate his success with rMark Bio needs a senior executive dedicated to innovation. Further, he credits Takeda’s leadership for providing the resources and vision to support innovation projects.


Mike and Jason’s successful collaboration is an example of exactly what we do at MATTER. Thanks to Jason’s MATTER membership, Takeda’s MATTER partnership, the Living Lab program, and Maryam’s warm introduction, Jason and Mike could work together and build something that neither could have done on his own.

Stories like Mike and Jason’s encourage the innovators here – both those working on their own startups and those within our healthcare industry partner organizations – that it is possible to break out of their individual silos and use innovation to accelerate the development of game- changing solutions that can move the industry forward.

Nobody Does It Better: Mayo Clinic CEO Discusses Innovation and System Transformation

Posted:  March 20, 2017
David W. Johnson, Author in Residence

On March 8, Dr. John Noseworthy, Mayo Clinic’s CEO, stopped by MATTER for a “fireside chat” in front of an overflow audience. Dr. James Madara, the American Medical Association’s CEO and MATTER board member, joined Noseworthy on stage for a lively exploration of healthcare innovation and transformation.


Mayo Clinic is the world leader in complex disease diagnosis and treatment. People from around the world and all 50 states trust Mayo doctors with their lives. Mayo’s multi-disciplinary teams, not individual physicians, drive medical decision-making and deliver exceptional patient experiences.

Since its 1864 founding, physician-CEOs have led Mayo and built a cohesive culture that does not tolerate prima donnas. Salaried physicians and aligned staff share information, engage patients, and collaborate fully. Always putting patients first is the secret sauce that energizes and shapes Mayo’s clinical care, research, and business development.

Examples of clinical excellence and innovation abound:

  • 18% of Mayo surgeries have two surgeons operating simultaneously on patients. This reduces the treatment burden on patients, leads to better outcomes, and is more efficient. All hospitals should do this, but few do.
  • In 2016, Mayo conducted its first-ever face transplant in a 56-hour operation. The team conducting the transplant rehearsed the complicated surgery over the course of 50 Saturdays in the 3.5 years leading up to the surgery.
  • Mayo physicians have conducted over 450 Whipple procedures – the most complex surgery a general surgeon will do – laparoscopically (through two small incisions).
  • Easier, earlier disease diagnosis is a lifesaver. In partnership with ExactScience, Mayo researchers have developed a simple stool test to detect colon cancer. They also are close to developing a blood test to detect lung cancer.

Partnership between bio-medical engineers and clinicians drives Mayo’s relentless process improvement. A request for three new cardiology operating suites triggered a full review of Mayo’s procedures for cardiac surgeries. The initiative created enough incremental capacity to hire three new cardiac surgeons without building any new ORs.

Mayo Noseworthy Madara AMAIn response to a question regarding the “sluggishness” of physicians to embrace innovation, Noseworthy recommended engaging physicians with data. Madara noted that physicians spend two hours doing data entry and compliance for every hour with patients. This generates both frustration and burnout. Innovation communities, like MATTER, succeed when they enable physicians to engage with patients, practice efficiently, and deliver better outcomes.

Despite their focus at the pinnacle of the care pyramid, both Noseworthy and Madara stressed the need for better public health education and literacy. Metabolic syndromes cause most cancers and heart disease.

Reversing the spread of diabetes is of paramount importance throughout the world. Half of China’s adult population is pre-diabetic. The economic consequences of treating chronic disease are catastrophic. Promoting constructive lifestyle change is “the biggest opportunity in developed countries,” Noseworthy observed.

In this sense, Noseworthy ended the fireside chat where he began, embracing the necessity of innovation in transforming healthcare. Addressing MATTER entrepreneurs in the audience, Noseworthy proclaimed, “Healthcare’s future is in this room!”

Watch the entire event here.

CMS Administrator Andy Slavitt on the ACA, Healthcare Data, and Innovation in Healthcare

Posted December 22, 2016
by Devon Leichtman
MATTER Associate Marketing Manager

On Wednesday, December 7, 2016, MATTER welcomed the administrator of the Centers of Medicare and Medicaid Services (CMS), Andy Slavitt, for a discussion about the future of healthcare. During his interview with MATTER CEO Steven Collens, he touched on the future of the Affordable Care Act, how entrepreneurs can influence healthcare, and the growing impact of data and analytics.


The present and future of the ACA

Under the Affordable Care Act, 20 million Americans have gained health coverage and, according to Slavitt, “95 percent of metrics [to measure the effectiveness of the healthcare system] are higher now than eight years ago.” He is the first to acknowledge that, despite the gains, the ACA is far from perfect. There was much talk during the campaign about repealing the law, and there is significant uncertainty about what will happen under the new administration. Slavitt laid out two potential paths forward for the Trump Administration: to “take what we’ve accomplished so far and build on it… [or] start from scratch [with a] whole new approach and reset the rules.”

While there is mounting pressure on the incoming administration to make sweeping changes, Slavitt predicted that Trump’s team and the Republican majority in Congress will be more cautious in repealing the ACA than some think, reminding those in attendance that “senators don’t want to throw one-third of the economy into chaos, [or] restrict coverage for 30 million people.”

He also said that while he believes many pieces of the ACA will be kept, the parts that are repealed are likely to be replaced. Any replacement, he suggested, would need to do four things to be considered an improvement:

  1. Cover as many people as the ACA
  2. Give those people at least the same protections afforded by the ACA
  3. Be as affordable for individuals as the ACA
  4. Be as fiscally responsible for the system as the ACA

Slavitt also suggested that entrepreneurs and industry executives will have an important voice in influencing the direction the new administration will go. “[They] will want to listen to healthcare CEOs and the entrepreneurial community in lieu of healthcare industry lobbyists,” he said.

Entrepreneurial impact on the future of healthcare

Another major theme of Slavitt’s conversation was the value entrepreneurs bring to the healthcare industry. “You gotta be nuts to be an entrepreneur,” Slavitt – a former healthcare entrepreneur himself – joked to the gathered innovators at MATTER. “Particularly in healthcare.”

One area where he sees tremendous opportunity is in designing solutions to close disparities in the healthcare coverage Americans receive. Slavitt said that the next revolution in American healthcare will come from closing these gaps in treatment.

steveslavitt2One way to close these gaps is to make sure people at risk for preventable health issues have access to transportation and flexible work schedules so they get the treatment they need when they need it. As is, too many folks miss a bus, don’t make it to their appointments, and end up hospitalized, risking their own health and putting a strain on the system.

So if Slavitt were an entrepreneur, he’d “be going into those communities and making technologies to solve” the “missed bus problem” and those like it.

Big data’s massive influence

Data’s growing influence was a throughline of his presentation. Slavitt stressed its importance for entrepreneurs both designing new solutions and working with Electronic Medical Records (EMRs).

When discussing EMRs, Slavitt quipped that he’d “never seen an industry become an industry before they create satisfied customers,” referring to health systems’ widespread adoption of EMRs and clinicians’ disappointment with the technology. Physicians are frustrated that “nobody has paid attention to their workflow,” throughout EMRs’ growth.

Here, too, entrepreneurs can influence the direction of the healthcare industry, said Slavitt. He wants CMS to help “level the playing field” and allow data to flow freely to wherever the patient is, rather than keeping it siloed within disparate systems, which would better allow innovators to improve the experience for both patients and physicians.

Slavitt also encouraged entrepreneurs to use healthcare data released by the Obama administration, including a newly-released store of data from CMS that tracks the list prices of 5,000 drugs over the last five years.

Overall, Slavitt was tentatively optimistic about the future of CMS in spite of the current political climate. And even if massive changes are coming to American healthcare, he is confident that the influence of entrepreneurial thinking and data solutions will continue to grow unimpeded. While only time can prove him right or wrong, his perspective was very much appreciated by the entrepreneurs and healthcare innovators gathered at MATTER.

Senator Kirk and Governor Romney Visit MATTER, Support Innovation in Healthcare

CHICAGO, Oct. 19, 2016 – U.S. Senator Mark Kirk and former governor and presidential candidate Mitt Romney today toured healthcare technology incubator MATTER to discuss the future of healthcare with entrepreneurs and innovators.

Located in Chicago’s Merchandise Mart, MATTER is a community of healthcare startups and industry leaders working together to fuel innovation in health IT, medical devices, diagnostics, and biopharmaceuticals.

Senator Kirk and Governor Romney met with several of the entrepreneurs working at MATTER to develop innovative healthcare solutions, including the founders of SurvivorPlan, an integrated care planning, care coordination, and patient engagement platform; HabitNu, a diabetes prevention and management tool; 300 Medical, a technology company that improves how patients receive care; and Resonance Medical, a software company that aims to upgrade existing cochlear implant processors.

“It was a pleasure to be back at MATTER,” said Senator Kirk, who visited the incubator for the first time in August of 2015. “The technology, devices, and products being developed by the entrepreneurs at MATTER will improve patients’ lives and positively impact the region’s economy,” Kirk continued.

“Today I had the opportunity to tour MATTER with U.S. Senator Mark Kirk,” added Governor Romney. “I enjoyed hearing from entrepreneurs and innovators on the cutting edge of healthcare technology who are working together to improve the healthcare industry, create jobs, and bolster the local economy,” Romney said.

“MATTER is honored to host Senator Kirk and Governor Romney for a discussion about how technology innovation is improving healthcare and changing lives,” said Steven Collens, MATTER CEO.

MATTER is a community of entrepreneurs, innovators, and industry leaders working together to harness technology to improve health and healthcare. MATTER connects and promotes collaboration between entrepreneurs, scientists, physicians, investors, and industry partners in order to bring next-generation products and services to market that improve quality of care and save lives. For more information, visit and follow @matterchicago.

Fresenius Kabi Joins Chicago Health Innovation Incubator MATTER as Newest Strategic Partner


(LAKE ZURICH & CHICAGO) – October 11, 2016 – Fresenius Kabi has joined Chicago’s healthcare innovation incubator, MATTER, as a new strategic “gold” partner, both organizations announced today.

MATTER is a community of healthcare innovators based in Chicago.  Fresenius Kabi is a global healthcare company that specializes in medicines and technologies for infusion, transfusion and clinical nutrition.  The company is based in Germany with its U.S. headquarters in Lake Zurich, Illinois and advanced manufacturing, R&D and logistics operations throughout the Chicagoland area.

MATTER and Fresenius Kabi will work together to accelerate the development of technologies that improve health and patient care, with a focus on products used in the treatment of people with critical and chronic conditions, which is where Fresenius Kabi has special expertise.

In the U.S. Fresenius Kabi products include specialty and generic injectable medicines, infusion pumps, clinical nutrition products and transfusion and cell-processing technologies used to collect, store, process and transfuse blood, blood components and specific therapeutic cell types and lines.

“This partnership is about physical and digital innovation, which as we know is transforming patient care, making high-quality care more effective, more affordable and more in reach for more people worldwide,” said Dean Gregory, president, medical devices, Fresenius Kabi USA.  “We look forward to engaging with the MATTER community and collaborating with its innovators, entrepreneurs and other partners as a means to fulfill our purpose, which is to put lifesaving medicines and technologies in the hands of people who care for patients.”

Through MATTER, innovators from across the healthcare industry connect and collaborate to accelerate the development and growth of solutions that address industry challenges and improve care.

“Fresenius Kabi is a leader in healthcare with a focus on therapeutics and devices, and we are thrilled to welcome their innovators and experts into the MATTER community as we collaborate to improve care,” said Steven Collens, chief executive officer, MATTER.

About Fresenius Kabi

Fresenius Kabi ( is a global healthcare company that specializes in medicines and technologies for infusion, transfusion, and clinical nutrition. The company’s products and services are used to help care for critically and chronically ill patients. The company’s U.S. headquarters is in Lake Zurich, IL. The company’s global headquarters is in Bad Homburg, Germany. For more information about Fresenius Kabi worldwide, please visit


MATTER is a community of entrepreneurs, innovators and industry leaders working together to harness technology to improve health and healthcare. MATTER connects and promotes collaboration between entrepreneurs, scientists, physicians, investors and industry partners in order to bring next-generation products and services to market that improve quality of care and save lives. For more information, visit and follow @matterchicago.

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Fresenius Kabi Media Contact
Matt Kuhn
Fresenius Kabi
(847) 550-5751

MATTER Media Contact
Melissa Lederer
(312) 543-9537

Salon Recap: Shift to Fee-for-Value and Impact on Medical Devices

In April, MATTER assembled a diverse group of stakeholders for a salon on how healthcare payment and delivery reforms are impacting the way health systems evaluate medical devices. The group included executives from device manufacturers including Abbott VenturesHill-Rom, Briteseed, and Diagnostic Photonics; providers, payers, technology and telehealth experts, and contract and procurement specialists. We  had a spirited conversation about how health systems and manufacturers are interacting in this brave, new, fee-for-value world. Following are a few high-level takeaways from the morning.


New Customers are Influencing Purchasing Decisions

Providers continue to consolidate both horizontally and vertically as health systems combine and purchase physician groups. This consolidation allows providers to enter into at-risk financial arrangements to manage the costs of caring for a population of patients. However, under these new care models, an individual physician’s influence over the medical device purchasing process is decreasing, causing health systems to involve multiple stakeholders – often called “value committees” – in the evaluation and purchase of new technologies. These new customers have unique incentives and priorities that medical device manufacturers need to be aware of.

Long-term Value is Increasingly Important to Payers and Providers

Both payers and providers want to understand the long-term value of a medical device, including its impact on cost, quality, and outcomes. Providers in at-risk financial arrangements are particularly focused on its impact on downstream medical costs (e.g., post-acute care use and setting). Some of the earliest examples of this trend can be found in orthopedics, where commercial and government programs such as Medicare’s Bundled Payment for Care Improvement initiative consolidate payments for acute and post-acute care services for joint replacement procedures.

Data and Analytics are Becoming Critical to Proving Value

Many manufacturers are already moving in the direction of collecting and analyzing medical device data and providing more connected and interoperable devices. To be more competitive in the future, however, manufacturers will need to understand what specific kinds of evidence payers and providers need to prove a device’s value under these new payment models – such as case studies and real-world examples – instead of just randomized clinical trials.

For those interested in more details about what was discussed at the salon, meeting notes prepared by Navigant Consulting can be found here. And if you a hospital administrator or medical device innovator interested in being part of this important dialogue in the future, please contact Shareef Ghanem (, senior program manager, for information on upcoming events.

Is the Startup Funding Bubble Deflating? Not for Healthtech Innovators

Posted May 2 by Ornella Hernandez
MATTER Journalism Resident
Medill School of Journalism, Class of 2016

The Wall Street Journal published an article recently that put a point on what many investors have been saying for some time: we are seeing a contraction in the amount of venture capital funding available to entrepreneurs. The article specifically noted that Q1 represented the largest quarterly decline in VC funding since the dot-com bust – a 25% fall in cash deployment across all venture markets from Q4 2015 to Q1 2016 and a four-year low in the number of transactions completed. One prominent VC, Bill Gurley, also recently posted on the dangers of the “unicorn financing market” and the potential challenges facing the industry due to inflated valuations of many high-flying startup companies.

MATTER member Danny Bernstein of Metame, a platform for tracking and analyzing food consumption in patients with IBS, demos his product to investors at MATTER.
MATTER member Danny Bernstein of Metame, a platform for tracking and analyzing food consumption in patients with IBS, demos his product to investors at MATTER.

For the 125 startups at MATTER, many of whom are currently – or will be shortly – raising capital, this all could be very bad news … so we asked a few VCs who look at lots of healthtech deals for their perspective. “There’s no doubt we’re seeing some market-wide concerns, but it’s dangerous to read too much into one data point,” said Pritzker Group Venture Capital Partner Adam Koopersmith. “It’s not necessarily indicative of a massive swing of investment activity.” Indeed, Mattermark’s Q1 financing analysis concluded that the percentage changes in the number of deals and cash deployment from Q4 to Q1 were statistically insignificant. And Startup Health’s report on digital health investing found that Q1 was, in fact, the strongest funding quarter on record.

“The capital pull back is real, but no need to panic. Key is managing your cash burn to value creation milestones,” says Noah Lewis, managing director at GE Ventures. “Downturns are a routine part of any financial market’s fluctuations, venture capital included. We remain bullish on software- and tech-enabled services that enable healthcare stakeholders to transform their fee-for-service business models to value based care. This mega trend and related opportunities will continue unabated.”

“There is no doubt healthcare investing has some serious momentum that will only continue with the announcement of funds from strategics such as Illumina and OSF HealthCare,” says Koopersmith.

Dan Watkins, co-founder of Mercury Fund, meets with healthtech entrepreneurs at MATTER’s 2016 Midwestern University Healthtech Showcase

Indeed, at MATTER we see continued strong interest from investors in meeting new healthcare technology companies, and a continually expanding and vibrant community. With 125 healthcare startups and deep connections to Midwest universities, MATTER has become a magnet for investors looking for healthcare technology companies to invest in. “Because of the market shift from fee-for-service to value-based care, healthcare feels greater pressure than other industries to develop and adopt new innovations and technology solutions,” says MATTER CEO Steven Collens. “This level of demand should help cushion healthcare entrepreneurs against potential softening of the broader venture capital markets.”

“While it’s a good idea in markets like this to conserve cash and look to extend runway, the fundamentals behind the growth in healthcare startup activity point to continued strong demand for new technologies and services, and therefore to continued strong opportunities for investors,” added Collens.

Over 40 Ventures from 10 Midwest Universities to Participate in MATTER’s Second Annual Midwest University Healthtech Showcase

CHICAGOApril 8, 2016 – MATTER, the healthcare community hub and entrepreneurial incubator, announced today that the second annual Midwest University HealthTech Showcase will take place on Monday, April 11, 2016. The showcase will bring together early stage healthcare innovators from 10 midwestern universities to present their technologies to hundreds of healthcare investors and industry leaders at MATTER. The Midwest University Showcase is the kick-off event to the two-day MedCity INVEST Conference on April 12-13 that attracts both regional and national venture capitalists and angel investors.

“We’re looking forward to welcoming some of the brightest healthcare innovators from across the Midwest,” said Steven Collens, MATTER CEO. “Investors and industry leaders will see promising new technologies that represent real business opportunities and that will have a huge impact on health and healthcare.”

The event will showcase over 40 biopharmaceutical, medical device, and health IT innovations that are available for licensing or in the commercialization process. Participating technologies include BOLD Diagnostics, which developed a device to remotely capture blood pressure in patients with hypertension; NovaScan that commercializes a low-cost instantaneous cancer detection system; and Output Medical that automates urine output measurements to improve acute kidney injury diagnosis.

“We are extremely excited about attending the Midwest University Showcase because we see this as an ideal opportunity to validate our venture, and build the necessary connections to generate traction and move the company forward,” said Output Medical founder Dr. Jay Joshi.

Participating universities include Indiana, Illinois, Northwestern, Ohio State, Notre Dame, University of Chicago, University of Kansas, Medical College of Wisconsin, Rush University, and the Wisconsin Alumni Research Foundation. BioSTL will also participate. Several MATTER member companies, whose technologies were initiated out of participating universities, will be involved in the program.

In addition, MATTER will bring together healthcare technology investors from across the country, as well as industry professionals responsible for in-licensing and investment opportunities from companies such as Horizon Pharma, Abbott, AbbVie, Astellas, Baxalta, and Takeda.

“It’s always compelling to learn about new technologies that are being developed right in our backyard that we don’t have visibility into through our traditional channels,” said Nancy Sullivan, CEO of IllinoisVENTURES. “MATTER’s ability to convene this many healthcare innovators, industry insiders, and investors makes for a stimulating evening of discovery, networking, and opportunity,” Sullivan added.

The Midwest University Showcase is a private, invite-only event underwritten by Horizon Pharma. To see the full list of participating technologies, visit


MATTER is a community of entrepreneurs, innovators and industry leaders working together to harness technology to improve health and healthcare. MATTER connects and promotes collaboration between entrepreneurs, scientists, physicians, investors and industry partners in order to bring next-generation products and services to market that improve quality of care and save lives. For more information, visit and follow @matterchicago.

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