Why Create the Cambia Grove?
The idea behind the Cambia Grove comes from this notion that we believe that in the Pacific Northwest and the Puget Sound region, we could be well-positioned to be a national market leader for healthcare, but today, factually, we are not.
Seattle is known for many things. We’re known for coffee, aerospace, online retail, outdoor apparel and a lot of very great industry transformers.We have a lot of great Fortune 500 companies here, but we don’t have a strong reputation in the healthcare space.
So the Cambia Grove is trying to boost this region’s healthcare sector by helping to create a collaborative home for the healthcare institutions that exist here, meaning health plans, providers and large employers. To start sitting across the table with young companies and entrepreneurs.
We actually launched this thing from complete brainstorm idea to today in one year. Completely built up the space, the strategy and everything. We moved really quickly on this one. I have to give a lot of credit, pretty much all credit to Rob Coppedge, our SVP of corporate development, for the idea, and the quick filibustering amongst our organization.
Basically, he’s from Nashville, and he knows the healthcare cluster there very well. It was very easy for us to study, apply what they have done in the last 20 years, and think about how things would be different here.He was able to run with the strategy quickly and get approval. I think the key for us was a dynamic leader who had established trust within the organization. We were able to act rapidly.
Strategic Investments in Healthcare Startups
Cambia Health Solutions is an active strategic investor in the healthcare space.
We started along that strategy about four years ago, and we have 21 companies in our diversified healthcare solutions portfolio now. [But we recognize] that we are not investing in our own backyard. We are investing in places like Silicon Valley, places like Boston, places like Chicago, but of those 21 companies, only one of them is in Washington state. And so, we are making a quick move to do something about that.
We are averaging about six new investments a year, and they’re all focused in the healthcare space, and they’re all focused on our mission to be a catalyst to transform healthcare.
How We Find Promising Investments
Right now, we are looking in the aging space. As our Boomers age into Medicare eligibility, what types of services can wrap around families and care-givers looking to care for aging loved ones?
A second area of focus is around consumerism and transparency. What are some sorts of tools that people need to feel empowered to make decisions about their healthcare around value, quality and cost? And finally, the third area is in the dynamic between payers and providers. What are the types of systems, digital solutions, and other tools that would truly empower providers to take care of people in the way that providers want to work, and in the way that people and family members want to be taken care of?
We look at over 500 healthcare businesses a year, and our track record so far has been to invest in around six a year, but our portfolio funding is set up to [do] a very wide range of transactions in the low hundred thousands to mergers and acquisitions of quite some size.
Unlike venture capital, we’re focused on our mission. And so we’ve got more patient capital and we’re not looking to make an investment and flip, within a couple years time, at a profit. We want to actually stand by these companies to help them achieve their mission.
We report up to Rob Coppedge, who’s the SVP of corporate development, and he reports directly in to our CEO, Mark Ganz. Those two leaders are responsible, both for the thought leadership, and the innovative thinking around installing something like the Cambia Grove.
We really could have put something like this closer to the companies we have invested in. For example, strategically, we could have put this in Silicon Valley. But we chose Seattle, because we think in our own back yard, we can evolve our current corporate development strategies into something that serves our community in the same mission, but extends our reach dramatically.
Location and Design
The location at 9th and Olive in downtown Seattle is really central to the heart of Seattle, and also in the emerging [neighborhood we call] Amazonia. As Amazon is growing dramatically downtown. Our Regence Health Plan has four floors in the building that the Cambia Grove is in, and the rest of the building is Amazon and some corporate lawyers.
It’s an easy place to get to, public transportation, parking is good, et cetera.
We worked with our architect, and we were very intentional around creating a next-generation work space. We’ve learned a lot from scrappy start-ups, and what they do, sitting in a big room, coming up with a genius idea, brainstorming, and so, we created a work environment that’s got a very open floor plan so that we can have more informal interactions between stakeholders.
It’s a very flexible space, it can be configured for meet-ups, or it can be configured for events with over 100 people seated. And so, we’re hoping to foster a very innovative and interactive group dynamic. We want to hopefully, under this umbrella space and common table we are creating, allow traditional competitors to … sit down at the table with us.
Monday through Friday, the healthcare community is invited to freely come in and sit down and get to work. There’s a lot of sitting and standing tables. There’s a kitchenette with a standing bar. The place is wired for WiFi throughout, so that it’s very informal and casual. There’s also touchdown spaces in the back that would allow for an entrepreneurial team to set up and get to work.
There are likely to be startups that can headquarter with us for a time. They don’t have to be, and they’re not likely to be, [startups that we have invested in.] They’re startups that are out in the community, that need a home. Maybe they’re in a garage right now. We are not designed to be a co-working space, though, you can’t rent a desk here or rent an office.
We have a no-fee model. We don’t charge fees, and we will not take equity in any of the companies who are working here. Both of those types of strategies really would work against our desire to boost the region, and to do that in a sincere and honest way.
What We Studied as Examples
We looked at regions, and we looked at incubator and accelerator models. The regions that we studied more closely include Silicon Valley, Boston, and Nashville. Just really broadly, Silicon Valley is startup everything, and there’s a portion of that that has to do with healthcare. Boston is largely focused on some of the research and development, harder sciences, although tech and digital solutions are emerging. Nashville is actually the number one healthcare cluster in the country, with most of the for-profit hospital companies being headquartered there.
We looked at what types of organizations were in those existing healthcare clusters, and we studied them closely to inform our strategy.
The other thing we looked at is this surge of accelerator and incubator programs, and we know those well. We’ve invested in one company that’s a Rock Health graduate, for example. That’s Wildflower Health.
But we are not going to pursue an incubator or an accelerator strategy, because again, our mission is to boost the Puget Sound. We don’t need to own or run an accelerator to do that. We also don’t favor the accelerator programs, many of which trade relationships and desk space for equity in a company. We feel that that’s taking too much from entrepreneurs.
Measuring the Impact of the Grove
In the short term, we need to get our doors open and network like crazy so that the community here becomes familiar and understands what we’re trying to do.
That entails a lot of programming and pursuing anchor partners, which are our institutional collaborators who have committed to work with early-stage companies at the Cambia Grove and have committed to pilots with us. We’ve already got three of those who have lined up to do one pilot per year with us.
In the fall, we hope to publish an economic study. We’re working with the governor’s office, and tech and biomedical associations in the state, to jointly publish our inaugural baseline study of the region here.
We don’t know quite yet exactly how we ought to go about improving, catalyzing this region until we have a really good baseline and comparator against other regions on what we ought to do. In the long-term, we look at places like Nashville, which has a Nashville healthcare council that can measure economic development measures around the dollars invested in the economy.
On Competitive Sensitivity
We have talked to, I believe, every health plan in the region that’s headquartered here, and we’re in on-going discussions with many of them. We really see this as more of an opt-out than an opt-in, because we’re looking to boost the region.
We have plenty of issues in healthcare that we can meet around the table on without having to reveal particular strategies or particular weaknesses among us.
That being said, we have confidence that we’ve hit on something and have some initial market traction, but it’s very hard, because we’ve got a single sponsor in Cambia, which is very well known with our Regence brand. It’s on me and my team at the Cambia Grove to prove out that our intentions and our work are true to the community, and not, in the most sinister way, to create some kind of flow-through for us.
Mixing C-Level Execs and Entrepreneurs
The idea that you get these large institutions to come in and say, “Yes, I want to buy local. Yes, I want to help build a healthcare economy here. And yes, I’m all about being the first place in the country to achieve the triple-aim first.” We’re bringing these institutions to the table, and that’s what missing from these Third Thursday keg [networking] events. You’ve got to get those C-level people to come and meet with these young companies, and we’re going to bring that.”