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September 22, 2023

Challenges persist as Nashville seeks to be health tech leader

Challenges persist as Nashville seeks to be health tech leader

Holly Fletcher | The Tennessean

Nashville is poised to emerge as a national leader in the area of health care information technology but needs to harness its existing expertise to build its reputation as a technology epicenter.

A new report by Brookings Metropolitan Policy Program outlines the city’s strengths and weaknesses in establishing itself as an epicenter of health care information technology, or HIT. The city’s pool of software engineers is thin compared to other cities its size and that it competes with in health care and the link between universities and the private sector need to be bolstered, according to the report.

“We really think Nashville needs to be put on the map for health IT,” said Scott Andes, lead author of Brookings’ “From health care capital to innovation hub: Positioning Nashville as a leader in health IT.”

Health IT is an increasingly important piece of the health care industry that, if structured and implemented efficiently, could help the industry manage the health and wellness of a diverse group of people more effectively on less money.

It’s an area where Nashville is attracting attention from both companies and investors. Brookings’ findings support a report earlier this month from the Nashville Technology Council and Nashville Health Care Council Investments that found a substantial uptick in funding for HIT companies. Venture capital investments in HIT surpassed those in the services subsector in 2012 — hitting a peak of $62.5 million in 2014, up from $2 million in 2009.

The emergence of HIT as a heavy presence, both in the industry and Nashville, reflects “a generational shift in technology and business models,” said Mark Muro, a Brookings researcher. HIT is no longer a side development of health care industry but a central piece of the industry that will help continue to develop in the coming years, Muro said.

But Nashville, its industry and government cheerleaders and leaders from the tech, education and health care industries need to seize on existing strengths to forge stronger, more formal avenues for growth — before the moment passes, the Brookings researchers said.

It won’t be easy to emerge as a leader because as Nashville grows, so too will its chief competitors — and Nashville area already has fewer IT employees than expected given the number of companies in the area, Andes said. Atlanta, Boston and Dallas each have a range of expertise, much like Nashville, where as San Jose and Austin primarily boast IT and software development expertise, according to the report.

“We do think it is an urgent moment where there is tremendous upside, but Nashville is not alone. Nashville has competitors,” Muro said. “I think you have an enviable starting point.

The researchers came to realize a city would need the right ecosystem, which includes the health care and back office expertise, to succeed as an HIT leader, Muro said.

“You probably can’t do this solely as a pure software play,” Muro said. “This is a hugely complicated industry, so you’re going to need industry expertise bust you’ll also need topflight digital skills.”

Nashville would benefit from a more formal venue for getting younger companies to engage with and talk about solutions with legacy companies such as HCA, Change Healthcare, Community Health Systems and LifePoint Health.

Andrew Freedman, a health care analyst with Hedgeye Risk Management, said HIT companies should try to listen to what chief information officers want and the problems they are trying to solve. It’s important for companies trying to solve problems with tech that many hospitals are “struggling to break even” so are going to be judicious with how they spend money, Freedman said.

“Advancing the field of (HIT) is critically important to HCA as we seek ways to provide even better care for our patients. From big data analytics to creating more efficient work processes, HIT is the backbone that supports many of our advanced clinical care initiatives,” said Marty Paslick, senior vice president and chief information officer at HCA. “We look forward to continuing our work with the Nashville Technology Council, Center for Medical Interoperability and others to support the growth and development of HIT in Nashville.”

Andes is “cautiously optimistic” that Nashville’s existing health care companies can foster relationships with the health care tech sector that are long-term and meaningful.

The speed at which health care is changing means initiatives to propel the HIT industry forward have to happen sooner rather than later. Hayley Hovious, president of the Nashville Health Care Council, wants to establish a working group with representatives from a variety of fields to hold the industry accountable.

“I see this now as the time to seize the momentum and to really push it,” Hovious said. “Health care is moving quickly but … not that quickly as regulations and financing doesn’t change that fast. We have to be diligent in these (next) few years working on it.” 

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