How Health Care Veterans Foster (and Learn From) Startups

Entrepreneurs poised to disrupt health care often aren't familiar with the industry, so they need some guidance to create a viable business — and the industry benefits from the exchange of ideas.

Dr. Elif Oker (right) says mentoring entrepreneurs inspires fresh thinking in her role leading digital user experience for Blue Cross and Blue Shield Plans in Illinois, Montana, New Mexico, Oklahoma and Texas.

New health care products and companies are born from an idea — one that might help people get and stay healthy or make the system more effective and efficient for everyone involved.

But the people who hatch those ideas aren’t always familiar with the highly fragmented and regulated health care industry, so they need some guidance to create a viable business.

That’s one of the reasons Dr. John Colson sought help for the new company ClostraBio through the Chicago Innovation Mentors (CIM) program at MATTER, a health care technology incubator in Chicago.

“The primary reason we wanted to do CIM was to get mentorship from people experienced in life sciences and health care … so we could build a business,” says Colson, the director of operations for the startup ClostraBio. The mentors on hand through the program have extensive expertise and experience in various sectors of the industry, including drug research, care delivery, technology and insurance.

A health care startup is born

ClostraBio was born out of Dr. Cathryn Nagler’s lab at the University of Chicago. Nagler, a professor of food allergy and pathology, medicine and pediatrics, had made a discovery in her lab about how bacteria in the gut can regulate allergic reactions to food. The insight, the company says, could lead to new medicine that may prevent life-threatening allergic reactions to food.

Nagler launched ClostraBio as a vehicle to create that drug. Her co-founder is Dr. Jeffrey Hubbell, a professor at the Institute of Molecular Engineering at the University of Chicago and expert on immunomodulation and drug delivery. They later brought in Colson, who has a PhD in chemistry and was previously a senior associate for the Innovation Fund, which invests in startups from the University of Chicago, Argonne National Laboratory, Fermilab and the Marine Biological Laboratory.

Even before the company was incorporated, Colson and Nagler started trekking to MATTER once a month to meet one-on-one with mentors to learn more about the health care industry and what it takes to survive and thrive as a startup.

That’s where Colson met Dr. Elif Oker, executive director of digital user experience for the Blue Cross and Blue Shield Plans in Illinois, Montana, New Mexico, Oklahoma and Texas. Joel Farran, senior vice president and chief brand officer for the insurer, serves on MATTER’s board of directors.

Oker, one of five mentors Colson worked with through CIM, has a unique view of health care. She practiced as an emergency medicine physician for about a decade before joining the insurer as a medical director.

Their way of thinking has changed my way of thinking.

Dr. Oker has been volunteering as a mentor for years, guiding young companies through the complexities of health care. She sees it as an opportunity to “help other people figure out how to help patients.”

Important lessons

Entrepreneurs join the CIM program for a variety of reasons, so the questions Oker encounters run the gamut. One day she’s walking someone through the ins and outs of an illness like diabetes. The next she’s explaining the basics of how health insurance and the health care system work.

“They’re trying to better understand the health care system, medicine and disease,” she says.

Beyond general knowledge, mentors also bring business perspective to entrepreneurs like Colson.

“One of the key learnings was to learn to be focused on one thing and do it really well,” he says — and that advice led ClostraBio to home in on peanut allergies.

Colson says Oker provided a valuable window into the health insurance industry, especially for a new company wanting to make medicine.

“When you think about creating a new drug, it’s one thing to have a use case that appeals to patients or even physicians [or] design a clinical trial to get approval for a specific indication,” he says. “It’s another thing entirely to think about how it fits into the mindset of a payer.”

For instance, Oker had specific insight as to the need to showcase, in a clinical trial, quality and cost impacts that a new drug may bring, beyond if it stops an allergic reaction — something health insurers would look for to ensure the product has value for their members beyond alternatives with a proven track record.

Colson encourages any budding health care entrepreneur to seek the advice of mentors early in their journey. “It can help provide focus, drive you forward and give you impetus early on before you get off track.”

Oker says the dialogue with entrepreneurs is also valuable in her own work.  “Honestly, I think they’ve taught me as much or more than I’ve taught them,” she says. “Their way of thinking has changed my way of thinking.”

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