American Health Care Cities is a new recurring feature at Health Evolution examining the health care market in different cities and regions across the country. How does the health care industry vary across this country? How does it look the same? What are the opportunities and challenges in each city? We’ll be talking with key leaders in some of the most active health care cities in America to better understand if health care, as they say, is truly local.
Other cities covered:
City: Houston, Texas
Metro area population: 7.066 million
Health care economic benefit: 12 percent of region’s employment, $27.7 billion of Houston’s regional GDP in 2019. (Source: Center for Houston’s Future), 366,600 workers (Source: Greater Houston Partnership)
Interviewee: Taha Jangda, General Partner, HealthX Ventures
When people think of Houston’s economy, the first thing that may come to mind is the oil and gas industry. After all, it’s called the Energy Capitol of the World for a reason. Beyond oil and gas, maybe NASA and the aerospace industry come to mind. Or perhaps the rodeo, which brings millions of people to the city every year for an annual event held at the Houston Texans’ home stadium.
Health care has never really been at the top of that list but that’s changing, says Taha Jangda, General Partner, HealthX Ventures. He is a lifelong resident of the Space City and has seen the health care industry in Houston transform over the course of his career. At the heart of that growth is Texas Medical Center and its CEO, Bill McKeon, Tangda says.
“Texas Medical Center is the largest medical city in the world, consisting of 21 hospitals, four universities, three medical schools, six nursing programs, two pharmacy schools, and a dental school,” says Jangda. “It has well over 10 million patient visits and 200,000 surgeries a year.”
Beyond TMC, there’s MD Anderson, the largest cancer center in the world; the Baylor College of Medicine, one of the top research medical schools in the country; Texas Children’s Hospital, the largest children’s hospital in the nation; one of the largest VA facilities in the country; a top psychiatric facility; and the first-ever accredited ACO in the country. That’s just on the provider side, there’s a growing life sciences field, increasing amounts of innovation through the TMC Innovation Institute and more.
Health Evolution spoke to Jangda about how Houston has transformed as a health care hub, the challenges health care organizations face in the city and what health care leaders should know about this region.
How has Houston evolved as a market?
Houston has transformed – years ago one would have never thought Houston was a bustling place for health care innovation, but it has been the perfect breeding ground for novel therapeutics and technologies. When you think about Houston, in the past it was always known as an oil and gas town with a massive medical center complex.
But just like when you evaluate companies to invest in, the first thing you always look at is the CEO and the team, and I can say unequivocally that the catalyst of the transformation of Houston from a storied medical center to an innovation hub happened when Bill McKeon joined Texas Medical Center eight years ago. He recognized the value and power here of a collaboration in Houston. That helped light the match. Until he came, a lot of the institutions didn’t speak to each other. It was very siloed even though they are across the street from each other.
Now everyone has come together. We realize we can compete well together for a higher standard of care and research dollars. There have been leadership changes that have helped bring people together. Even looking at the response to COVID, Bill and his team were able to gather the CEOs of each institution and convened every morning, seven days a week, for almost an entire year to align on the overall response, from evaluating data, supporting front line staff, visitor policies, and a vaccination strategy.
Taha Jangda, HealthX Ventures
What are the biggest challenges health care orgs in Houston facing?
The city has gone through a lot over the past few years from Hurricane Harvey to the pandemic. Health care is at the core of them both. Houston was able to lean on the infrastructure and response of Harvey and translated that preparedness into action when the pandemic hit. As I said about TMC and the institutions coming together during COVID, this really enabled Houston aggregate data in response to the pandemic. Since most cities don’t have an entity like ours, we were able to uniquely unite, compile, and communicate about COVID and have a clear and consistent response across the medical center. TMC created data dashboards for infection rates, patients in ICU/med surg, vaccines, ventilators across all institutions and was made accessible to the public and public agencies on a daily basis.
In terms of other challenges Houston health care organizations are facing, Houston is no different than any other large city and is still navigating the challenges of the shift from the fee for service to the value-based care world and the continued effort to improve the access, quality, cost, and experience of care.
We’re also in the middle of a big shift from figuring out how do we shift our narrative from the “gold standard of care delivery” to taking our highly, validated IP and commercializing those into businesses. This transformation is coalescing around the creation of TMC Innovation Institute which houses TMCx, Johnson & Johnson Innovation Center for Device Innovation and JLABS, and the AT&T Connected Health Foundry. However, the ultimate culmination and the future commitment of Houston becoming the “Third Coast” is the establishment of TMC3, a 35-acre research and innovation campus, which when it is complete will have a $5.4 billion annual impact and the creation of well over 26,000 jobs.
It’s changed but there’s a lot of movement to come. When people think of venture in Texas, they think of Austin. Houston has quickly found a way to recruit startups across the globe and has achieved very impressive numbers of partnerships and exits, but there is still a need to bring venture capital to Houston. Thankfully, the TMC Venture Fund, HX Venture Fund, Integr8d Capital, Mercury Fund, Vesalius Ventures, and even the Mayor of Houston are all taking steps here.
What are some things about Houston health care leaders might not know?
There is more support and infrastructure for the development of startups than ever before and that they can tap into this relatively new breed of talent through commercialization opportunities of their research.
For people outside of Houston, the volume and concentration of a diverse patient pool within a multi-institutional setting continues to become an ideal place for research and you can come to Houston for so many types of engagements- research, co-development opportunities, pilots, preclinical studies, clinical studies, full system implementation across multiple sites and specialties.
If you are a digital health CEO, Houston has the largest density and diverse set of Epic installations and one of Cerner’s top five sites (Memorial Hermann) which will also best prepare you to scale your company. You have one of the greatest accelerators that is partnership-centric and doesn’t take any equity and reserves the ability to serve as an investment vehicle through its venture fund for the best companies. Houston has also found a great niche in not only serving as a launching pad in the U.S. market for companies abroad but also in growing medical device companies and cancer therapeutics.