MASSACHUSETTS

A Leading Global
Digital Health Ecosystem
The Digital Health Opportunity

The digital health market opportunity in the United States is

large and growing.
U.S. Market Opportunity
Over Next Decade:

$32 Billion*
*Goldman, Sachs & Co. report, The Internet of Things Vol. 5,
“The Digital Revolution Comes to U.S. Healthcare,” June
29,2015. Does not include consumer wearables, IT solutions or
data>analytics platforms, all of which are individually multi-billion
dollar markets.

The pace of digital health funding in the first nine months of 2016 exceeded the record-
breaking years of 2014 and 2015, with funding of more than $6.5 Billion and a growing
average deal size. Source: Startup Health Digital Health Funding Rankings 2016 Q3 Report

2
Why Massachusetts

Digital Health leverages

industries and
capabilities in which
Massachusetts excels
• Leaders in US health reform
• Top healthcare delivery hub
• Dominant Talent Pool and
University Networks
• Strong startup climate
• #1 global life sciences and
medical device ecosystem
• Competitive investment/VC
landscape
• Growing tech clusters in software,
big data, robotics, cybersecurity,
and other areas

3
Massachusetts’ Strengths

TALENT & Globally-

MA Healthcare Jobs Highest Percentage
(46.1%) of Adults in US
Most STEM
Grew 19% between Degrees per
WORKFORCE Recognized Higher 2009-2015
with a Bachelor’s Degree
or Higher million residents
Education Network (source: MassTLC) (source: Innovation Index) (source: Innovation Index)

#1 in State #1 ‘Most Most companies in

INNOVATION #1 Startup Hub the Healthcare
Science and Innovative
ECOSYSTEM Technology Index in the US Informatics 100
State’ (source: 1776) (source: Healthcare
(source: Milken) (source: Bloomberg) Informatics)

World-Leading Innovative Payers with

Over 350 existing Leaders in State &
Healthcare Institutions Top Healthcare
Digital Health firms National Healthcare
in Quality & Innovation Outcomes
(source: MassTech) Reform
(source: US News) (source: NCQA)

INVESTMENT
#1 State for NIH
#2 US Digital Engaged, Top-
Research Funding per $1 Billion state
Health Destination $1 Million GDP Quality Civic &
investment into Life
Business
(source: StartupHealth) (source: Innovation Sciences innovation
Associations
COLLABORATION & Index)

CROSS-SECTOR
500+ Big Data / Dominant Life Competitive and Strong
STRENGTHS Data Analytics Sciences & Medical Growing Tech Cybersecurity
Companies Device Industry Sector Industry Cluster
(source: MassTech) (source: MLSC) (source: MassTLC) Assets

4
Digital Health Cluster
Engagement in industry clusters raises a company’s productivity*.
Massachusetts is home to a strong and growing digital health cluster,
composed of:

Companies: Healthcare Customers:

• Nearly 300 digital health • 79 academic, specialty, and
companies community hospitals
• 10 companies in the • 98 community health centers
Healthcare Informatics 100 • 46,000+ healthcare providers
• 14 private healthcare payers
• 550 biopharmaceutical companies
Investment: • 400 medical device companies
• 30+ venture capital firms
investing in digital health Research and Talent:
• Over 100 colleges and universities

Innovation:
• 10+ digital health-specific Civic Leaders
innovation programs • Public, private, and community
leadership
*Source: http://www.isc.hbs.edu/com petitiv eness-economic-dev elopm ent/frameworks-and-key-concepts/Pages/cl usters.aspx
5
Why Massachusetts

Massachusetts is becoming the

leading global ecosystem for digital
health innovation.

We excel in four key drivers:

Talent, Innovation,
Investment, and Collaboration.
6
 TALENT:
-A smart and ready workforce
-Top colleges and universities

7
#1 for Talent
There are 114 colleges and universities in Massachusetts enrolling over
400,000 students seeking bachelor's or associate degrees (Based on National
Center for Education Statistics, 2014).

• Massachusetts is #1 in awarding
new college degrees per capita,
with 118,420 higher education
graduates in 2015, inclusive of
community college, 4-year, and
advanced degrees. This includes
more than 67,000 degree
holders inside Route 128 alone. Massachusetts is home to the most STEM Degrees in
the U.S. per million residents.
• 50 of these colleges and (source: Massachusetts Innovation Index)

universities are in the greater

Boston metropolitan area, which is Massachusetts has the Highest Percentage (46.6%) of
Adults in US with a Bachelor’s Degree or Higher.
home to more than 250,000 (source: Massachusetts Innovation Index)
students.
8
College & University Grads
Massachusetts provides a deep pool of talent, producing nearly 120,000 graduates
annually across all institutions in the state, with over 50% of those undergraduates.

Degree Type
TOTAL GRADS – 2015 TOTAL
Doctorate Masters Bachelors Associates

All of Massachusetts 118,420 8,409 35,958 59,668 14,385

Greater Boston
67,493 6,534 26,317 30, 602 4,040
(Inside Route 128)

Within 1 Hour of Boston 93,695 7,639 31,377 44,619 10,060

(Inside Route 495 & Worcester)

UMass Amherst Only 7,452 297 1,418 5,683 54

(Less than 2 hours from Boston)

9
STEM Talent & Density
Degrees Granted in STEM Fields
per 1 Million Residents

Massachusetts is
Massachusetts, 2013-2014

home to the most

2500

STEM Degrees per 2000

million residents. 1500

1000

(source: Massachusetts Innovation Index)

500

Physical Sciences Mathetmatics & Statistics

Engineering Computer & Information Sciences
Biological & Biomedical Sciences

Source: The Index of the Massachusetts Innovation Economy 2015/16

10
STEM Graduates
STEM (Science, Technology, Engineering & Math)
• MA is #1 nationally in STEM graduate and professional degrees granted per capita
• Two Massachusetts universities rank in the top five best graduate schools for math:
Massachusetts Institute of Technology (#1) and Harvard University (#3)
• Over 2,600 students graduated from cybersecurity-related programs in 2015.

Science
• MA is #4 nationally in number of Science graduate and professional degrees granted
• Three Massachusetts universities rank in the top 25 of the best schools for computer
science: Massachusetts Institute of Technology (#1) , Harvard University (#18) and
University of Massachusetts Amherst #25).

Engineering
• MA is #5 nationally in number of Engineering graduate and professional degrees
granted
• Four Massachusetts universities rank in the top 50 engineering schools : Massachusetts
Institute of Technology (#1) , Harvard University (#20), Boston University (#37) and
Northeastern (#43).

11
STEM Graduates
• In 2015, 21,349 total STEM students graduated from Massachusetts universities, including over
17,000 within an hour’s drive of Boston.
• While several UMass system schools are located outside of Greater Boston, roughly three-
quarters of recent UMass grads stay to live and work in Mass., and 60% remain long-term.

STEM GRADS – 2015 TOTAL Doctorate Masters Bachelors Associates

All of Massachusetts 21,349 1,604 5,926 12,294 1,525

Greater Boston
12,071 1,308 4,394 5,918 451
(Inside Route 128)
Within 1 Hour of Boston
17,383 1,470 5,439 9,328 1,146
(Inside Route 495 & Worcester)

2015 STEM Grads - Select Schools

2,260 1,421 1,778
2,109
1,445
1,347
2,179

12 Source: National Center for Education Statistics Integrated Postsecondary Data System (NCES IPEDS).
Healthcare Workforce

Employment by Industry Sector

Brookings analysis shows that in Massachusetts 2009-2014

2014, Metro Boston was home to 2014 % Change in

Employment Employment
Sector Total 2009-2014
over 330,000 HIT jobs, which Healthcare Delivery 363,699 10.0%

measured as 13.6% of total jobs. Financial Services 155,755 -4.4%

(source: Brookings) Software &
Communication
Services 149,183 14.1%

Business Services 147,161 -0.6%

Postsecondary

Healthcare Delivery is a Education

Scientific, Technical, &

141,695 3.0%

dominant and growing Management Services

Biopharma& Medical
81,313 19.2%

sector of the Devices

Diversified Industrial
66,724 2.5%

MFG 38,482 -6.4%

Massachusetts economy, Defense Manufacturing
& Instrumentation 37,319 -2.4%
and had a 10% increase in Computer &
Communications

employment from 2009- Hardware 35,884 -10.4%

2014.
Advanced Materials 29,359 -6.8%

(source: Massachusetts Innovation Index)

13
INNOVATION:
-A World-Leading Startup Ecosystem
-Roughly 300 Digital Health Firms
-Strong & Established Anchor Companies
-Many Innovation Programs and Accelerators
-Innovation-Friendly Healthcare Community

14
#1 Innovation State
Bloomberg’s 2015 & 2016 U.S.
Innovation Index ranks
Massachusetts as the “Most
Innovative State.”
The Index factors R&D
intensity, productivity,
high-tech density,
concentration of STEM
employment, science and
engineering degrees, and
patent activity.

Massachusetts has been #1 in

the Milken Institute’s annual
State Technology and Science
Index every year since 2002.
15
Digital Health Cluster: Companies

There are roughly 350 existing

Massachusetts Digital Health companies.

16
Digital Health Cluster: Anchor Firms

Most companies in the

Healthcare Informatics
100 of any state:
(source: Healthcare Informatics)

GE Healthcare Boston MA
EMC Corporation Hopkinton MA
Nuance
Communications Burlington MA
athenahealth Watertown MA
MEDITECH Westwood MA
InterSystems Cambridge MA
eClinicalWorks Westborough MA
Kronos Incorporated Chelmsford MA
Verisk Health, Inc. Waltham MA Massachusetts is also home to a significant
Imprivata Lexington MA presence of many global companies with digital
HealthEdge Burlington MA
Capsule Technologie Andover MA
health focus, including Microsoft and Google, as
Philips Andover MA well as key business units such as IBM Watson
and Optum Analytics.

17
Digital Health Cluster: Associations

Massachusetts has a strong network of industry

and civic associations partnering with companies
and the state to support innovation and growth

18
Digital Health Cluster:
Innovation Programs
Digital Health Hospital /
Innovation Healthcare Startup Support
Programs Innovation Centers Programs

19
Digital Health Cluster: Healthcare

Healthcare organizations are key digital health customers

as well as centers of healthcare innovation:
• 79 Acute Care Hospitals
• 98 Community Health Centers with more than 250 sites of care
• >600 Behavioral Health Group Practices
• ~650 Long-Term and Post-Acute Care Providers
• 14,239 Active Primary Care Physicians
• 6,620 Active Nurse Practitioners
• 17,891 Active Specialist Physicians
• 6,301 Active Dentists
• 14 Private Payers / Insurers

20 Source: Kaiser Family Foundation Health Facts and MeHI internal data
Digital Health Cluster: Hospitals

Massachusetts is home to 79 hospitals, including

world-leading academic medical centers as well as a
network of specialty and community hospitals:
Anna Jaques Hospital Clinton Hospital Association Lemuel Shattuck Hospital North Shore Medical Center Union Hospital
Athol Memorial Hospital Cooley Dickinson Hospital Leonard Morse Hospital Norwood Hospital
Baystate Franklin Medical Center Dana Farber Cancer Institute Lowell General Hospital Quincy Medical Center, A Steward Family Hospital Inc
Baystate Mary Lane Hospital Eliot Hospital Marlborough Hospital Saint Anne's Hospital
Baystate Medical Center Emerson Hospital Marthas Vineyard Hospital Saint Elizabeth's Medical Center
Baystate Noble Hospital Fairview Hospital Massachusetts Eye and Ear Infirmary Saint Luke's Hospital
Baystate Wing Memorial Hospital Falmouth Hospital Massachusetts General Hospital Saint Vincent Hospital
Berkshire Medical Center Framingham Union Hospital Melrose-Wakefield Hospital Signature Healthcare Brockton Hospital
Beth Israel Deaconess Hospital Milton Good Samaritan Medical Center Memorial Hospital Southern New Hampshire Medical Center
Beth Israel Deaconess Hospital Needham Hallmark Health System Inc Mercy Medical Center South Shore Hospital
Beth Israel Deaconess Hospital - Plymouth Harrington Memorial Hospital Metrowest Medical Center St. Joseph Hospital
Beth Israel Deaconess Medical Center Healthalliance Hospital Milford Regional Medical Center Sturdy Memorial Hospital
Beverly Hospital Heywood Hospital Morton Hospital The Shriners' Hospital for Children
Boston Childrens Hospital Holy Family Hospital at Methuen Mount Auburn Hospital The Shriners' Hospital for Children
Brigham and Womens Faulkner Hospital Holyoke Medical Center Nantucket Cottage Hospital Tobey Hospital
Brigham and Womens Hospital Kindred Hospital Boston Nashoba Valley Medical Center Tufts Medical Center
Cambridge Hospital Kindred Hospital Boston North Shore New England Baptist Hospital UMass Memorial Medical Center
Cape Cod Hospital Lahey Hospital Newton Wellesley Hospital UMass Memorial Medical Center
Carney Hospital Lawrence General Hospital North Adams Regional Hospital Winchester Hospital
Charlton Memorial Hospital Lawrence Memorial Hospital North Shore Medical Center

21
Digital Health Cluster: Payers

• Massachusetts is home to a network of innovative, high-

quality healthcare payers. (source: NCQA)
• History of Health Plan innovation in digital health and
value based care:
– Blue Cross Blue Shield of MA Alternative Quality Contract starting in 2009
– Blue Cross Blue Shield of MA support for EHR Adoption with $50m grant in
2004
– Massachusetts won the SureScripts eRx award for the number 1
ePrescribing state for many years in a row (2007-2011 or later)

Aetna Health Inc. Harvard Pilgrim Health Care, Inc.

Blue Cross & Blue Shield of Mass. HMO Blue, Inc. Health New England, Inc.
Boston Medical Center Health Plan, Inc. Minuteman Health, Inc.
CeltiCare Health Plan of Massachusetts, Inc. Neighborhood Health Plan, Inc.
Connecticare of Massachusetts, Inc. Tufts Associated Health Maintenance Org., Inc.
Fallon Community Health Plan, Inc. Tufts Health Public Plans, Inc.
Harvard Pilgrim Health Care Of New England, Inc. UnitedHealthcare of New England, Inc.

22
 INVESTMENT:
-Competitive Venture Capital Environment
-Strong R&D Investments
-State Resources and Programs

23
Investment Environment
Massachusetts Digital Health Investors:
Boston is currently ranked 2nd in the •
•
.406 Ventures, LLC
Aptima Ventures LLC

U.S., with $966 Million in venture capital •

•
•
Beacon Angels
Bessemer Venture Partners
Bolt

deals in 2016 •
•
•
Borealis Ventures
Catalyst Health Ventures
Collaborative Seed and Growth Partners
LLC
• Draper Fisher Jurvetson
• Egan-Managed Capital
• Excel Venture Management
• F-Prime Capital Partners
• Flare Capital Partners
• Fletcher Speight Ventures
• Flybridge Capital Partners
• General Catalyst Partners
• Google Ventures
• Highland Capital Partners
• HLM Venture Partners
• Leerink Partners
• Long River Ventures
• MassVentures
• North Bridge Venture Partners
• Polaris Venture Partners
• Sigma Prime
• Strategic Health Ventures LLC
• Summit Partners
• SV Life Sciences
• Venrock Associates
• Waterline Ventures
• Waypoint Capital
• Zaffre Investments

24
Seed and Investment Capital
Massachusetts ranks first in patent MA receives more R&D
growth per capita and placed in the funding per capita, more National
top 4 of the Leading Technology Institutes of Health (NIH) funding as a
States in each category of technology percentage of GDP, and produces more
patents per capita. academic science & engineering articles
per capita than any of the states reviewed

Massachusetts is a top destination

for federal R&D funding both in
absolute and per capita terms

Massachusetts is a top destination for

venture capital (VC)’ ranking first in VC
as a percent of GDP.

25 25
State Digital Health Resources

• Massachusetts eHealth Institute at MassTech: State agency supporting digital health

innovation and implementation.

• MassVentures: State venture capital fund for early-stage firms

• Massachusetts Tech Transfer Center: State resource to advise and support with
commercialization of innovation

• MassDevelopment TechDollars: Loan program for nonprofits to invest in technology, can

support private nonprofit health care providers investing in digital health systems
• Health Policy Commission Healthcare Innovation Investment Program: $11 Million in
investments to help providers, health plans, and their partners to implement innovative models
that deliver better health and better care at a lower cost.

• The MassTech Intern Partnership: Provides stipends of up to $4800 to eligible start-up

companies, including digital health companies, to offset a portion of the cost of hiring a local
intern
• The Global Entrepreneur in Residence Program: Program to help entrepreneurs stay in
Massachusetts by facilitating pathways to work visas

• MassTAG: the Massachusetts Life Sciences Center leads a funding program to support
expansion and relocation of firms into Massachusetts
26
Massachusetts eHealth Institute

Massachusetts has an innovative state agency, the Massachusetts eHealth

Institute at the Massachusetts Technology Collaborative (MeHI). MeHI is
accelerating digital health innovation and supporting digital health innovation
infrastructure.
Programs include:
Connected Communities: $3
Million in grants for community-
based digital health information
exchange projects
eHealth eQuality: Incentive
payments to help Behavioral
Health and Long-Term and
Post-Acute Care providers
implement health information
technology
Mass Digital Health: Supporting
digital health innovation and
entrepreneurship

27
COLLABORATION:
-Strengths in Sectors that Intersect with Digital Health
-Interdisciplinary, Cross-Sector Collaboration
-Coordinated Public and Private Sector Leadership

28
Cross-Sector Strengths

Massachusetts gains an
advantage from
interdisciplinary innovation
and cross-sector
collaboration.
Digital health innovation
benefits from relative strengths
in tech/software, healthcare, life
sciences and medical devices,
robotics, cybersecurity, and big
data/analytics.

29
Strength: Life Sciences

• All of the world’s top 10 largest Strong Cluster Network:

biopharmaceutical firms maintain
facilities here, along with 550 other
biopharma companies and more than
400 medical device makers
• Life Sciences employs over 95,000
talented workers in Massachusetts
• 10-year, $1 billion comprehensive
state initiative supporting life
sciences innovation
(source: MLSC)

30
Strength: Big Data / Analytics

Massachusetts is home to
a robust and growing Big
Data/ Analytics industry
cluster
Source: 2015 Mass Big Data Indicators Report

31
Strength: Cybersecurity

Among U.S. states, Massachusetts has the third-most

cybersecurity firms (35) among the top 500, behind
California (150) and Virginia (41).
(Source: Cybersecurity Ventures Cybersecurity 500)

IBM X-Force Command Center, headquartered and

recently opened in Cambridge, MA brings
breakthrough technology and expertise to help clients
mature their security operations at the first-ever
Commercial Cyber Range.

32
Strength: Robotics

• Massachusetts has 122 commercial companies in the robotics cluster;

• Between 2011 and 2015, 33 new robotics businesses were created in
Mass., up 57% from five years earlier;
• Mass. robotics companies employed 4,716 individuals;
• Mass. robotics firms generated $1.6 billion in revenue in 2015;
• Mass.-based robotics companies received over $190 million in private
investments in 2015, equal to 23% of total U.S. funding and second
highest of any state, only behind California.

33 (source: MassTech 2016 Robotics Report)

Collaborative Leadership

Led by Governor Charlie Baker, public and private sector

leaders have convened to build a comprehensive strategy to
make Massachusetts the leading digital health ecosystem.

Public and Private Leaders at the launch of

PULSE@MassChallenge, June 2016

L-R: Dan O’Connell, CEO, Massachusetts Competitive

Partnership, Kerry Healey, President, Babson College, Steve
Samuels, Chairman and Principal, Samuels Real Estate,
Lindsay Simeone, MassChallenge, Bill Swanson,
Raytheon/MACP Chair, Governor Charlie Baker, Christian
Lagier, TechSpring, Scott Bailey, MassChallenge, Housing
and Economic Development Secretary Jay Ash, Senate
President Stan Rosenberg, Boston Mayor Martin Walsh, Jeff
Leiden, CEO, Vertex Pharmaceuticals, State Senator Eileen
Donoghue, Health and Human Services Undersecretary Alice
Moore, John Fish, CEO, Suffolk Construction, Bryan Jamele,
MACP Chief Operating Officer, & Laurance Stuntz, Director,
Massachusetts eHealth Institute at MassTech

34
 What’s Ahead:
The Massachusetts
Digital Health Initiative
About Mass Digital Health

Announced in January 2016, the

Massachusetts Digital Health
Initiative, or Mass Digital Health,
is a public-private partnership
building a stronger and more
competitive digital health
ecosystem statewide.

Mass Digital Health’s mission is

to make Massachusetts the
leading global digital health
ecosystem.

36
Mass Digital Health Goals

Massachusetts will further lead as the single

best destination for digital health innovation
by:
• Accelerating Digital Health Innovation

• Improving Health Data Transparency and Access

• Improving Healthcare Outcomes and Costs

37
Guiding Framework

Talent and
Workforce

Public-Private
Partnership /
Policy/Regulatory Industry-Academic
Accelerate Collaboration

Innovation
Data Access &
Transparency
Improve Healthcare
Outcomes and
Research and Costs Data Privacy and
Development Security

Regional
Strategies /
Statewide
Innovation

38
Accelerating Innovation

OPPORTUNITIES:
• Build greater connectivity and community across the digital health ecosystem
• Build greater visibility and brand recognition for the sector
• Help companies succeed faster by building a more transparent & accessible statewide
customer marketplace
• Help digital health customers more easily access innovation
• Leverage state government as a buyer and supporter of digital health innovation

STRATEGIES:
• Massachusetts Innovation Catalyst Fund
• Creation of PULSE@MassChallenge
• Investment into TechSpring at Baystate Health
• Marketplace Program
• Cluster Convening: Events and Meetups, Mentorship Events, Cluster Directory
• Align and promote public and private resources
• www.MassDigitalHealth.org and #MassDigitalHealth
• Standardized digital health technology transfer agreements across universities
• Leverage the state as a customer of digital health innovation

39
Data Transparency and Access

OPPORTUNITIES:
• Company development and growth based on open data
• Improved ability of entrepreneurs to test their ideas with real data
• Connections and coordination across available data sets, helping address public health
challenges
• Leverage partnerships with the high-impact Massachusetts big data / analytics cluster

STRATEGIES:
• State data coordination to address the opioid addiction crisis (Ch. 55)
• Leverage public and university assets to support testing new innovative solutions
– MITRE Synthetic Health Data
– Massachusetts Green High Performance Computing Center Data Labs
– Massachusetts Open Cloud
• Standardize legal agreements to improve consistency and efficiency
• Promote interoperability and exchange of health data

40
Improve Healthcare Outcomes

OPPORTUNITIES:
• Connect providers and patients to ensure all needed information is available to caregivers
• Analyze digital healthcare data to spot trends and predict healthcare challenges
• Leverage digital healthcare data to develop new therapies, devices, and best practices

STRATEGIES:
• Connect all statewide healthcare providers to electronic health records (MeHI’s eHealth
eQuality Program)
• Share data via health information exchange for better care coordination outcomes via the
HIway and MeHI’s Connected Communities Program
• Demonstrate innovative strategies such as telemedicine through the Health Policy
Commission’s Healthcare Innovation Investment Initiative
• Be a national leader in the shift to value-based care through innovative reform of
MassHealth

41
Global Economic Connectivity

• Eastern Time Zone

• East Coast presence with national reach
• Geographically dense – benefits of clustering, plus a
manageable size
53 International
Nonstop Flights
from Boston:
Note: Includes Seasonal
Service, Source: OAG &
Innovata Schedules

42
Best for U.S. Expansion

Great Quality of Life:

• Massachusetts is more affordable than California and New
York when it comes to cost of business, living and taxes
• Superior K-12 education, world-leading universities
• Outstanding healthcare offerings
• Network of social, professional, community, cultural, and
philanthropic organizations
• Great professional sports culture

43
Partner with Us

Massachusetts is a top global digital health

destination for growth, expansion, or strategic
partnerships. We want to work with you.

Connect with Us:

Timothy J. Connelly
Executive Director/CEO,
Massachusetts Technology Collaborative
[email protected]
(617) 371-3999
@Mass_Tech

44