Health systems are increasingly spinning off technologies and innovation arms into standalone companies, a shift aimed at accelerating innovation, creating new revenue streams and extending their influence beyond their own organizations.
In recent months, several large systems have launched independent companies focused on artificial intelligence and venture investing, while retaining close financial and strategic ties.
In December, Marietta, Ga.-based Wellstar Health System’s innovation and venture capital arm, Catalyst by Wellstar, spun off Polysight, a company that uses AI to help health systems comply with shifting regulatory requirements.
Polysight uses closed large language models with agentic AI to continuously monitor regulatory updates and proposed rules, flagging important changes proactively. Wellstar is currently piloting the technology.
That same month, Somerville, Mass.-based Mass General Brigham spun out an AI startup called AIwithCare, which uses AI embedded in the EHR to match patients with clinical trials.
“To be able to do this in an automated way using a large language model is really breakthrough technology,” Chris Coburn, chief innovation officer at Mass General Brigham, told Becker’s. “No one wants clinical trials to take as long as they take or be as expensive as they are, but the fact is it’s painstaking to find people who meet the eligibility criteria.”
Mass General Brigham is no stranger to spinning out companies. According to Becker’s reporting, the health system spins off about 30 companies each year.
Other health systems are taking the strategy a step further by spinning out entire venture operations.
In January, Renton, Wash.-based Providence spun out its venture capital arm, Providence Ventures, rebranding it as Allumia Ventures.
The venture arm was formed in 2015 to incubate healthcare solutions and manage funds exclusively for Providence. Under the new structure, Providence will continue to work with Allumia and has committed $150 million over the next 10 years to the firm’s third fund. Investment proceeds will contribute to the health system’s long-term financial health.
Providence has also spun off multiple companies while retaining equity stakes. In 2024, Sara Vaezy, executive vice president and chief strategy and digital officer at Providence, told Becker’s the health system spun off four companies.
“Our goal is to fill existing gaps in the market, leveraging our unique perspective as a steward of data and patient relationships,” Ms. Vaezy said. “Ultimately, these spinoffs are not an end in themselves; they are a means to solve real problems for our patients and the healthcare community as a whole.”
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