The Obamacare Start-Up Boom

Health ventures rush to cash in on the law.

Few issues divide the country more sharply than Obamacare, which will require millions of businesses to provide health insurance for their workers. Like it or not, the Affordable Care Act (ACA) will also shake up the industry’s business model. It will change the way health care is delivered and paid for, focusing on outcomes rather than fees for service, and it will reduce payments to providers that don’t measure up.

That’s why entrepreneurs and investors are all over Obamacare like a rash: there’s a buck to be made for start-ups that can adapt quickly to the new model. And many are doing so. Consider IntelligentM, a company that makes a smart bracelet that helps hospitals combat acquired infections, which cost the health care system $30 billion a year. Or Adhere Tech, which monitors patients to make sure they’re taking their medications–too many don’t, which makes them require yet more care. Or Care at Hand, a medical-information mobile app for home-care workers that uses an algorithm to spot patients who may be headed for trouble.”Obamacare has been a huge force for getting insurers, pharmaceutical companies and health care providers to seek out innovation,” says Dr. Brad Weinberg a founding partner of the health-care-business incubator Blueprint Health. “Partly it’s out of fear that the industry is changing and the status quo will no longer work, and some of it’s coming from very real changes in how these organizations are going to be compensated.”

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