Sandbox Industries Tries to Lead Health Care Innovation

December 6, 2012

11:00 am

As startups try to tackle the health care industry, Blue Cross Blue Shield has been behind the scenes watching and learning.

Blue Cross Blue Shield partnered with Chicago’s Sandbox Industries, a startup incubator and accelerator, to create BCBS Ventures. BCBS Ventures has two venture funds, worth $295 million, to invest in health startups. So far, they have funded 17 different companies under Sandbox’s management.

“[Blue Cross Blue Shield] views it as a strategic investment in understanding the innovation that’s happening around them,” explains Michael Spadafore, analyst at Sandbox Industries.

On top of that, Sandbox Industries launched a three-month health startup accelerator called Healthbox in January 2012. It started in Chicago and has since expanded to London and Boston, where 10 startups just graduated. One of them is Bon’App; you can say a food like “taco” and it will tell you whether it’s high in fat, sugar, or calories. Healthbox will be announcing new cities for 2013 soon.

Sandbox has been building out its health expertise to meet the growing demand for innovation in health care. When health care reform goes into effect, 30 million new consumers are expected to get health insurance. That means that insurance companies will be competing for their business, and they need to understand what consumers want. This is where startups come in; a startup like EveryMove, a BCBS Ventures company that rewards users for healthy behavior, could provide insight.

On top of that, health care is an extraordinarily convoluted field. If entrepreneurs are to succeed, they need to understand things like reimbursement structure and incentives, and have access to large health corporations. That’s where Sandbox comes in.

The fact that Blue Cross Blue Shield is paying attention – and if they are, other organizations certainly are – only reinforces the opportunity. When established companies admit that they have something to learn from the little guys, the little guys should step up to the plate.

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Kira M. Newman is a Tech Cocktail writer interested in the harsh reality of entrepreneurship, work-life balance, and psychology. She is the founder of The Year of Happy and has been traveling around the world interviewing entrepreneurs in Asia, Europe, and North America since 2011. Follow her @kiramnewman or contact

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