Bupa unleashes $20m fund to change Australia’s crisis-plagued private healthcare

The health insurer wants to back start-ups that keep people out of hospital and help them better understand their lifestyle and how genetic risk factors affect their health.

Bupa’s Danielle Handley says 'innovation isn’t just a gimmick or a side-focus for us'.

Bupa has cracked open its $20m war chest, making its first investments as part of its foray into venture capital aimed at changing the way Australia’s crisis-ridden private healthcare is delivered.

The British-owned health insurance major has tipped $2.2m – or about 10 per cent of the fund – into four start-ups that are focusing on preventative healthcare, including better understanding genetic risk factors.

Danielle Handley – Bupa Asia Pacific’s chief customer and transformation officer – said the investments would help the insurer develop “innovative models of healthcare”.

“Innovation isn’t just a gimmick or a side-focus for us, we are on a mission to connect care physically and digitally to remove barriers and increase affordability and convenience,” Ms Handley said.

“It’s only through partnerships and collaboration across business, healthcare industry and government stakeholders that we can make this a reality.”

Australia’s health system is at a crisis point as private hospitals warn they are on the verge of going broke and engage in bitter contract disputes with their main funders: health insurers.

Bupa has found itself embroiled in such brinkmanship, with Australia’s biggest private hospital group Ramsay and Healthscope threatening to tear up contracts before salvaging deals at the 11th hour.

The health fund has been advocating alternative healthcare models for years, including completing more rehabilitation services in the home, with former chief executive Hisham El-Ansary once questioning whether paying $1900 a night at a private hospital was good value when a patient was “eating mashed potatoes and gravy” while only seeing a physiotherapist briefly.

Ms Handley said: “Despite our scale as an international health and care organisation, we know we cannot develop the future of healthcare on our own”.

“That’s why we are excited to be able to leverage the creativity and agility of the start-up community while offering them working access to Bupa teams and resources with the ambition of piloting their offerings into our customer base.”

The first start-ups to receive Bupa cash include Umps, which offers monitoring via in-home sensors; Eugene, which specialises in at-home “medical-grade genetic testing and genetic counselling”; and Vively – a wellness platform that helps people better understand how lifestyle choices affect glucose levels in real-time.

Bupa has just completed a pilot study with Vively, and the start-up’s CEO Tim Veron said the partnership would “grow their footprint”.

“We believe that everyone deserves access to tools that can help improve their health outcomes, and this pilot is a major step towards achieving that goal. We are really excited about what we can achieve together as part of this program and beyond,” Mr Veron said.

Bupa is now developing customer-facing programs with Umps and Eugene.

Bupa APAC CEO Nick Stone says ‘we want to accelerate healthcare innovations’.

Bupa Asia Pacific CEO Nick Stone said when the fund was launched in February last year that start-ups would play a “critical role in the future of healthcare”.

“We want to accelerate healthcare innovations that make a difference to our customers and the wider community. Start-ups are agile and move quickly to solve problems that meet customer needs, supported by new technologies and design,” Mr Stone said.

“We know we need to do more to modernise healthcare, we all have a role to play in delivering healthcare that is more personalised and less fragmented, which places the patient at the centre.”

Bupa is not the first company to create a venture capital arm. Telstra formed Telstra Ventures 14 years ago, and it was considered the jewel in the telco’s crown under former CEO Andy Penn, who – like Bupa – said it was “a key part of our continued network and technology leadership”.

But under Mr Penn’s successor, Vicki Brady, Telstra sold its 62.5 per cent share in the fund – since rebranded Titanium Ventures – for $137m.

Telstra chief financial officer Michael Ackland said last year that the decision to exit the venture capital fund was “consistent with our focus on capital discipline” and “active portfolio management”.

Titanium Ventures has returned almost $1bn to its investors, and while it’s had some hits it’s also had misses, namely being a notable backer of collapsed crypto exchange FTX.