The historic Banknote Building in Hunts Point houses as many as eight healthcare startups in the South Bronx. (SAHELI ROY CHOUDHURY / The Bronx Ink)
In a cubicle on the second floor of the historic Banknote Building in Hunts Point, Thelvis Alston worked the phones one September afternoon, canvassing potential clients for the new data services startup he helps to run. Sector-Wide Health, which opened in January last year, has faced stiff competition from larger companies ever since the Affordable Care Act contributed to this growing economic sector in the borough.
The company has had a “difficult” start, said Alston, a 41-year-old Bronx native and vice president of operations. Building a client base of doctors who want help digitizing their medical records has been “slow but steady.” Bronx’s healthcare industry has been on the upswing over the last five years. One reason for the mini-boom is the Affordable Care Act, which offers more medical access to more people throughout the borough. Between 2009 and 2013, the sector added nearly 5,000 new jobs in private hospitals, clinics, and other agencies. But the growth has not affected all businesses equally. Small businesses such as Sector-Wide Health have trouble breaking into a market face with so many larger healthcare organizations and agencies that are significantly better funded, like the Urban Health Plan for example.
Alston believes there is still an untapped need by doctors need to digitize their medical records to comply with new regulations for Medicaid and Medicare incentives under the Affordable Care Act. Sector-Wide Health are best situated to fill that need. Alston regularly meets with neighborhood doctors to identify what type of digitization software would work best for their practice. He then guides them through the transition process. “It’s about talking to doctors just to get them comfortable with the thought of where their business is going to go in the next ten years,” Alston said. Sector-Wide Health’s growing number of clients mainly include private practitioners and small clinics in the Bronx.
Joe Carrano, another Bronx native, remains upbeat about the prospects for healthcare outfits, both big and small, in the borough. “The industry is huge and healthcare technology is really growing here right now,” said the 25-year-old Carrano, who is director at the Bronx Business Incubator in Hunts Point. The incubator houses 66 start-ups and eight of them, including Sector-Wide Health, are in the business of providing healthcare and healthcare-related service.
Carrano believes the Bronx has more room for growth, for the healthcare and healthcare-related industry, than any other borough. Its close location to Manhattan and its relatively cheap real estate makes it attractive for investors, he said. The incubator provides startups with consultations, networking opportunities, and affordable office space. It has approximately 180 workspaces, comprising virtual offices, physical workstations, conference rooms, and meeting areas. “It’s up to entrepreneurs in the Bronx to shape the development of the business community,” said Carrano.
For Sector-Wide Health, the road ahead is uphill. It is still relatively new, has a comparatively low budget, and comprises a small team of employees. The Affordable Care Act, Alston believes, provided an important point of entry into the market. In order to survive against bigger, better-endowed competitors, the startup has to quickly carve out a niche area of service.
Some entrepreneurs believe the Affordable Care Act works against small businesses in an already saturated healthcare industry. One of them is Michael Harris, a registered nurse and owner of a startup called Transparency in Registered Nursing. His startup, founded in 2009, brings “high-tech nurses into the homes of patients” for both emergency treatments and long-term outpatient care. Harris believes the Act “drove out small businesses” that have no interest in doing business with the insurance plans that are part of the marketplace. Unless businesses sign up to be part of the marketplace, he said, they cannot exist within the healthcare ecosystem created by the Act.
Harris’ gripe with the Act boils down to “nine insurance companies in downtown New York State” that control the marketplace, and the participating hospitals and practitioners that provide “substandard treatment.” He said those are the main reasons why he did not sign his company up to be part of it. Harris would not specify which of the nine insurance companies he talks about but there are at least 16 participating in the Affordable Care Act marketplace in New York State. As a result, he now markets his services mainly to people who can afford insurance plans that offer “unbiased, out-of-network benefits.”
Alston does not share Harris’ skepticism and remains optimistic about the future for healthcare startups. He thinks opportunities and benefits created by the Affordable Care Act will eventually benefit small business outfits. “People will catch up,” he said with a smile.