The X Factor

Xealth is not your typical startup. Its main backers aren’t venture capital firms but more than a dozen health systems, including the Cleveland Clinic, Atrium Health, and Banner Health. Oracle-owned Cerner, one of the largest electronic medical records companies globally, is another investor.

Mike McSherry, CEO, Xealth

Courtesy of Xealth

Its customer base is varied, ranging from health providers, hospital systems, and patients. All need help untangling technological advances in health care — everything from mental health apps to vitals-tracking wearables.

“We saw this growing world of apps and devices and digital health solutions, but no easy way to integrate it into the electronic medical record,” says CEO Mike McSherry, “or for doctors to prescribe it in the same way that they prescribe that a patient gets meds, labs, or imaging.”

The Seattle digital health company works with health systems to integrate and prescribe digital health tools as part of a patient’s treatment plan. Its platform includes a suite of more than 70 apps and devices, everything from maternity care apps to glucose monitoring devices for diabetes, to nonmedical needs like meal delivery services, or rides to and from health facilities.

It has raised $52 million since McSherry and COO Aaron Sheedy spun it out of Providence Health and Services six years ago. The company now has more than 80 employees, and partnerships with 30 health systems across the country, including several since the start of the year.

“I didn’t have a background in health care, so I thought my fastest path to credibility would be strategic investors,” McSherry says.

Xealth is the sixth company McSherry has cofounded, with his roster including firms like Boost Mobile and virtual keyboard startup Swype. He hadn’t considered entering the health tech field until meeting Rod Hochman, president CEO of Providence, while working at speech recognition company Nuance Communications, which acquired Swype in 2011.

Hochman invited McSherry and his team at Swype to join Providence in 2015 as “entrepreneurs-in-residence” to help solve the day-to-day problems encountered by health care providers.

The digital health market was estimated to be worth more than $211 billion in 2022, according to Grand View Research, and is expected to grow at a rate of 18% annually by 2030.

McSherry plans to add to the company’s suite of apps, start working with insurance companies on payer reimbursement, and eventually find a way to embed Xealth’s technology into electronic health record systems to make it the “default of the care delivery experience.” It recently won an industry award in the “Blog of the Year” category.

“I want Xealth to be the ubiquitous infrastructure in the U.S. health care system,” he says, “for digitally prescribing tools and monitoring patients.”