A new era began in June within Providence St. Joseph Health's digital innovation effort, which announced that it had launched its first internally incubated technology company, Xealth.

The Renton, Wash.-based health system developed the company through its Digital Innovation Group and hopes it fills an engagement gap between clinicians and patients.

Xealth’s software aims to make it easier for physicians and other providers to prescribe digital apps, reading materials, videos and other nonpharmaceutical applications through the hospital’s electronic health record system. “Think of us as a digital formulary,” says Mike McSherry, Xealth’s CEO and a technology executive-in-residence at Providence.

The Xealth investment by Providence rolled out of the system’s strategy of identifying “big needle–moving” challenges, problems or opportunities, and then figuring out the best way to try to solve them, says Aaron Martin, executive vice president and chief digital innovation officer with Providence St. Joseph Health.

The first step is to see if the company already owns the technology that can solve that problem. If it doesn’t own it, it looks for best-of-breed companies that solve the problem, and sometimes invests. “If we don’t already own it, and we can’t find it in the market, then we’ll build it,” and Xealth is the first example of doing that, he says.

Martin says that spinning the company out as a commercial offering is almost a necessity to keep the health system relevant and competitive with other offerings. “You don’t want it to become stale technology. ... You’ve seen this over and over and over again with health systems that built technology that don’t get out in the market and compete.”

Providence’s health care innovation efforts also include an internal development program that takes a "Shark Tank" approach, one that this year turned the tables and had senior managers pitching ideas to less-senior ones.

Providence and UPMC are the first two to use the system, and others are expected to sign on, according to a news release from Xealth.

Xealth’s backers hope that physicians will be more likely to prescribe nonpharmaceutical information and tools, improving patient care and keeping patients more engaged in their care.

“Physicians love it because it’s easy and it’s within their workflow. Patients love it because they’re getting additional care that goes outside the four walls of the clinic. As chief digital officer, I love it because it provides more opportunities for the patient to come back to our digital properties and be engaged in their care,” Martin says.