Notes on Catalyzing Health, November 2025: The Missing Middle: Growing Health Innovation for the Common Good

American healthcare stands at an impasse that has become almost ritualistic in its predictability. Each year brings the same litany of crises—costs that outpace inflation, disparities that cleave along familiar lines of race and class, outcomes that trail behind peer nations. And each year, the proposed solutions follow their own well-worn grooves: more market competition here, more government intervention there, an endless dialectic that somehow never resolves.

Public-interest technologies—innovations designed not for maximum profit but for maximum good—represent one such approach to the persistent problems of modern healthcare. These are technologies that operate in the spaces where both market forces and government initiatives lose their potency. They address a range of otherwise intractable problems – these include extending care to communities the market has written off as unprofitable, advancing preventive health practices at broadly accessible prices that do not attract venture capital, developing treatments for conditions whose sufferers are too few to justify a pharmaceutical company's R&D budget. And while many of these problems have been traditionally left for government to support, recent austerity measures paired with a decades long decline in institutional trust has shifted the balance away from such broad expectations.

The promise of public-interest technologies is substantial. Unlike traditional nonprofits that focus on provision of services, public-interest health technologies aim to fundamentally alter the economics of care itself by making the previously impossible affordable and the previously unreachable accessible. They are, in essence, attempts to use innovation as a lever for equity rather than extraction and serve as a powerful counterbalance to the trends of the current moment. This shift in economics reduces the cost of implementation, widening the range of possible financiers beyond governments or the largest philanthropies.

Yet the organizations building these technologies frequently find themselves caught in one of several peculiar traps—traps that reveal the fault lines in how we fund and sustain mission-driven work in America. Meeting this moment will require clear understanding and creative solutioning to overcome these systemic gaps. In the venture world, start-ups understand what challenges they will need to address and what paths can be taken to do so because knowledge-sharing across companies happens through the movement of talent, the recycling of playbooks, and the accumulated wisdom of entrepreneurs and investors who have seen patterns across dozens of companies.

The public-interest sector needs to deliberately cultivate this same muscle memory to address their own unique set of challenges, including those described below:

The Tyranny of Early Success
The trajectory begins promisingly enough. A team identifies a genuine market failure—perhaps a diagnostic tool for a disease that ravages low-income communities, or a digital platform that could bring specialist care to rural areas. They secure early catalytic funding, often from philanthropic foundations, and use it to build, test, and evaluate whether their concept works.

And then, paradoxically, their success becomes their undoing.

Philanthropy is the primary source of funding for public interest technologies, particularly in health.  The funders thrive on breathing life into new ideas – providing seed capital to show the world what is possible if we think differently. This is a wonderful resource for early design and validation. Once that proof is established, these funding organizations turn their attention toward new frontiers, new risks, new recipients for their catalytic dollars.

This leaves public interest technology organizations stranded in what has come to be known as the “missing middle”—too mature for the grants that birthed them, too mission-constrained to attract traditional investors, too early to be self-sustaining.

Growth-stage investors focused on this segment, located within the impact investor or social capital sector, are insufficient for the number of solutions.  Further, they tend to be focused on access and service delivery rather than on technological innovation. This can leave publicly minded health innovations in a kind of developmental purgatory, their very achievement having disqualified them from the support they need to fulfill their missions at scale.  This is not merely an inconvenience. It represents a structural failure in how we cultivate innovation for the common good.

When the User Isn't the Customer
The complications multiply when one considers the peculiar economics of serving underserved populations. In traditional markets, the elegance of supply and demand creates a feedback loop: customers signal their needs through purchasing decisions, and companies respond accordingly. But public-interest health technologies operate in markets where this mechanism has broken down entirely.

Consider a startup developing an affordable screening tool for cervical cancer in sub-Saharan Africa. The women who would benefit from this technology cannot pay for it; if they could, the market would have already solved the problem. Instead, the organization must court an entirely different constituency: government health ministries, multilateral organizations, and philanthropic foundations. The users and the buyers occupy different worlds, with different incentives, different timelines, different procurement processes. This separation distorts everything. Product design must satisfy not just the needs of patients and clinicians but the bureaucratic requirements of institutional purchasers. Distribution strategies become exercises in navigating labyrinthine public-sector processes. The feedback loops that allow market-based companies to iterate rapidly stretch into months or years of stakeholder management.

Even more pernicious is the way this dynamic constrains ongoing innovation. A commercial medical technology company typically reinvests a substantial portion of its revenue into research and development, maintaining the technical edge that justifies its existence. But organizations dependent on grant funding or government contracts face an impossible choice: use scarce resources to reach more people with existing tools, or invest in improving those tools for the long term. Most choose deployment, because the immediate need is visceral and the metrics that funders care about—lives saved, communities reached—favor implementation.

The can result in a kind of unplanned obsolescence, where today's breakthrough becomes tomorrow's legacy system, unable to evolve as technology advances or as the needs of communities shift.

The Talent Deficit
Publicly minded start-ups also need to compete with for-profit companies for talent. Building a successful public-interest health technology requires the same sophisticated knowledge that drives any biotech startup or medical device company. Drug development demands an understanding of regulatory pathways, clinical trial design, manufacturing scale-up, and distribution logistics. Digital health tools require fluency in data architecture, cybersecurity, and user experience design. These skills command premium salaries in the for-profit world. Public-interest organizations, operating on constrained budgets and unable to offer equity compensation, struggle to compete for this talent. The people who join such ventures tend to be driven by mission, willing to accept the financial sacrifice for the sake of impact. That talent pool is mighty, but it is not infinite.

How does an organization price its innovation to maximize access while ensuring survival? What partnerships might provide routes to scale without compromising core values? When should a technology be licensed broadly versus controlled tightly to prevent mission drift? These questions have no obvious answers, yet getting them wrong can mean the difference between enduring impact and a cautionary tale.
The for-profit sector has evolved sophisticated infrastructure to support entrepreneurs through these challenges—accelerators that provide both capital and curriculum, investors who open doors and offer guidance, strategic acquirers who can take proven innovations to global scale. The public-interest sector has built no equivalent architecture.

A Studio for Scale
The Digitalis Commons Scale Studio represents a new attempt to construct the missing infrastructure: an accelerator designed specifically for organizations that have proven their technologies work, and now face the daunting task of making them scaled and sustainable. The model borrows from the venture world's playbook while adapting it to the realities of mission-driven work. The goal is not to produce unicorns but to create exemplars — organizations that test models for growth and demonstrate how public-interest technologies can grow without abandoning the communities they serve. We expect that these solutions will vary by asset class, user group and geography. Each successful example creates a template, a set of practices that others can adapt to their own contexts, and a proof point to attract more growth stage capital to the sector.

Beyond Individual Solutions
The challenge of scaling public-interest health technologies is ultimately a challenge about how we value work that serves the common good. Markets excel at allocating resources when goods are excludable and benefits accrue to those who pay. They fail when neither condition holds—when the benefits of innovation spill out across entire communities, when the people who need a technology most are precisely those who cannot afford it.

This is not a bug in the system; it is the system working as designed. Markets follow incentives, and the incentives remain misaligned with equity. What is required, then, is not just better support for individual organizations but a fundamental rethinking of how we finance and sustain innovation in domains where market logic breaks down.

This might mean new forms of patient capital that prioritize long-term impact over near-term returns. It might mean government procurement practices that actively cultivate public-interest alternatives to commercial products. It might mean philanthropic strategies that move beyond early-stage catalytic funding to embrace the less glamorous work of helping proven organizations endure.

Most fundamentally, it requires acknowledging that some innovations—those that serve communities the market has abandoned, that address problems too complex or unprofitable for commercial solutions—will never be self-sustaining in a traditional sense. They will always require subsidy, whether from government, philanthropy, or some novel mechanism we have yet to imagine.

The question is not whether we can afford to provide this support; the question is whether we can afford not to. Are we content with a healthcare system where innovation serves only those who can pay for it, or do we believe that the tools to advance human health should be available to all?

The organizations building public-interest health technologies are testing a proposition: that we can create a different kind of innovation economy, one where technical excellence and social mission reinforce rather than contradict each other. Their success or failure will signal not just the viability of particular technologies but the viability of equity itself as an organizing principle for how we solve problems. That is a test we cannot afford to fail.

– Lara Mangravite, PhD and Geoffrey W. Smith.



First Five
First Five is a curated list of articles, studies, and publications that have caught our eye on the topics of public goods and emerging applied technologies. This posting features public interest health technologies that have caught our eye:

1/ OpenCRVS
In order for a person to access government-provided social services, one needs a legal identity. OpenCRVS is an open source platform used by governments and NGOs in low resource settings to perform civil registrations including the generation of legal birth certificates.

2/ Mental Health Innovations
UK charity leveraging text based apps and other simple technologies to provide mental health support.

3/ Every Cure
Drug repurposing organization seeking to quickly match and treat patients with existing, effective medications.

4/ OpenADME
Nonprofit coalition distributing open-source predictive models of safety and toxicity for small molecules to enable more reliable, cheap, and effective discovery of treatments.

5/ TTAM Research Institute
Companies rarely transition from for-profit to nonprofit, so all eyes are on 23andMe as they do so. Early indicators from their Lung Cancer Genetics Study and open source data platform point to use of their technology to advance early disease screening and detection.

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