Investing in Health Care for Vulnerable Populations

Healthcare Investment & Impact: A Panel Discussion Summary

Key Concepts:

• Health Equity: Addressing systemic disparities in health outcomes based on social determinants.
• Social Determinants of Health (SDOH): Economic and social conditions that influence individual and community health (e.g., housing, food security, transportation).
• Revenue Cycle: The process of managing healthcare revenue from patient care to payment.
• Baumol’s Cost Disease: The tendency for costs to rise in labor-intensive industries, limiting productivity gains.
• Impact Investing: Investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.
• ROI (Return on Investment): A measure of the profitability of an investment.
• Venture Capital (VC) Cycle: The typical 10+2 year timeframe for VC investments (10 years investment, 2 years potential extension).
• 1115 Waiver: A Medicaid waiver allowing states to test innovative approaches to Medicaid delivery and financing.

I. Introduction & The Current Healthcare Landscape

John Gordon (moderator) opened the discussion highlighting the significant disparities in US healthcare outcomes – the wealthiest 1% experiencing world-class health, while others face outcomes comparable to developing nations. He noted the challenging political climate and recent Medicaid cuts, framing healthcare as a historically difficult sector for investment. The panel aimed to explore healthcare investment from three perspectives: traditional investing, entrepreneurship with capital raising, and non-profit capital deployment for impact. Key questions centered on timeframe, ROI measurement, and whether healthcare’s scope is sufficient to address its inherent problems.

II. Panelist Backgrounds & Initial Capital Flows

• Manmeet Singh: Alumnus with a background in global health and economic development. Founded City HealthWorks (501(c)(3)), later converting to a for-profit and securing equity investment. Currently with Regenstrief Institute, fostering industry-research collaboration. His initial funding came from philanthropic foundations (Robinhood, Robert Johnson Foundation) and research grants, transitioning to family office equity and debt financing for clinic acquisition.
• Julia Eashra: Physician and faculty at Columbia, founded the Dalio Center for Health Justice with a $50 million gift from Ray and Barbara Dalio (Dalio Philanthropies), subsequently raising an additional $13 million. The Center focuses on identifying and eliminating health inequities through a multi-faceted approach.
• Jason Torres: Engineer and former Wall Street professional, now an investor focused on the intersection of healthcare, policy, and finance. Early investor in companies like Athenahealth and Wellcare. Founded Sana, a firm investing in solutions addressing healthcare gaps.
• John Gordon: Experienced in healthcare strategy and venture capital, previously leading venture funds at NewYork-Presbyterian and Commonwealth Care Alliance, now founder of F42, a non-profit focused on person-centered healthcare transformation.

III. Capital Acquisition & Deployment Strategies

Manmeet Singh detailed a progression from philanthropic funding (emphasizing data-driven impact) to equity investment during the pandemic, ultimately pivoting to acquiring a medical practice through debt financing. He emphasized the difficulty of securing capital for revenue-generating healthcare businesses focused on innovation. Julia Eashra described the Dalio Center’s unique funding model – unrestricted gifts allowing for long-term, flexible investment in research and community-based initiatives. Jason Torres highlighted the importance of aligning with institutions comfortable with the complexities of healthcare policy and regulation, focusing on scalable solutions with demonstrable ROI. Gordon emphasized the shift from purely financial returns to impact-driven investment, spurred by his experience at F42.

IV. Timeframe & Impact Measurement Challenges

Gordon introduced the concept of the “hockey stick curve” in healthcare – a long period of investment with delayed returns, contrasting with the typical 10+2 year VC cycle. He cited Arvind Eye Hospital as an example of a successful, long-term model with a 31% EBITDA margin despite providing significant free care. The panelists discussed the tension between short-term financial pressures and the need for sustained investment to address complex health inequities.

• Manmeet Singh: Advocated for greater coordination of funding cycles and a focus on both operational excellence and clinical impact.
• Julia Eashra: Emphasized the importance of long-term commitment, establishing clear process metrics, and involving communities in the design and implementation of solutions. She highlighted the detrimental effect of short-term funding cycles on community trust.
• Jason Torres: Advocated for focusing on the bottom 25% of the population in terms of access and outcomes, aiming to reduce disparities and improve overall health.

V. Addressing Social Determinants of Health & Intergenerational Wealth

A question from the audience highlighted the critical role of wealth in health outcomes and the need for investment in intergenerational wealth building. Manmeet Singh emphasized the importance of creating a sustainable healthcare workforce that can deliver both financial and clinical results. Julia Eashra pointed to New York State’s 1115 Medicaid waiver, which included funding for workforce development programs. She underscored the need for healthcare institutions to invest in career pathways for individuals from underserved communities.

VI. Key Takeaways & Concluding Remarks

The panel underscored the following key points:

• Healthcare is a complex, long-term investment: Traditional VC cycles may not be suitable for addressing systemic health challenges.
• Impact measurement is crucial: Clear metrics and a focus on both financial and clinical outcomes are essential.
• Addressing social determinants of health is paramount: Investing in economic opportunity and community-based solutions is critical.
• Flexibility and long-term commitment are vital: Unrestricted funding and sustained engagement are necessary to drive meaningful change.
• Community involvement is essential: Solutions must be co-created with the communities they are intended to serve.
• The revenue cycle is a significant cost driver: Addressing inefficiencies in revenue cycle management could free up resources for patient care.

The discussion concluded with a call for greater collaboration between investors, entrepreneurs, and non-profit organizations to address the challenges facing the US healthcare system and advance health equity.