We’ve each been on our own respective journeys to transform healthcare: Hemant, as the architect of our ‘health assurance’ movement; Marc, as a much celebrated and respected health care practitioner, leader and operator. Now we have teamed up for what we see as a bold leap forward in our shared ambition to make affordable, proactive and accessible care a reality.
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Sometimes, two different paths can lead you to the same place.
We first met in 2017 when GC was hatching Commure, and when Intermountain’s transformation journey towards value-based care offered a much-needed blueprint for what an operating system for healthcare really needed to achieve.
For several years after that, Intermountain continued on its path toward value-based care as a leading player inside the healthcare system, while General Catalyst began our own journey to create the ‘Amazon ecosystem of healthcare’ to help systems everywhere achieve the promise of health assurance: a more affordable, accessible and proactive system of care. We realized that a move to value-based care would be an essential part of any solution.
Today we are unveiling a new company owned by General Catalyst called Health Assurance Transformation Corporation.
HATCo (as we call it) is going to be focusing on three things: 1) working with our 20+ health system partners to help them develop and execute their transformation journey to health assurance; 2) helping to catalyze the health assurance ecosystem, building an interoperability model with technology solutions including a subset of our health care portfolio companies to drive this transformation; and 3) acquiring and operating a health system for the long term where we can demonstrate the blueprint of this transformation for the rest of the industry.
HATCo’s charter is not to disrupt healthcare systems; rather, it is to be in service of healthcare organizations everywhere to change how they deliver a fundamentally better experience for consumers – and to prove the transformative effect of a true partnership between technologists, caregivers and capital. It is our belief that by making these organizations more profitable, more vibrant and more innovative, they will be better equipped to serve everyone in their communities with greater impact.
There are 5 core principles that are foundational (and distinctive) to HATCo’s approach:
- A true alignment of stakeholder interests. You cannot build an enduring functional system where providers, patients, and the financial players (investors, insurance companies, government) are not aligned. HATCo will be purpose-built with the goal to ensure all the stakeholders are similarly incentivized (via a value-based care model) to improve access and outcomes and to make care more preventative and proactive.
- More ‘patient’ capital with decades-long time horizon. The transformation of our healthcare system is not a short-term endeavor. Even venture’s decade-long return horizons are insufficient to effect real, systemic change. HATCo aims to create a new standard of healthcare investing and set expectations for investors to think longer term.
- A reorientation around platform innovations. As we see it, one of the biggest challenges of the PE model in healthcare today is the maniacal focus on taking costs out of the system, leaving little incentive for investment of any kind. We believe it’s not about taking costs out as much as it is about putting technology and innovation in. Part of the HATCo plan will involve giving health systems the opportunity to capitalize on new revenue streams, which (in turn) should allow them to invest in more innovation and in servicing their communities. In addition, HATCo will look to foster the creation of scaled platforms (rather than fragmented point solutions) that can provide the missing technology pieces of the puzzle.
- A commitment to ‘radical collaboration’. HATCo is committed to creating an open innovation platform. We plan to partner very closely with each of our 20+ healthcare system partners, openly sharing best practices, new technologies and a transformation playbook with those partners, who together cover over 15% of the US population. This represents a rare opportunity to demonstrate, replicate and scale best practices, while reducing the burden on individual health systems to develop their own bespoke transformation assets.
- A decisive pivot to value-based care – As we’ve said, a shift to value-based care is an essential part of our approach. HATCo intends to work with the ecosystem to demonstrate that a model that is better for patients can also be good for business. The board and leadership team of HATCo bring the kind of experience and expertise we believe is required for driving value at scale, digital transformation, and healthcare financing. The hope is that over time and together, HATCo and the HA ecosystem will help deliver a far better experience than consumers experience today.
Building what we see as a transformational company is another step in GC’s move to ‘transcend’ venture capital. We’ve said that achieving HATCo’s mission will require a long-term orientation that existing fund structures cannot support. Also, as we move to become responsible stewards of a health system in one of our nation’s communities, we did not want to be locked into arbitrary timelines of how long we could operate. Luckily, we have mission-driven partners who share our long-term orientation and believe in this vision, and who want to empower us to operate a hospital system and HATCo as a whole for decades to come.
When we met in 2017, both of us knew it would be very hard to create the kind of change we seek alone – either operating solely from the inside or solely from outside the system. Today, we have a much deeper appreciation for how hard it is, but we see a path forward that will require an unprecedented level of collaboration between our health assurance founders, our health system partners and the broader ecosystem…and we know they’re all excited to do so.
We hope our work will inspire others to join our health assurance movement and usher in a new era of better health for everyone in our communities.