General Catalyst announced a partnership with WellSpan Health, marking its fourth digital innovation partnership with a health system as the venture capital firm sets its sights on inking 10 health system collaborations by 2023.
The Cambridge, Massachusetts-based firm and the South-Central Pennsylvania-based health system share an interest in improving patient experiences, optimizing caregiver relationships and creating new care models, according to an announcement. WellSpan hopes the partnership can help address four innovation focus areas of its health system including brand experience, innovative and new care models, patient-provider relationships and business efficiency, said Roxanna Gapstur, Ph.D., R.N., WellSpan’s president and CEO.
“An area that we’ll focus on with General Catalyst right out of the gate may be access and navigation of the health system as well as personalization,” Gapstur said in an interview. “I believe that healthcare has a lot of opportunity in the personalization space, and it’s a way for us to differentiate ourselves from other systems across our geography. When you think about it, we actually put the burden of figuring out what patient’s need from their healthcare on the patient … so trying to think through how we might help people navigate the health system better could be one of the greatest services we could do for our patients.”
The integration of WellSpan into the General Catalyst “health assurance” network of healthcare technology companies provides the opportunity for future cross-pollination. The health system first saw the success of a General Catalyst-funded company through its own use of Livongo to manage the benefits of its 20,000 employees, according to the VC firm.
WellSpan boasts 220 locations and eight hospitals in South-Central Pennsylvania and northern Maryland. Access, human experience of healthcare, affordability and navigating the complexity of healthcare are the four primary challenges that Gapstur sees as top barriers to care for WellSpan’s patient population.
The health system was chosen by General Catalyst due to Gapstur’s focus on innovation, the investment of WellSpan’s board in transformation and innovation and the position of WellSpan in suburban communities, according to Daryl Tol, head of health assurance ecosystem at General Catalyst. He thinks suburban centers can be a hub of health innovation.
“The thesis we have is that transformation will happen through health systems, not by harming them, not by destroying them, but with them,” Tol said. “When we combine health systems with innovators with new capabilities, that’s how we see radical collaboration: multiple parties coming together, sharing unique knowledge from each space and creating a smarter approach than can be created individually in our separate silos.”
The collaboration is General Catalyst’s latest strategic partnership since July when it closed its $670 million Health Assurance Fund II and hired Dr. Marc Harrison, former CEO of Intermountain Healthcare. The firm partnered with Intermountain in May, adding it to a network of healthcare partners including Philadelphia’s Jefferson Health and Nashville’s HCA Healthcare.
The firm hopes to use its new fund to aid in the ongoing convergence of digital and physical care and increase its focus on health equity, mental health and value-based care, General Catalyst executives said.
“It’s one thing to create strategies around primary care if you’re Walmart or Amazon or CVS; everyone’s looking at it; it’s important,” Tol said. “But at some point, you hit the end of primary care and you get into the complexity of the rest of healthcare: specialty care, complex care, health care in institutional settings. When General Catalyst looks at that fragmented nature of healthcare, the parties that are trying to put that together in a sensible picture are health systems partnered with innovators. That’s why we believe in this space so much because that picture will come to life not when someone picks a space that they want to own and innovate but when the complete nature of healthcare gets connected.”
The health assurance group of investments, described by some as a federation, reflects a unique strategy of targeted investment and cross-pollination between General Catalyst’s partners.
The firm has lured other former health system CEOs to the health assurance cause including Dr. Stephen Klasko, formerly of Jefferson Health, and Ron Paulus, former president and CEO of Asheville, North Carolina-based Mission Health. While solid projects under Harrison are yet to be determined, at Intermountain he oversaw the rollout of Intermountain Connect Care Pro which provides virtual physician-to-physician consultations.
All signs point to General Catalyst’s continued investment in healthcare with specific interests in digital growth and development. The strategy sets the firm apart compared to the overall decrease of venture investments in digital health, down 40% in the first half of 2022 compared to the same period the year before, according to CB Insights data. A whopping 23 companies left the market in 2021 with none going public in the first half of 2022, revealed a Rock Health report.
The downturn seems to stop short of General Catalyst.
“We have a great deal of respect for the other health systems that have formed partnerships with General Catalyst,” Gapstur said. “All of those are health systems that have done a significant amount of working thinking about the different challenges that healthcare faces and we look forward to the opportunity to really work with these other change-makers to make healthcare better for everyone.”
WellSpan is considering partnerships with other companies within the General Catalyst roster and imagining entirely new companies that could be born out of their collaboration.