LAS VEGAS—General Catalyst announced this morning that it has tripled its number of health system partners to a total of 15 with new names including Banner Health, Universal Health Services and the Medical University of South Carolina Health (MUSC Health).
The Cambridge, Massachusetts-based investment firm has been racking up a cadre of provider partners since an August 2021 deal with hospital chain HCA Healthcare.
The goal is to give the systems a bridge to General Catalyst’s digital health portfolio companies—its so-called “health assurance” network—for potential pilots, deployments or co-development opportunities that could improve the health of their patient populations.
“Venture capital is continuing to play a larger role in the healthcare industry, and this collaboration will bring together the collective wisdom and expertise of its members and General Catalyst so that, together, we can move faster and more effectively toward digitally-enabled and patient and family-centered care as the norm in the U.S.," MUSC Health CEO Patrick Cawley, M.D., said in a statement.
Other new partners announced at this week’s HLTH conference include Cincinnati Children’s Hospital Medical Center, Hackensack Meridian Health, Health First, OhioHealth, the Medical University of South Carolina, UC Davis Health and UCI Health.
The 10 systems join five existing provider partners such as Jefferson Health, Intermountain Healthcare, WellSpan Health and the United Kingdom’s Guy’s and St Thomas’ NHS Foundation Trust.
The full roster offers General Catalysts’ digital health companies a broad swath of provider characteristics to work with—urban, rural, academic, safety-net, public, acute, behavioral and children’s hospitals. They collectively care for roughly 10% of the U.S. population across 43 states.
Statements from the partners highlighted proactive prevention, new care models, accessibility, health equity and efficiency as potential focus areas for innovation. The partnership arrangements also bring new avenues for direct, system-to-system collaborations.
"Our most important mission and focus is on continually improving the wellness of the customers we serve, and this partnership will enable the collegial sharing of information and best practices that will allow us all to create stronger and healthier communities," Health First Chief Strategy Officer Drew Rector said in a statement.
"An outpouring of interest and engagement"
General Catalyst had been loosely targeting a total of 10 health system partners by the end of the calendar year. Daryl Tol, head of the firm’s health assurance ecosystem, said that today's larger-than-anticipated tally reflects a shared vision for innovation across the hospital sector.
“When choosing which organizations to partner with, our mindset is to be very selective and source opportunities that we hope will bring open collaboration,” he told Fierce Healthcare. “We received an outpouring of interest and engagement from really mission-driven, innovative health systems, which is what kept our number growing. Health systems have been challenged in the past few years, and there is a lot of excitement for fresh eyes, new solutions and empowerment that we believe will stem from our work together.”
General Catalyst’s deals come in the wake of a $670 million close for its Health Assurance Fund II, which brought its total investments for the partnership network to $1.7 billion.
It’s also been courting hospital and health system executives to get a better understanding of the challenges large organizations face when implementing new technologies.
Tol, for instance, was the former president of Advent Health before joining General Catalyst in July. Marc Harrison, M.D., until recently the president and CEO of Intermountain, came on to lead the health assurance team a few months back while Stephen Klasko, M.D., the former CEO of Jefferson Health, took on an advisory role earlier in the year.
“Our former executive experience allows us to see both sides of the coin and work to remove the barriers that exist between health systems and innovative emerging companies,” Tol explained.
“We are better partners to the portfolio companies in our health assurance ecosystem because we can share guidance on how to accommodate health systems and deliver game-changing solutions successfully. In terms of dealmaking, we are attuned to health system needs and avenues for change, and as such, we hope to be able to identify companies that are best equipped for health system success and can be scaled or shifted to address additional needs,” he said.
General Catalyst’s collaborative approach received warm praise earlier in the week from its first partner.
Speaking in a keynote interview with General Catalyst CEO Hemant Taneja, HCA Healthcare CEO Same Hazen said his 185-hospital chain recognizes the need for outside innovators to have an inside look at a hospital’s operations before trying to implement new technologies. These external partners, he said, have helped behemoth systems accelerate their care transformation agendas and tackle pain points within the system.
“They’re finding a lot of opportunities even at our company—and we’re pretty high-performing across most dimensions,” Hazen said Sunday. “But our processes are way too inconsistent, and I think that variation is the frustration that all of our patients have, our physicians have, we have.”
Tol was similarly positive on the HCA partnership, noting that the initial experience served to refine General Catalyst’s approach and whet its appetite for additional health system partners.
“Being able to cultivate change, see tangible impact and build strong connections between HCA and our health assurance ecosystem has made us eager to identify other communities that we hope can benefit from the same level of open innovation,” Tol said. “While we will have more insights to share in regards to outcomes in 2023, I can say that we have been focusing on building out provider and staff engagement capabilities and working toward improving the integration of capabilities in order to grow seamlessness and ease of use.”