Andy Slavitt forms Town Hall Ventures with focus on 'most vulnerable populations'
LAS VEGAS — Former CMS Administrator Andy Slavitt told HLTH 2018 on Tuesday he is helping form a venture capital firm to focus on building companies intent on changing care delivery models for America's "most vulnerable populations."
"If we spend the next decade increasing our impression in primary care, mental health, drug treatment, healthy children, is there any doubt whatsoever we would have a healthier country and build some great companies in the process?” Slavitt said during a fireside chat at the conference.
Slavitt is partnering with Oxeon Holdings founder Trevor Price and Oxeon Ventures Managing General Partner David Whelan in creating the firm, Town Hall Ventures. They hope that through building companies focused on more vulnerable populations like those in Medicare and Medicaid, the healthcare industry can better serve patients.
Since he exited CMS, Slavitt has been on a campaign to give voice to patient issues and address their access to healthcare services. He recently became chair of a new coalition called United States of Care, which has partnered with the Penn Leonard Davis Institute of Health Economics to research policies to expand health coverage.
So far, the industry is not "killing it," Slavitt said at HLTH. "Healthcare experience with people today in this country ... is no better and arguably worse than it was 10 years ago. It's more complicated, more expensive, less integrated [and] less coordinated."
The Medicare and Medicaid population includes 120 million people and contributes about $1.2 trillion to the country's healthcare costs.
“As a nation we have significant healthcare infrastructure serving healthy populations while lower-income communities go underserved, leading to vastly poorer health outcomes,” Slavitt said. “We are at the beginning of a wave of innovation serving Medicare and Medicaid populations. The answers are not always traditional. They involve investments in underlying systemic issues as well as innovative approaches that improve people’s health and well-being.”
Whether it's an idea scribbled on a napkin or a more developed approach, Slavitt said his team is looking to help build cultures, sales relationships, and rules and regulations, if necessary, at companies that are tech-savvy as well as mission-driven.
"75% of the largest health insurance population in the county ... are now in business directly with managed care plans who are capitated and have incentive to drive cost down," Slavitt said. "Generally speaking, when a Medicaid patient is admitted to the hospital, the hospital loses money. One great secret for CFOs is the way to make more money [is to] lose less money."
Keeping patients out of the hospital is a great investment, he said. This can be done through varied means like addressing food insecurity or transportation to care services.
Town Hall Ventures' first investments include Cityblock, Somatus, Welbe Health and Aetion.
Cityblock, built in partnership with Alphabet’s Sidewalk Labs, provides primary care and behavioral health to address unmet health and social needs in urban populations. Somatus focuses on new models of care for chronic kidney patients while Welbe provides medical and social services to PACE-eligible seniors. Aetion provides payers and pharma companies with analytics and evidence to understand how drugs work in the real world to assist value-based care.
While social determinants of health may be in vogue right now, many in the industry haven't come up with a standard definition of what it means and what it means for their business.
To that, Slavitt said the industry must be careful. "I encourage people to ... come up with ideas how to solve [social determinants of health]. To turn them into models before we understand them kind of scares me," he said.
The good news, he said, is the industry doesn't have to create new sciences for this, but rather will have to better understand people's lives. It's tempting to be dismissive of nontraditional companies entering the healthcare space, but that might not be the right approach.
Their energy and focus could be leveraged in healthcare, he said. In addition to Somalus and Cityblock, Slavitt ended his HLTH discussion by name-checking Oak Street Health, Landmark Health, One Medical and ChenMed as "inspiring" mission-driven healthcare companies.
"Unless you think the incumbents are killing it, then we ought to welcome these folks in," Slavitt said.
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