Commonwealth Care Alliance President and CEO Chris Palmieri says healthcare organizations need to look to private capital to support innovation, especially as they use new technology to address key care gaps.
With many healthcare organizations struggling to stay in the black, the idea of raising private capital to spend on innovation seems outlandish.
Chris Palmieri, president and CEO of the Commonwealth Care Alliance and founder of the CCA’s healthcare innovation accelerator, Winter Street Ventures, begs to differ.
“Private capital has proven able to able to improve care delivery and efficiency in ways that can serve patients and the broader healthcare system also in a positive way,” he says in this week’s HealthLeaders podcast.
With the Steward Health collapse and disruptors like Walgreens and Walmart retreating from the primary care space, hospitals and health systems are giving more thought to how they raise capital to address care gaps. Palmieri says state and federal governments might step in to improve oversight of deal-making, but that won’t stop forward-thinking health systems and hospitals from pursuing partnerships.
“Private capital is a critical point of any innovation lifecycle,” he says.
Primary care may be “a necessary and fertile access point for healthcare,” Palmieri says, but that doesn’t necessarily translate into scalability and success for either healthcare organizations or private capital. As proven by the struggles of disruptors to gain traction in the space, no one has a good model. To crack that code, he says, investors and health systems “need a different way to think about making investments.”
A key factor for hospitals and health systems is the alignment of goals. What’s the organization’s underlying reason for bringing in private capital? Will it affect the organization’s culture or its goal of value-based care? Are long-term objectives clear and attainable? And what happens when the organization faces headwinds?
With primary care such an uncertain landscape, Palmieri says investment dollars are going into programs that address access to care, particularly for underserved populations. In addition, he says, there’s interest around programs and platforms that combine primary care with other services, such as those that address social determinants of health.
In addition, many healthcare organizations and investment companies are targeting the behavioral health space, including substance abuse treatment. And with the number of people over age 65 expected to eclipse the number of people under age 18 by 2030, there’s a lot of interest in the growing senior care market.
“Our [healthcare] system today is not built for this demographic shift,” Palmieri says.
Palmieri says the rise of consumer-focused healthcare is greatly impacting senior care, as seniors are finding their voice and asking for services that help them stay at home longer and away from assisted living. They’re the ones driving innovation in programs and tools that deliver care to patients when and where they prefer.
“The future of healthcare is going to be about the people who need and use the services, not the people who provide those services,” he points out.
Eric Wicklund is the associate content manager and senior editor for Innovation at HealthLeaders.
KEY TAKEAWAYS
This week’s HealthLeaders podcast focuses on the M&A landscape, and how health systems and hospitals need to look outside the box to secure funding for innovation.
CCA President and CEO Chris Palmieri says investment funding is now focused on finding new ways to access care, as well as the growing behavioral health and senior care markets.