Hemant Taneja, CEO and managing director of venture capital firm General Catalyst, and Dr. Marc Harrison, former CEO of Intermountain Health, announced the formation of a new business venture owned by General Catalyst dubbed the Health Assurance Transformation Corporation (HATCo) that will see Harrison as its CEO.
The pair also announced the intent to buy a health system that will put technology at the forefront of healthcare prevention and delivery and will run through a value-based care model.
HATCo comprises 20 health systems plus a large payer, which accounts for about 15% of healthcare revenue and is in 43 states and four countries, Harrison said.
“We have a huge scale to work with in terms of sandboxes to begin to try some of our health solutions,” relayed Harrison. “Hamant and his team at General Catalyst have assembled more than 150 digital health companies. They serve as substrates for us to use to transform this health system. They will be separate from HATCo but aligned and connected and will work with other companies outside of the General Catalyst portfolio companies.”
To help health systems transform, Harrison said they need to be able to provide affordable, unique advisory services.
“The biggest announcement is we’re getting into the delivery system, and we’re buying a health system,” Harrison said. “We are very thoughtful about the sort of health system we want to work with. There will be more to come in the future, but let’s just say we need a proof of concept of this wild, radical transformation of what healthcare should look like in the United States and beyond, and the only way we can do it is to have our own system.”
Taneja said it is an unusual move for a venture capital firm, but it is necessary. It also forces the company to consider transcending its own business.
“First of all, if we have a health system we’re supporting, we have to think for the long-term. That’s a community we’re going to be serving on the ground.” Taneja said. “The other thing that’s important is we have to think about a horizon that generally isn’t in the context of venture capital firms.”
He said the hope is that the firm will provide a return for its investors in the short term.
The key, Taneja said, is all about partnerships, working closely around driving the levels of transformation in three key areas: 1) Leveraging technology to drive operating profit. 2) Transformation of the workforce. 3) Transforming care to be more proactive with revenue streams that can create additional profit for health systems.
“That can only be done with an unprecedented collaboration between technology companies that are driving these levers,” Taneja said. “A lot of what we’re working on at HATCo is going to be driving that ecosystem-to-ecosystem interaction.”
“Hamat and I believe it’s important this entity is in a for-profit model because we are unaware of an industry that has been able to completely transform without the impetus of capitalism behind it,” Harrison relayed. “You’ll need to watch us and hold us accountable, and we look forward to it.”
One of the key levers of the new company is a focus on value-based care.
“What we believe is we need to go from healthcare to health, and the best way to deliver health is to have all the incentives aligned between the payer and provider and, most importantly, between the clinicians and the patient and the way to do that in the purest form is to have a fully capitated model,” Harrison said. “Watch us as we deploy value-based healthcare at scale and in a very new way.”
The evolution depends on digital transformation, the partners said. Digital is a tool, not the be-all and end-all.
“We want to use technology in the best interest of humanity and deliver it holistically and humanistically by great clinicians,” Harrison said.
He relayed that by next year, HATCo will be delivering value across its ecosystem of partners and will have a health system that is beginning to contribute to the community.
“Part of our message to entrepreneurs in this ecosystem is to come collaborate with us because it’s not just General Catalyst companies that are going to be part of helping to drive this transformation,” Taneja said. “We actually need everybody to be rowing in the same direction.”
“I firmly believe that the model that we’re proposing, this value-based model where people get to spend their time in a meaningful fashion, taking care of patients for the right reason at the right time, I think that’s the people unlock for a much more sustainable health system going forward,” Harrison said.
“From a technology unlock perspective, we’re all in some ways very fortunate with this whole advancement in generative AI if you think about what that technology is capable of,” Taneja said. “Our belief is that if we can create augmentation of the healthcare workforce because it’s all heavily burned out and we’re very short-staffed in the industry, we can deeply transform how we deliver care.”
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