General Catalyst is a VC firm that invests in powerful and positive change that endures for entrepreneurs, investors, people, and society. And the firm supports founders with a long-term view who challenge the status quo, partnering with them from seed to growth stage and beyond. At the recent HLTH event, General Catalyst announced the launch of a new healthcare company owned and operated by the firm. This marked the emergence of Health Assurance Transformation Corporation (HATCo) from stealth, intending to acquire an existing health system.
The company is going to be led by Dr. Marc Harrison, who will serve as CEO of HATCo. Harrison joined General Catalyst last year after working as Intermountain Health’s president and CEO. And the intent of HATCo is to acquire a health system. Throughout the acquisition and beyond, General Catalyst is focused on supporting the health system’s community and improving health equity and access. The new entity will work to share learnings and best practices with 20 existing health assurance partners that cover over 15% of the US population.
The company was launched out of General Catalyst’s CEO Hemant Taneja’s vision of Health Assurance: the mission to make the healthcare system more proactive, affordable, and equitable.
Here is what Taneja and Dr. Harrison wrote in a company announcement:
HATCo’s charter is not to disrupt healthcare systems; rather, it is to be in service of healthcare organizations everywhere to change how they deliver a fundamentally better experience for consumers – and to prove the transformative effect of a true partnership between technologists, caregivers and capital. It is our belief that by making these organizations more profitable, more vibrant and more innovative, they will be better equipped to serve everyone in their communities with greater impact.
There are 5 core principles that are foundational (and distinctive) to HATCo’s approach:
1.) A true alignment of stakeholder interests. You cannot build an enduring functional system where providers, patients, and the financial players (investors, insurance companies, government) are not aligned. HATCo will be purpose-built with the goal to ensure all the stakeholders are similarly incentivized (via a value-based care model) to improve access and outcomes and to make care more preventative and proactive.
2.) More ‘patient’ capital with decades-long time horizon. The transformation of our healthcare system is not a short-term endeavor. Even venture’s decade-long return horizons are insufficient to effect real, systemic change. HATCo aims to create a new standard of healthcare investing and set expectations for investors to think longer term.
3.) A reorientation around platform innovations. As we see it, one of the biggest challenges of the PE model in healthcare today is the maniacal focus on taking costs out of the system, leaving little incentive for investment of any kind. We believe it’s not about taking costs out as much as it is about putting technology and innovation in. Part of the HATCo plan will involve giving health systems the opportunity to capitalize on new revenue streams, which (in turn) should allow them to invest in more innovation and in servicing their communities. In addition, HATCo will look to foster the creation of scaled platforms (rather than fragmented point solutions) that can provide the missing technology pieces of the puzzle.
4.) A commitment to ‘radical collaboration.’ HATCo is committed to creating an open innovation platform. We plan to partner very closely with each of our 20+ healthcare system partners, openly sharing best practices, new technologies and a transformation playbook with those partners, who together cover over 15% of the US population. This represents a rare opportunity to demonstrate, replicate and scale best practices, while reducing the burden on individual health systems to develop their own bespoke transformation assets.
5.) A decisive pivot to value-based care – As we’ve said, a shift to value-based care is an essential part of our approach. HATCo intends to work with the ecosystem to demonstrate that a model that is better for patients can also be good for business. The board and leadership team of HATCo bring the kind of experience and expertise we believe is required for driving value at scale, digital transformation, and healthcare financing. The hope is that over time and together, HATCo and the HA ecosystem will help deliver a far better experience than consumers experience today.
