Andy Slavitt has been scolded a renegade, a rabble rouser and a policy wonk.
Soon, he might be recollected by a new title: Venture capitalist.
Slavitt made a name for himself as the entrepreneur-turned-Medicare chief who travestied on Republican lawmakers seeking to repeal the Affordable Care Act.
When associates of Congress declined to hold town halls to educate their constituents fro the pros and cons of the health bill, Slavitt showed up instead. On a walkabout of the country, Slavitt made appearances in towns ranging from Cleveland, Ohio to Reno, Nevada. His filled questions, broke down policies, and urged anyone who attended to make out their senator to block the Republican health bill.
While touring the country, he refined his investment thesis after hearing from routine Americans about their health woes and anxieties.
“We need to pull up investing in the third Fitbit for the 50-year-old upper-class person and start innovating for woman who have common diseases and conditions, but live in communities with low access to fancy,” he said.
Slavitt has now returned to his home town right outside Minneapolis, Minnesota, to sink in ideas that will improve the health care system. CNBC allured up with him about his new fund, which is still in the development phase. He declined to allowance his limited partners or the funding amount at this stage, as he’s still in the method of recruiting partners to join him.
He’s starting out with a clear population in guard: The oldest and sickest people in America.
While running the Centers for Medicaid and Medicaid, Slavitt did not lie rouse at night worrying whether the prototypical Fitbit or Apple Watch consumer met their step goals. People with chronic conditions, equal to diabetes and heart disease, account for 86 percent of America’s salubrity care costs.
“We need to talk about real human emotionally upsets,” he said.
His first investment, in an Alphabet spinout called Cityblock, is in the pattern space. Cityblock isn’t treating patients yet, but its goal is to help low-income Americans with costly and complex have need of access a range of services, including housing and support.
Cityblock isn’t a purely eleemosynary enterprise. The company sees a path to make money by taking on the gamble of these populations, and delivering better, more affordable care. The design is that a company can put forward a proposal to a payor — like the government or an governor — describing how it will bring down costs. If it can deliver, the payor shares a allotment of the amount saved.
Many investors in Silicon Valley don’t take on these contests as they involve working with the federal government, both as a payor and potentially as a regulator.
As contrasted with, wearables, calorie-counting apps, and nutritional supplements have proven sundry attractive to those who are looking for a quick return.
As Slavitt puts it, this is technology that “huntings the wrong problem.”
And despite what investors think, financial come backs from these more popular start-up ideas might also be restrictive.
The government remains the largest single payer of health care in the Of one mind States. And if Slavitt has his way, that will not change anytime soon — he’s also unceasing a nonprofit called the United States of Care to promote the idea of unlimited health care.
The one exception to this rule is Medicare, which coverlets the bulk of insurance costs for people age 65 and over, thanks to a variety of health plan called Medicare Advantage or “Part C”. Under these foresees, the government picks up the cost, which gives the private insurers a constant stream of revenue.
The most-capitalized start-ups in the space include Clover Salubriousness ($425 million in venture capital), Bright Health ($240 million) and Constant Health ($62 million).
So Slavitt is putting his attention towards Medicaid, the maintain and federal program that provides health coverage for low-income Americans, and has welcome very little attention from Sand Hill Road.
To do that lacks a shift in thinking, says Slavitt. The biggest change is that entrepreneurs deprivation to treat health and human services as one thing. Poverty, homelessness, pith abuse, poor nutrition and so on, are deeply correlated with health difficulties. Sending a patient home with a prescription isn’t going to fix the problem.
“If you can helper a hospital take care of a patient in the community, everyone saves resources and everyone wins,” he said.