Catholic Health Initiatives is forming a venture capital group based at the system's Englewood, Colo., headquarters to identify partnerships, investment opportunities and growth strategies that advance CHI's mission of improving health care delivery. Over the next five-plus years, the group will build a portfolio potentially valued up to about $200 million.
CHI has named Nick Barto managing director of the venture capital group, a team that could grow to about eight associates within the year, with most of these associates full-time and some part-time. Barto said the group will focus on using CHI investments to develop deep expertise in corporate support services that improve how CHI facilities deliver health care. These services likely will relate to revenue cycle, supply chain, information technology, clinical engineering and managed care payer strategies, Barto said. He noted that clinical engineering has to do with the clinical equipment and supplies medical facilities use; and managed care payer strategies have to do with analyzing the health of populations of people and evaluating risk levels for them.
Barto said the venture capital group's investments will help enable CHI to evolve its capabilities "as health care transforms from a fee-for-service to a risk-sharing" model. For instance, investments in information technology companies with expertise in data mining will help CHI improve its ability to analyze health needs in the communities it serves and to determine how to respond to those needs.
The CHI group will invest both in the system's internal units and in outside companies, particularly early-stage companies needing capital. CHI already invests in the Ascension Health Ventures capital firm through another CHI unit; and the new venture capital unit could invest in similar enterprises, Barto said.
CHI's size, scope and geographic diversity will help make it relevant to the companies the venture group will be investing in, said Barto, and so CHI should gain, through its investments, a greater ability to shape these companies' work and products. CHI operates 76 hospitals and 40 long-term care facilities in 19 states.
Prior to his CHI appointment, Barto was senior vice president for financial planning and analysis at Novant Health of Winston-Salem, N.C.