In the past decade, large health systems such as Mayo Clinic, Kaiser Permanente and Ascension have been launching internal investment funds to support health startups transform care delivery. Penn Medicine joined the party last August when it launched the Penn Medicine-Wharton Fund for Health in collaboration with the Wharton Social Impact initiative, the University of Pennsylvania business school’s effort to increase social change in business.
The Penn Medicine-Wharton Fund for Health was established to invest in early-stage companies that are seeking to positively impact social determinants of health within and around Philadelphia. It is also meant to provide experiential learning opportunities in impact investing for University of Pennsylvania students, according to Brandon Grant, the fund’s co-director.
In Grant’s view, the investment fund differentiates itself from those of other health systems because its investment thesis is entirely focused on improving the community’s social determinants of health. He said the fund is also unique because its investment team is made up of University of Pennsylvania students who span various disciplines. They are tasked with sourcing companies and conducting due diligence on them.
Fabric Health is one of the companies these students recently selected for investment. The startup works with laundromats and partners with health plans to increase healthcare access for low-income communities. The startup is based in Philadelphia but also operates in Pittsburgh and Washington, D.C.
“Understanding that access to healthcare is a huge barrier to quality care is what led the fund to invest in Fabric Health’s innovative approach,” Grant said. “Their solution of reducing barriers to quality care by having team members work with health insurance companies to provide a variety of screenings and preventive care while people wait for their clothes to wash and dry was very appealing.”
Stimulus is the other company the fund recently invested in. The Philadelphia-based startup sells software to physician practices to help them make their purchasing process more transparent and efficient. Grant said the fund was attracted to the company because it seeks to restructure the flow of capital and direct contracts to underserved communities through inclusionary procurement and sourcing decisions.
The other four companies the Penn Medicine-Wharton Fund for Health has previously invested include: Uptrust, a customer relationship management tool to help people stay out of the criminal justice system; Kinvolved, which is developing communications software to decrease absenteeism in underserved schools; RecoveryLink, a telehealth platform seeking to increase access to substance use recovery and peer support services; and Lula, a delivery solution for convenience stores.
The fund’s investments in Fabric Health and Stimulus make up 37% of the total dollars it has invested since inception — 1.35 million. The plan is for the fund to invest up to $5 million over three years, Grant said.
The work the Penn Medicine-Wharton Fund for Health is doing to alleviate health disparities in Philadelphia has caught the attention of some external investors as well. For example, Josh Harris, the Philadelphia 76ers’ managing partner, said in June that he and his wife Marjorie will invest $1 million of their own into the companies the fund selects.
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