Through Advocate Aurora Enterprises, the network of 26 hospitals aims to invest in healthcare companies with an emphasis on enabling people to age independently. Assisting parents in raising children and assisting people in achieving goals related to body, mind, and nutrition.
“There is a financial diversification component to this, but perhaps more strategically important to us is the ability to affect a person’s overall health,” said Scott Powder, president of the division.
A number of major health systems, including Northwell Health and the University of Pittsburgh Medical Center, have pursued similar diversification strategies. For example, the OSF HealthCare investment arm in Peoria supports medical technology companies and a telepsychiatry provider.
Unlike some healthcare system investors who operate like venture capital or private equity firms, Advocate Aurora Enterprises is not looking for a quick exit, said Powder, who was previously the healthcare system’s chief strategy officer.
“We invest in companies that we believe will help us over the long term,” said Powder. “We have to contribute to the financial health of the organization over time, of course, but we don’t have this exit mentality.”
The subsidiary’s first investment is in San Francisco-based Foodsmart, which provides nutritional advice and other digital services to make it easier for people to eat well on a budget. Foodsmart raised $ 25 million in an Advocate Aurora Enterprises-led series funding round. C. Powder, who will join the Foodsmart board of directors, declined to say exactly how much Advocate Aurora invested.
“We have 3 million people in any given year and there is no one who would not benefit from this type of service,” said Powder. “As the national leader in value-based care, at least half of these people have some financial risk to their general health, so it becomes a really powerful tool there.”
Advocate Aurora Health’s sales in 2020 rose 2.5 percent year over year to $ 13.1 billion, according to a recently released financial file. Net income fell 62 percent to $ 558 million.