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Q&A with Andy Slavitt on investing in underserved populations

"Medicaid is filled with success stories, but not the capital," Slavitt says.

Susan Morse, Managing Editor

The Medicaid Transformation Project is led by AVIA, a network for health systems, and Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid Services and founder and general partner of Town Hall Ventures.

Both the MTP and Town Hall Ventures seek to improve the health of underserved populations, the first through the collaboration of health systems  and the second through venture capital investments.

Q. Could you please describe Town Hall Ventures' involvement with the Medicaid Transformation Project's Behavioral Health Initiative?

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A. The Medicaid Transformation Project, led by myself and AVIA, aims to transform the way care is delivered to underserved populations and in this case, making significant improvements to how we diagnose and treat mental illness in our communities. Since leaving government, I founded Town Hall Ventures, a venture capital firm devoted to investing in and supporting entrepreneurs who are improving the health of underserved populations. Town Hall Ventures is working with the participants in MTP to identify capabilities that are desired but need further investment. Town Hall Ventures has already identified one such opportunity -- and that is in providing better collaborative care with primary care and mental health. Town Hall has made a recent investment in Concert Health, which is one of a dozen solutions MTP participants will review and roll out.

Q. What has the interest been like from healthcare technology and other companies in trying to find a solution to help health systems solve behavioral health issues?

A. For entrepreneurs who like to solve big problems, mental health is a very attractive area. Their opportunity with MTP is to make those solutions work at scale. From our experience, entrepreneurs are very eager to jump in and tackle this problem. One challenging part is finding the right balance between high-touch care models and technology. Technology allows patients to access treatment/services from a variety of settings and helps to bridge the workforce supply gap that especially impacts people in rural areas. At the same time, we know that some patients in this population need more services and wrap-around support. Health systems are looking for solutions that can provide both scale and quality and that can be easily incorporated into their existing workflows and processes. We have started to see much more progress/ momentum over the past 1-2 years including some interesting partnerships between health systems, state government, and companies.

Q. Can you give any numbers on the amount of investment Town Hall Ventures expects to add to the project?

A. Town Hall Ventures does not make any direct investments in the Medicaid Transformation Project. Town Hall will, as with Concert Health, commit capital to solutions that are identified by MTP participants as core needs, and has the capacity to make significant investments in this area and attract other investors as well.

Q.  As the former head of CMS, you've seen different initiatives to transform healthcare. What in your opinion is needed to make the Medicaid Transformation Project's initiative work?

A. CMS can make the conditions for solving these problems ripe-- by calling attention to the problems, by changing payment models, and by continually learning and adapting, but that's only part of the equation. Likewise, entrepreneurs can play an opportune role. Every problem in healthcare has likely been solved once, but at small scale and without the ability to repeat the success. Medicaid is filled with success stories, but not the capital; entrepreneurs and broad participation are needed. So what makes the Medicaid Transformation Project special is it creates a whole ecosystem to implement and learn from innovation, hand in hand with policymakers and entrepreneurs. Large scale change in dozens of communities has never happened before and that's what this effort aims to change.

Q. And finally, can you please say how Town Hall Ventures is going a year after its launch? The last time we spoke in May 2018, you, Trevor and David had just announced the initiative.

A. Incredibly well. We have made a lot of progress since last May. In September, we closed our debut fund with $115 million and since then have made a series of investments in companies transforming care delivery for underserved and medically vulnerable populations including social interventions, complex population management, value-based care, and behavioral health. Some of our investments have already begun to make major changes to how healthcare works like -- Cityblock Health, Unite Us, Landmark Health, Wellbe Health and soon to be announced companies focused on maternal health and on addiction in underserved communities.

Twitter: @SusanJMorse
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