Giving Compass' Take:

• The California Health Care Foundation is helping bridge the innovation gap by connecting investors and entrepreneurs with safety-net health care providers serving marginalized communities. 

• What are the specific challenges for entrepreneurs to invest in safety net health care? 

• Read about this guide to impact investing. 

Despite being the nation's largest health insurer, Medicaid remains largely overlooked by investors and entrepreneurs, who typically focus on developing solutions for private and commercial customers. To improve both access to health care and the value of that care, the California Health Care Foundation is working to make the case for why entrepreneurial companies and investors should consider the safety net as a tremendous health care market that is a ripe opportunity for innovation. Their story is a compelling reminder of all of the ways foundations can influence systems to improve health.

The California Health Care Foundation (CHCF) has a history of thinking about entrepreneurship as a means to create positive change. Located in Oakland, California, they are deeply immersed in the entrepreneurial culture of the Bay Area. Since 2008, CHCF has made investments in companies that can improve access to care or quality of care for the state’s most vulnerable populations. CHCF’s investment in Omada Health, for example, supports a pilot diabetes prevention program serving the Medicaid population.

However, as CHCF’s Health Innovation Fund team reflected on their work, they saw an opportunity to effect change beyond their own investments and grants by encouraging more entrepreneurs and investors to invest in solutions that improve health care for marginalized communities.

CHCF realized that they were well-positioned to serve as an effective bridge between two stakeholders that usually don’t interact with one another—entrepreneurs looking to create the next breakthrough in health care and safety net health care providers serving low-income, marginalized populations.

CHCF has strong connections with individuals who work in the federally-qualified health centers, public hospitals, and Medicaid insurance providers. These networks give them insight into the actual challenges that health care providers and insurance companies face in caring for Medicaid enrollees, including addressing the many social factors that affect their health outcomes. The CHCF Health Innovation Fund team also speaks the language of technology and investment and has robust networks among Silicon Valley’s tech companies and venture capital firms.

Bridging this gap provides an opportunity to shift some of the energy of the private sector toward solving challenges for the most vulnerable. The appeal to entrepreneurs is that if they can make a product work in the safety net—with its unique needs related to language barriers, limited time for patient visits, and constrained staff and facilities resources—it will likely also be applicable to the market overall.

Read the full article about impact investment partnerships in health care by Lauren A. Smith at FSG.