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The $157 million Heritage Healthcare Innovation Fund Identifies and Invests to Deliver Improved Quality, Service and Efficiency for Healthcare Delivery

The Heritage Group announced yesterday the official closing of the Heritage Healthcare Innovation Fund L.P. at $157 million, as well as consummation of its first two investments. The strategic fund was launched in January 2011. These strategic limited partners, in addition to their capital, provide unique origination and evaluation contacts, as well as the potential for commercial benefits to portfolio companies.

Paul Wallace, Heritage Group Managing Director, said:

“The Fund’s mix of limited partners, which include some of the nation’s leading hospital systems and healthcare companies across many sectors, reflects where healthcare is headed: towards a more collaborative approach to the delivery of care.”

Mark Blake, EVP Strategy and Corporate Development, Cardinal Health, said:

“With healthcare reform driving towards the three pillars of access, quality and cost, leaders from all sectors of the industry are recognizing that we need new, creative solutions. What attracted us to the Fund was the philosophy that collaboration is the key to innovation. Heritage has brought together a powerful ecosystem of providers, service companies and entrepreneurs and helped to organize us around the toughest challenges. We’re already seeing the strategic benefits of the network.”

The Heritage Healthcare Innovation Fund was developed to:

  • Identify and finance innovative businesses that deliver improved quality, service and efficiency for healthcare delivery;
  • Develop “purpose-built” companies specifically focused on solving problems that are identified by the investors, particularly issues driven by healthcare reform;
  • Allow the investors the opportunity to benefit from the commercialization of innovative solutions they have developed internally through the development and launch of new companies; and
  • Make individual investments of up to $15 million in early and growth-stage healthcare businesses.

Healthcare reform driving towards the three pillars of access, quality and cost

Combine these three pillars with the fund’s philosophy of collaboration being key to innovation, and social technologies can be both enablers or accelerators or means of the healthcare solution itself. “Purpose-built” companies fit with outside-in thinking, customer centricity and market-drivenness.

Approaches like remote monitoring, eHealth, social media and gaming promote wellness and facilitate accountable care and new business models.