Former CMS head launches new health care venture fund

While most health investors focus on innovations for well-to-do populations, the new venture will focus on health problems that accompany poverty.

The new venture will focus on developing solutions for the health problems that most often accompany poverty, such as opioid addiction and mental health disorders. (Photo: David Paul Morris/Bloomberg)

Andy Slavitt, the Obama-era administrator for the Center for Medicare and Medicaid Services, announced Tuesday that he is starting a venture capital firm aimed at “investing in the most vulnerable Americans.”

The new firm, Town Hall Ventures, pays homage to the town hall meetings that Slavitt held throughout the country amidst Republican attempts last year to dismantle the Affordable Care Act.

Slavitt has not yet highlighted any specific investments, but has said that he wants to focus on businesses developing solutions for the health problems that most often accompany poverty, such as opioid addiction, mental health disorders and the many health complications that result from lack of proper prenatal or maternity care.

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TechCrunch speculates that the new firm appears to be a spin-off from existing venture capital firm, Oxeon Partners, which specializes in health care investments. Indeed, the CEO of Oxeon, Trevor Price, released a statement describing the mission of the new company.

“We believe we will see more entrepreneurs whose missions are to serve the tens of millions of people whose lives can be improved by innovations that allow them to receive the absolute best quality of care, whether being treated at home and/or in other comfortable and low-cost settings,”  he says.

Slavitt and Price say that their approach contrasts with that of most other health care investors, who focus on innovations for well-to-do populations, such as wellness apps or expensive prescription drugs.

“We’re looking to get away from the 35-year-old white guy theory of investing,” Slavitt tells CNBC.

One of the company’s first investments is in CityBlock, a health care startup aiming to create neighborhood hubs where low-income people can access basic medical services.

Slavitt founded a health tech firm, Health Allies, in 1999 and sold it to UnitedHealth, where he later worked in a number of executive roles. He eventually led Optum, a UnitedHealth subsidiary focused on health tech. Optum was hired by the Obama administration after the rollout of the ACA marketplace was beset with technical problems; Slavitt was credited for helping to get the exchange on steady ground again.

In 2015, Slavitt left his job at Optum to become interim administrator of CMS. Over the next two years, Slavitt sought to stabilize the ACA marketplace by implementing rules aimed at getting more young, healthy people to sign up for plans. The Obama administration repeatedly raised the fine for not carrying insurance as well as increased marketing efforts for ACA plans.