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Heritage Healthcare Innovation Fund launches in N'ville
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Private-equity investors Rock Morphis and David McClellan yesterday announced their Heritage Group will manage Heritage Healthcare Innovation Fund, backed by major hospital companies.

Word of the strategic venture fund, which targets early- and growth-stage companies, comes weeks after VNC reported Morphis and allies' raising funds for Precedent Health, which has a mission congruent with innovating new solutions and improving delivery of healthcare services. The new fund should "unite exciting ideas with the capital necessary to deliver practical solutions," according to a Heritage release.

Affiliates of Community Health Systems, Iowa Health System, LifePoint Hospitals, Trinity Health (Catholic) and Vanguard Health Systems are each limited partners in the fund. LifePoint's chairman, Bill Carpenter, is also chairman of the Federation of American Hospitals, the investor-owned hospital association.

"We are confident the Heritage Group team will be excellent managers of the fund," said Vanguard chairman and CEO Charlie Martin. "They are experienced healthcare entrepreneurs, operators and investors and bring a blend of essential skills and experience to their management of the Fund."

The new fund is "designed to create a close working relationship with innovators, offering them real-time feedback and mentoring to develop truly practical solutions to the real challenges we face today," Trinity CEO Joseph Swedish said in the Heritage release. Heritage said its new fund aims to (quoting):

• Seek, fund and mentor innovative businesses that deliver improved quality, service and efficiency for health care delivery systems;
• Develop "purpose-built" companies specifically focused on solving problems that are identified by hospitals and which are broadly applicable to health care delivery systems, particularly issues borne of health care reform;
• Allow health care delivery systems 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 $10 million in early- and growth-stage health care businesses.

CHS CEO Wayne Smith said in the release, "This fund allows our industry to champion real and practical innovation that will improve the quality of care, service and efficiency." VNC

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Tags: Charles Martin, Community Health Systems, early-stage, growth, healtcare, health IT, Heritage Group, Heritage Healthcare Innovation Fund, innovation, investment, Iowa Health System, LifePoint Hospitals, Precedent Health, private equity, reform, Rock Morphis, Trinity Health, Vanguard Health Systems, Wayne Smith

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