Ezekiel Emanuel chairs the department of medical ethics and health policy at the University of Pennsylvania. He started the bioethics department at the National Institutes of Health, helped shape U.S. health-care policy as a senior aide in the Obama administration, served on President Joe Biden’s COVID-19 task force, and advocates for plans to extend medical care for more Americans.
It doesn’t say so in his Penn resume, but Emanuel is also a venture capitalist, betting on health-care technology start-ups as a venture partner at Oak HC/FT (Health Care/Financial Technology), based in Connecticut. Oak invests for clients including the Pennsylvania teachers’ pension fund, PSERS.
The Inquirer asked Emanuel how he seeks to balance public and private interests. His responses are edited for clarity and length:
How did you, a medical ethicist, oncologist, and policy advocate who lectures on right and wrong, end up as a part-time venture capitalist?
When I left government in 2011, I had lots of offers to join boards and companies. At the time, I said no. I continued to try to get the administration to be more aggressive on payment reform and health-care delivery system reform.
That’s the way I think about the world — when you spend $4 trillion on health care, and its price is going up faster than inflation, it ends up sucking money from many other things. That’s the point I’ve been making for 20 years.
[The Trump] administration wanted to “repeal and replace” [Barack Obama’s insurance programs], but they never did come up with the “replace.” And I realized that transformation can come from only one place: the private sector.
So I joined Oak in 2017. I had for many years a friendship with Ann Lamont, one of the founders. Her fund had a philosophy: to improve medical care quality, improve the patient experience, reduce costs, transform the payment and delivery system. And no investments in drug companies or device companies. That corresponded to my philosophy.
When I looked at some of their investments — Aspire Health for end-of-life care, VillageMD, which [acquires] primary care medical practices, Quartet Health for mental health care — they were supporting transformation of things that had long been backwaters of health care. My writings supported more mental health care and more primary care and better end-of-life care. And now, here were companies trying to do these transformative things.
As an academic and policymaker, you focused on cost savings. But as an investor, you have to look for high-profit margins. Doesn’t that mean high prices?
I didn’t see it as opposite. It was a different mechanism to try to transform the health-care system when I anticipated government wasn’t going to be an active agent of transformation.
At Oak, I am a venture partner. [Unlike Lamont and other general partners], I don’t make investment decisions. I am on a couple of the company boards, and I ask questions: How do I think the government is moving in this company’s direction? Is it a direction doctors will want to take? Is it going to transform, for example, the oncology experience?
How does a venture capitalist, making money for himself and his investors, see health care differently from a doctor who’s charged with patient care?
At Oak, I’ve learned a lot about people who have to make [payment] decisions — insurers and hospitals. How do you get the institutions, and the doctors, to adopt something novel? You can have a fantastic idea, but if no one is going to buy it, it’s not going to help anyone.
The market aspect is pivotal. I’ll be honest: as an academic, as a policy guy, I had not paid any attention to that. To my detriment. A lot of government experiments with payments are going nowhere because they haven’t thought out the dynamics.
I am a breast oncologist. I have some insight into how doctors are going to react to proposals. [As a venture capitalist], I can see better what hospitals are going to buy. I was on the phone just today with [health insurer] Humana, and I saw how the market influenced their decision-making.
One of our problems as academics, we think we have a great idea, we do a demonstration project, and then it turns out it doesn’t scale [to handle more patients]. The private sector is good at scaling.
One Oak HC/FT company you invested in, you’re on the board of VillageMD, a Chicago firm that’s buying hundreds of doctors’ practices and consolidating them into the Walgreens drugstore chain. Walgreens last year promised to invest $5 billion in VillageMD. What brought you to that company?
Part of their goal is to put primary care doctors in underserved communities, so people can access care there, in New York City, in rural communities. That’s part of reaching the larger goals I am committed to. It’s an equity play. Not just, “Let’s take the money and run these in Lower Merion.”
You’re also on the board of OncoHealth (formerly Oncology Analytics), which collects data on cancer therapies and outcomes.
Right, they just launched Iris, a virtual patient navigation system that educates patients about potential side effects [of therapies] and gives them access to a live nurse on the line. They are working with a few [insurance] payers to begin rolling this out.
It becomes so complicated for patients to navigate the system. Because we have reviewed the utilization of so many patients, we can advise them. This is totally novel. But we’ve got this data, so let’s use it to help the patients.
How do you know Oak founder Ann Lamont? She’s married to Connecticut Gov. Ned Lamont, a Democrat.
I’ve been going to the Aspen Ideas Festival for many years. I’ve been a speaker. She goes there.
In Connecticut, you joined Gov. Lamont’s COVID-19 advisory board in April 2020, as the virus shutdowns were hitting hard. The next week, his administration hired another Oak company, Sema4, to do COVID-19 testing. That provoked questions from the governor’s political opponents, and last year the company canceled the contract.
You’d have to ask Annie Lamont about that and the governor. I’d be surprised if they got the contract [because of favoritism]. I’m pretty sensitive to it.
Pennsylvania’s PSERS fund invested with Oak in 2020, but in March it voted to delay a second investment while it reviews whether its pursuit of public contracts creates conflicts of interest. So there’s clearly sensitivity to public contracting by state-backed — or state-connected — investors.
I don’t think [venture capital involvement] has affected anything I’ve said at Penn. I’ve been as outspoken as I’ve ever been.
I’ve appreciated that Oak’s investment goals are my goals: lower cost, improved quality, improved patient experience, and don’t try to game the system to make more money. And we don’t invest in hospitals, we don’t invest in drug companies, we don’t invest in medical devices, where the conflicts are. We are investing in what has traditionally been the backwaters. The social determinants of health.
Another [Oak-backed] firm is Unite Us. They are trying to facilitate medical patients who are underserved and link them to social services. Close the circle. The [insurers] find it very valuable that we can improve health while giving people food stamps, housing, [Special Supplemental Nutrition Program for Women, Infants, and Children] WIC payments. No academic group could scale that into a larger program. It won’t happen [without] a company [like Unite Us].
There is a sea change in thinking because of the realization — how many not-for-profits have successfully scaled an innovation? That worked for [vaccines and other drugs]. But the new therapies, artificial intelligence, a process of care, it’s harder to [get large numbers to adopt it]. But a company can be successful. Maybe the company knows something about what it takes to make this a successful product.