Venture investment in the health business typically chases miracle cures and high-technology gadgets, like bioengineered drugs and new medical devices. They promise much but cost a lot.
David Brailer, a former senior health official in the Bush administration, is starting a $700 million private equity fund, Health Evolution Partners, with a different mission. "We're going to be investing in things that can reduce the crushing costs of healthcare," said Brailer, who was the administration's national coordinator of health information technology.
At the outset, the sole investor will be CalPERS, the California Public Employees' Retirement System, the largest public pension fund in the U.S. with assets of $240 billion. CalPERS funds form the basis for pension and health benefits for 1.5 million workers, retirees and their families.
Health Evolution Partners, Brailer said, would look to invest in companies with new ideas in fields like remote monitoring of patients, the management of chronic diseases, telemedicine, predictive genomics to tailor drug doses and eBay-style Internet marketplaces for services like reading chest X-rays.
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