CHI will look to companies with which it already does business and those working with its Institute for Research and Innovation, he said. Indeed, the group's first investment—an undisclosed amount in the Seattle-based telemedicine company Carena—will provide financing for a company that previously worked with CHI facilities in the Pacific Northwest, Barto said. The venture capital strategy gives CHI some influence over companies in which it invests without a full acquisition, he said.
Barto said CHI would finance the fund though cash and a gradual and slight shift in its investment portfolio's asset allocation.
The endeavor is not the system's or the industry's first foray into provider-led venture capital. CHI this year invested for a second time in a fund overseen by Ascension Health Ventures, the venture capital arm of Ascension Health, St. Louis. CHI in 2007 had joined Ascension, Catholic Health East, Newton Square, Pa., and Catholic Healthcare West, now known as Dignity Health, San Francisco, in a $200 million fund also overseen by Ascension Health Ventures. CHI will continue to make investments with Ascension, and will seek other opportunities, Barto said.
In January 2011, Community Health Systems, Franklin, Tenn.; Iowa Health System, Des Moines; LifePoint Hospitals, Brentwood, Tenn.; Trinity Health, Novi, Mich.; and Vanguard Health Systems, Nashville, launched a private-equity fund, now with $157 million in assets.