Most clients likely already have some exposure to the health market, whether it’s named as such or not.
The health market is no longer limited to the bounds of traditional medicine, biotech, or care delivery. Conversations around longevity, wellness, and bold promises of how AI can transform the industry are pushing health front of mind for many clients. At the same time, rising healthcare costs and persistent health disparities since COVID-19 have made the gaps of the current system even more visible.
The investable universe has expanded, but without a clear framework, client interest can be hard to translate to actionable strategies that align with their core goals.
CapShift’s health investing framework was developed in direct response to growing client demand, to help advisors work with that broader picture: turning a client’s incidental health exposure into something intentional.
Our framework highlights three pathways for investors interested in advancing health: innovation, care, and prevention. This three-pronged approach provides a holistic look at health investing. In addition to treatment, targeting improvements in health outcomes requires access to care and attention to the underlying conditions that influence well-being.
Looking at health beyond clinical care
A deeper understanding of health disparities across gender, race, and other populations, and lessons from the COVID-19 pandemic have underscored that health outcomes are influenced by far more than medical care alone. A growing body of research points to the social determinants of health, which include housing, nutrition, environment, education, and economic opportunity, in addition to medical care.
Healthcare services are essential, but the conditions in which people live, work, learn and age can also directly shape outcomes. This wider aperture crowds in a larger set of investable opportunities for health-inclined clients, meaning that health investing can include healthcare delivery and innovation, but it can also include a wide range of other private market strategies that support well-being.
This broader perspective is reflected in the growing range of investment vehicles and enterprises focused on health-related outcomes. Clients seeking to support healthier communities may find opportunities across a range of sectors that are not traditionally classified as healthcare investments. Affordable housing, healthy food systems, clean water, and community development can all influence health outcomes alongside more traditional healthcare solutions.
How to categorize types of health investments
Using this more expansive approach to health investing, we see the unique role of private impact capital spanning three types of investable opportunities: innovation, care, and prevention.
- Innovation: includes investments in new technologies, therapies, diagnostics, biotechnology, and digital health solutions.
- Goal: These investments seek to advance healthcare through scientific and technological progress, with the potential to improve diagnosis, treatment, and patient outcomes.
- Examples: Opportunities range from early-stage biotech companies developing novel therapies to digital platforms that expand access to information, streamline care delivery, or help patients better manage chronic conditions.
- Goal: These investments seek to advance healthcare through scientific and technological progress, with the potential to improve diagnosis, treatment, and patient outcomes.
- Care: focuses on expanding access to healthcare services and infrastructure.
- Goal: While medical innovation can improve what is possible, access to care often determines who benefits. These investments can help address barriers related to geography, affordability, and provider shortages, while strengthening the systems that connect people with the care they need.
- Examples: Opportunities in this category may include primary care delivery, telehealth platforms, mental health services, healthcare workforce development, and community-based care models designed to reach underserved populations.
- Goal: While medical innovation can improve what is possible, access to care often determines who benefits. These investments can help address barriers related to geography, affordability, and provider shortages, while strengthening the systems that connect people with the care they need.
- Prevention: targets factors that influence health before medical intervention is needed.
- Goal: By focusing on the upstream drivers of health, prevention-oriented investments seek to create healthier communities while reducing the factors that contribute to poor outcomes over time.
- Examples: Investments in affordable housing, healthy food systems, clean water infrastructure, environmental solutions, childcare, and community development can help address the conditions that support health and well-being.
- Goal: By focusing on the upstream drivers of health, prevention-oriented investments seek to create healthier communities while reducing the factors that contribute to poor outcomes over time.
Taken together, these categories offer several different ways for investors to engage with health as an impact theme.
Centering health equity
Health outcomes vary significantly across populations and communities. Differences in access to care, economic resources, and environmental conditions can contribute to disparities in health and well-being.
For investors, this raises important questions about who benefits from a particular solution and whether investments are helping expand access to health-promoting resources and services. A health equity lens can help investors assess both potential impact and the populations being served.
Healthier, stronger and more equitable
Health outcomes are shaped by a complex set of interconnected factors, many of which extend beyond traditional healthcare.
That makes health a broad investment theme, but that doesn’t mean it has to be an abstract one. Many clients already care about these issues because they touch their families and communities. Advisors can help turn that interest into a clearer investment approach.
Organizing opportunities around a framework of innovation, care, and prevention can help clients see where their capital may fit and how different investments can work together. For more on health investing and CapShift’s framework, read our full report, A Healthy Future: Putting Dollars to Work for Health Outcomes and Equity.
Haley Aubuchon-Jones is the director of marketing at CapShift.
Advisors’ Corner is a content partnership between ImpactAlpha and CapShift. CapShift’s impact investing platform empowers financial and philanthropic institutions — and their clients — to invest in their vision for a better tomorrow. All content is solely for informational purposes and should not be used as the basis for investment decisions.
