Investing in health does not automatically optimize health impact.
While investee success can often correlate with better patient outcomes, the picture remains incomplete without intentional measurement. In fact, scaling a health solution without a purposeful impact framework can inadvertently widen health access gaps, overwhelm strained systems or miss key populations entirely.
This blind spot should matter even to investors without an impact-first mandate. A lack of clarity around how funds are approaching and understanding health outcomes conflates storytelling and decision-making, exposes you to risk, and ultimately leaves value on the table.
A hesitation among health investors to engage with impact measurement and management, or IMM, is understandable. While the impact investing field has developed a robust set of foundational frameworks to demonstrate best practices, many investors view this work as overly complicated or resource-intensive. Combined with limited time and resources, and a sense that a health focus alone is “impact enough,” many health investors choose not to engage at all.
But engaging with IMM doesn’t have to be all-or-nothing. By integrating simple, principled steps into the existing investment lifecycle, any health investor can start small to better understand and manage their impact, unlocking significant value.
If you are a health investor who cares about health outcomes, but you haven’t yet found a practical way to frame and measure them, this piece is for you. Rather than a comprehensive guide to IMM, it offers a set of practical entry points aligned to the investment lifecycle and grounded in health-specific examples to help health investors apply existing tools without unnecessary complexity.
Setting a fund-level impact thesis
Articulating what impact looks like at the fund level is a critical first step. A clearly defined impact thesis helps communicate your positioning while also guiding investment decision-making and management. At its simplest, an impact thesis describes the pathways through which investments contribute to improved health outcomes.
A useful framing is: We invest in X → so that Y change occurs → ultimately contributing to Z health outcome.
For example: We invest in digital maternal health tools → so that access to prenatal monitoring is enhanced for key populations → contributing to improved birth outcomes.
A strong thesis is grounded in a clear understanding of the problem and your unique positioning across the health ecosystem. For example, this patient-centered continuum for access to care visualizes access as a factor of health system accessibility and population-level abilities, and both Multiplier Advisors’ Whole River Health paradigm (from prevention to diagnosis to care) and Impact Global Health’s impact assessment framework (pointing further upstream to research and development) can help pinpoint investment positioning along key dimensions.
Impact screening and diligence
Use your fund’s impact thesis to ask: To what degree does a potential investment align with our intended health outcomes?
Integrating a health impact lens into investment screening often requires only small shifts in the questions investors are already asking, mostly around enhancing access.
- Instead of asking, “How well does this solution work?” ask, “Who is it working for now? Who else might benefit?”
- Instead of asking, “How does this solution integrate into the health system?” ask, “What structural barriers might affect access and uptake in specific contexts?”
During deeper diligence, investors can request materials clarifying a company’s impact, including an investee impact thesis, data sources and methodologies on health outcomes, and any evidence and validation supporting impact such as historical data, beneficiary or customer feedback, or external research on similar models.
The Five Dimensions of Impact from Impact Frontiers offer a general framing to support impact screening or diligence, as well as an impact risk assessment framework. Tools specifically for health investors include Rhia Ventures’ Health Equity Assessment and Rating Tool, or HEART, which evaluates potential impact across outcomes orientation, systems change, access to care and affordability, and Duke’s Margolis Institute for Health Policy’s Health Value Return on Investment framework, which outlines a “health value diligence” methodology. The American Cancer Society’s BrightEdge has also developed a Health Equity Classification tool.
Measuring, managing and reporting impact
Deal close is the moment to align with portfolio companies on expectations for impact data collection and reporting. The goal is to prioritize indicators that are both meaningful and feasible to collect. Often, this means leveraging data already accessible to portfolio companies; sometimes, simply disaggregating existing data (e.g., by geography, income level or patient demographic) can uncover important insights for health impact.
Several resources can help identify useful indicators for health impact. The Global Impact Investing Network maintains the IRIS+ system of standardized indicators and taxonomies including for health. The Impact Investing Initiative for Global Health’s practitioner’s guide to IMM offers sample indicators and considerations tailored to health investor archetypes. And Sonen Capital’s Investing in Health Impact framework suggests indicators aligned to key health investment strategies and to the United Nations Sustainable Development Goals.
Incorporating impact goals, indicators and reporting processes into deal documentation is a foundational step. But active portfolio impact management requires meaningful engagement with the data throughout. Regular impact conversations with investees, for example, enable reflection on impact contribution and challenges — and their relation to financial returns.
Even health investors with limited time and resources can take meaningful first steps in health impact framing and measurement. No matter the impact mandate, this enhanced understanding mitigates risk and begins to unlock significant value — for health investors, for companies, and for patients and communities.
Laura Hollod is the founder of Hollod Impact.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.
