Investing in healthcare isn’t just a budgetary line item—it’s a direct investment in the health and well-being of individuals and communities. When healthcare systems are adequately funded, they can provide timely access to quality care, support skilled providers, invest in preventive services and adopt life-saving technologies. These resources are essential not only for treating illness but for preventing it in the first place.
In a recent episode of the Healthcare Executive Podcast, Cheryl Pegus, MD, and Mark McClellan, MD, PhD, shared their insights surrounding this important topic. These experts, who co-chair the recently established Duke-Margolis Capital Impact Council, discuss how strategic funding in healthcare leads to improved patient outcomes and why prioritizing healthcare investment is critical for building a healthier, more equitable future.
The Framework: Health Value ROI
Dr. Pegus explains that the Duke-Margolis Capital Impact Council uses a "health value return on investment" framework to guide and assess healthcare investments. This framework evaluates not just financial sustainability, but also measurable improvements in affordability, access and outcomes—such as better clinical metrics for conditions like diabetes or expanded care availability outside traditional hours.
Many investors, from venture capitalists to private equity firms, are increasingly aligning financial goals with positive health impact. The council supports this approach by providing data and tools to help investors make informed, early-stage decisions that improve both healthcare delivery and patient outcomes.
“There are many dimensions you can measure,” states Dr. Pegus. “You could look at the intended populations. For example, did we impact the healthcare professional community? We talk about burnout. We talk about lower numbers of people being able to care for our populations, particularly as our populations age. So, do we have new tools and solutions that can have an impact there? And, we look at how to ensure you actually do.”
Evaluating Potential Investment Partners
The health value return on investment framework can help address concerns healthcare leaders may have about private equity involvement. By focusing on best practices and providing case examples across different stages of investment—from venture capital to private equity—the framework shows it's both feasible and valuable to measure health outcomes alongside financial returns.
Dr. McClellan notes that healthcare executives can use the council’s resources to evaluate potential investment partners, asking whether they have a health value strategy in place that prioritizes impact on access, affordability, and outcomes—not just profit.
“We'd like feedback from healthcare executives on what's missing, what's been their experience. That has been helpful when they choose a successful investment partner,” he shares. “But, we're still in the early days of proving this out. We want to strengthen it further. Our intent is to help make sure the private equity or any other type of private investment organization healthcare executives are involved in are going to achieve returns both financially and from a health value standpoint.”
Dr. Pegus supports the importance of having feedback readily available and in full transparency. “One of the things we're really interested in here are the companies that are willing to share case studies of their work. Our members today will actually show you how they are investing. How they are measuring outcomes and what those outcomes are.”
How Does Research Funding Factor in to the Effort?
While traditional funding for medical research—like from the National Institutes of Health—is declining, private investment is increasingly stepping in to bridge the gap, especially in translating scientific discoveries into real-world health improvements. Dr. Pegus specifically mentions the American Heart Association’s efforts through AHA Ventures, which focus on funding innovation and implementation of evidence-based science.
Organizations like Kaiser are already investing across the full spectrum, from research to clinical application. The goal is not just to fill funding gaps, but to drive innovation in areas like artificial intelligence and healthcare delivery, using frameworks like health value return on investment to ensure measurable impact and transparency.
Looking Toward the Future
The next steps for the Duke-Margolis Capital Impact Council involve expanding on early successes by engaging more investors and organizations to share case studies, best practices and transparent examples of health value in action. The Council has already grown to include groups like Kaiser Permanente Ventures and TPG, and now aims to normalize the use of health value frameworks in healthcare investment decisions.
With ongoing shifts in healthcare policy—such as expanded telehealth, digital innovation and payment reforms—private sector investment will play a crucial role. The council is focused on building resources and fostering collaboration between healthcare leaders and investors to ensure financial partnerships drive real improvements in care quality, cost and access.
“When it comes down to it, our day job at the Duke-Margolis Institute is to monitor and provide relevant research and analysis on how health policy might evolve. I do see healthcare financing on the public side continuing to shift in this direction of paying for better health,” notes Dr. McClellan.
Cheryl Pegus, MD, is executive chair, FlyteHealth/chair, AHA Ventures. Mark McClellan, MD, PhD, is director, Duke-Margolis Institute for Health Policy, Duke University.