CalPERS Gives Healthcare a "HII" Priority

June 5, 2007 ( - The California Public Employees' Retirement System (CalPERS) has announced an initiative that the nation's largest public pension system says will generate superior portfolio returns and improve quality and efficiency in the U.S. healthcare market.

CalPERS will commit up to $500 million to a new Healthcare Investment Initiative (HII) for co-investments and direct investments in healthcare companies, and up to $200 million to healthcare-focused private equity funds and strategic joint ventures. CalPERS is teaming up with Health Evolution Partners, a new private equity firm headed by Dr. David J. Brailer, M.D., PhD., entrepreneur and former National Coordinator for Health Information Technology.

According to a CalPERS press release , the idea for the new program was the brainchild of the system’s Chief Executive Officer Fred Buenrostro, who said “Billions of investment dollars are already in the healthcare market, but what’s missing is the focused investment of those dollars to specifically address the needs of purchasers.” Buenrostro said CalPERS plans to “…be a catalyst for companies to come up with new solutions to the health care crisis.”

For example, urgent care facilities are needed in rural areas to improve access and lower costs. Companies haven’t built such facilities because of the lack of capital and a scattered patient population.

According to the press release, other new investments might go to:

  • Hospitals that excel in certain specialties or other providers that can reduce costs and improve performance;
  • Retail or work site clinics that are staffed with nurses and other practitioners to enhance access to care, especially basic preventive health services;
  • Technology to enable electronic medical record-keeping, improve quality and patient safety, and to integrate the systems of various clinics and departments;
  • Home health services that would allow patients to avoid more acute settings, reduce costs and enhance the quality of life; and
  • Technology and services that improve the management of acute and chronic diseases, including home- and hospital-based heart rate monitoring devices from remote locations.

CalPERS is the nation’s largest pension fund with assets totaling nearly $250 billion. The System administers retirement and health benefits for approximately 1.5 million current and retired public employees and their families, and 2,600 California public employers.

Find out more about the initiative at