The $100 million will be committed over the next five years. Catalyst plans to invest directly in more than 50 startups, and indirectly through other venture funds in about 150 more companies.
Catalyst has already invested more than $1.8 million in four companies, none of which are based in Georgia. The companies range from a maternal health startup to an antimicrobial LED light manufacturer. Wellstar is also a customer of some of the companies in which it has invested.
“This is a great first step,” said Maria Thacker-Goethe, CEO of Georgia Bio, a nonprofit that promotes the state’s life sciences. “But the real work begins now for Wellstar, for those who will have a meaningful impact on patient health.”
Investments give companies what they need to get started, but they also need mentoring, support and guidance that they can only get from an expert network, she said.
Georgia is one of the states with the worst health outcomes, but it’s also home to great tech resources, Thacker-Goethe said. “Atlanta has a unique opportunity to be a leading city — perhaps the leading city — at the intersection of biopharma and digital health.”
Ann Holder is founder and CEO of Marani Health, a maternal health startup that is one of the first four companies Catalyst has invested in.
“The fact that Wellstar participated in this journey for us is really important,” said Holder. Catalyst invested $475,000 in the startup’s most recent fundraising round. Holder said she plans to use the funding for Marani’s digital health platform for prenatal and postpartum care, finalizing FDA approval of its fetal monitoring device and continued product development.
Catalyst has also partnered with Atlanta organizations to deploy some of their venture funding. When Catalyst launched two years ago, it announced that it was investing in Engage, the venture fund that raises and invests money from business partners. Cox Enterprises, which owns The Atlanta Journal-Constitution, is one of Engage’s partners.
Catalyst invested $3 million in Engage at launch, Capps said, adding Catalyst will continue to be involved with Engage and similar groups.
Catalyst also partners with Goodie Nation, a non-profit community for various founders, investors and experts. About 20% of the companies in Goodie Nation’s network are health care startups, said Joey Womack, founder and CEO of the nonprofit. Catalyst will consider investments in some of the Goodie Nation founders, and one of Catalyst’s leaders is also a mentor for the non-profit.
“I think (the Catalyst fund) helps cement Atlanta’s place in terms of leadership in the innovation space and in health,” Womack said. Atlanta has tried to leverage institutions like the Centers for Disease Control and Prevention to become a global health leader.
“But I think the capital was the missing piece,” Womack said.
Wellstar’s decision last year to close Atlanta Medical Center and the emergency room and regular hospital beds at Atlanta Medical Center South in East Point ignited a firestorm. Both Fulton County facilities disproportionately served lower income and black patients.
Wellstar has said the facilities were not “financially sustainable.” In response, elected officials announced two federal complaints against the provider.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
According to the most recent financial documents Wellstar filed with the state, it put the cost of indigent and charitable care at $308.6 million for both AMC locations. Some health experts and local officials have expressed skepticism about how the estimate was calculated.
Wellstar has said it continues to provide huge amounts of uncompensated care at its hospitals across the state, and is the largest provider of charity care in the state.
Still, Wellstar reported it had $2.8 billion in net assets in its latest September 2022 financial report, raising questions about why the system had to close the AMC hospitals.
Like most nonprofit hospital systems, Wellstar’s charitable designation relieves it of paying federal, state and local taxes.
State legislators, Fulton County Commission Chairman Robb Pitts and other local leaders in March filed two federal complaints arising from the AMC closures. One asked the IRS to investigate whether Wellstar should maintain its nonprofit status. The other document asked the Office of Civil Rights of the Department of Health and Human Services to investigate whether the hospital closings violated Title VI of the 1964 Civil Rights Act, and if so, to order Wellstar “the harm to the community.”
In response to questions about the need to close the two AMC facilities, the health system said “Wellstar is a nonprofit organization, and the health system’s net revenues are reinvested in our mission. We must operate responsibly.”
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