Oak Investment Partners Invests in xG Health

Oak Investment Partners has invested $40 million in xG Health Solutions. Geisinger Health System is also investing in the company, a spokeswoman says. xG, of Columbia, Md., is a healthcare services company that will help implement Geisinger intellectual products.

Geisinger Health System, in partnership with Oak Investment Partners, announced today the formation of a new company, xG Health Solutions™, an independently operated venture that will make Geisinger’s intellectual property and expertise available to other healthcare systems.

The new venture is being supported in part by a $40 million investment by Oak Investment Partners.

“Over the past 16 years, Geisinger has prepared for today’s healthcare challenges by redefining and reengineering the way we care for our patients and members,” said Glenn D. Steele, M.D., Ph.D., president and chief executive officer, Geisinger Health System. “Our innovative solutions help transform how healthcare will be provided and financed in the future, and xG Health Solutions will enable us to extend these innovations well beyond Geisinger.”

Oak Investment Partners is the premier investor in healthcare. With more than 30 years of investment experience, Oak Investment Partners is a multistage venture capital firm that has invested more than $9 billion in over 500 companies throughout the world.

“The creation of xG Health Solutions is indicative of the successful innovation in motion at Geisinger Health System,” said Ann Lamont, managing partner at Oak Investment Partners. “Geisinger’s unique model has resulted in better patient outcomes and reduced cost, something we are proud to support and are confident we will see replicated throughout the nation with the formation of xG Health Solutions.”

xG Health will offer a variety of products and services, including: consulting; population health data analytics, interpretation and reporting; patient- and population-focused care management; health information technology optimization; and third party administration (TPA) services. Non-TPA products and services are based on Geisinger innovations and know-how that have enabled Geisinger to consistently deliver high quality care while controlling health care costs.

ProvenHealth Navigator®, Geisinger’s advanced medical home initiative, for example, has resulted in an 18 percent reduction in hospitalizations, a 24 percent reduction in readmissions, and a 20 percent reduction in emergency room visits for Medicare patients from 2006 to 2011.  The hospitalization and emergency room visit rates were 13 and 28 percent lower, respectively, from 2007 to 2011 among commercially insured individuals cared for in advanced medical home sites compared to those cared for in non-medical home sites. Geisinger has achieved similar results at several unaffiliated hospitals in Pennsylvania and a hospital in West Virginia, and is working with health systems in Maine, New Jersey, Delaware and several other states.

Earl P. Steinberg, M.D., M.P.P., Geisinger’s executive vice president of innovation and dissemination, will serve as xG Health’s chief executive officer. To generalize and scale key Geisinger capabilities, xG Health has recruited a team of healthcare and technical experts, who also will leverage physicians, nurses, case managers, clinical and actuarial informatics experts and hospital administrators from Geisinger’s Clinical Enterprise and Health Plan who have played key roles in Geisinger’s success. Dr. Steinberg is a nationally renowned expert in evaluation and improvement of healthcare. Prior to joining Geisinger, Dr. Steinberg was a successful entrepreneur, having built Resolution Health into a leader in healthcare population analytics that was ultimately acquired by WellPoint.

“It’s a formidable task to meet the many challenges facing healthcare today,” said Dr. Steele. “It is generally accepted in the healthcare industry that somewhere between 30 to 40 percent of the care that is provided is not only unnecessary, but may actually cause harm to patients. We strongly believe that the products and services available through xG Health will provide proven solutions to help other healthcare systems improve their performance.”

About Geisinger Health System
Geisinger Health System is an integrated health services organization widely recognized for its innovative use of the electronic health record, and the development of innovative care models such as ProvenHealth Navigator® and ProvenCare®. As the nation’s largest rural health services organization, Geisinger serves more than 2.6 million residents throughout 44 counties in central and northeastern Pennsylvania. The physician-led system is comprised of more than 17,000 employees, including a 1,000-member multi-specialty group practice, six hospital campuses, two research centers and the 310,000-member Geisinger Health Plan, all of which leverage an estimated $5.5 billion positive impact on the Pennsylvania economy. The health system and the health plan have repeatedly garnered national accolades for integration, quality and service. In addition to fulfilling its patient care mission, Geisinger has a long-standing commitment to medical education, research and community service. For more information, visit www.geisinger.org, or follow the latest Geisinger news and more on Twitter and Facebook.

About Oak Investment Partners
Oak Investment Partners is a multi-stage venture capital firm and a lead investor in the next generation of enduring growth companies. Since 1978, the firm has invested $9 billion in nearly 500 companies around the world, earning the trust of entrepreneurs with a senior team that delivers steady guidance, deep domain expertise and a consistent investment philosophy. The firm’s five major growth sectors of focus are information technology, Internet and consumer, financial services technology, healthcare services and clean energy. For more information, visit www.oakvc.com.