Investing in Healthcare's Future

Jason Torres: 

Thank you, Elana. Happy to be here. 

Elana Margulies-Snyderman: 

Absolutely. So, to kick off the conversation, tell us a little about Sana Capital and how you got to where you are today. 

Jason Torres: 

Sure. Sana Capital is a health care investment firm. I started with the goal to invest in health care companies that increase access, improve outcomes, and reduce costs. So, Sana is the Latin root word, meaning to heal, and in Spanish, it's a synonym for a cure or a remedy, and that's what we do at Sana Capital. I grew up watching my mother, who was a social worker in New York City, help people who struggled to get care. And so that was my introduction into health care, and that stuck. And so, my path took me through Wall Street and private equity, but I've always come back to health care. And so, over the years I've invested in companies that have gone public and some have failed, but you learn a lot when things are up and when things are down. But overall, we've done exceptionally well in utilizing this policy-driven approach. We study what comes out of Washington, D.C., what comes out of certain states. We translate that to a business strategy. We help execute, get contracts, and so that's how we make money for our LPs. But that's how I got into this space. 

Elana Margulies-Snyderman: 

Great, Jason. And given your focus on health care investing venture in underrepresented or overlooked founders, I would love to hear your overall outlook for the space. 

Jason Torres: 

Yeah, so health care is changing, it's challenging, it moves quickly. It's highly regulated. It's complex. And so, there's technology advancements and that all creates opportunities. And so, for us, we take a policy-driven approach. We study what comes out of Washington, D.C., we study what comes out of certain states, we translate that to a business strategy and then help execute. And that's how we approach investing in health care. 

Elana Margulies-Snyderman: 

And Jason, more specifically, what are some of the greatest opportunities you see in your space and why? 

Jason Torres: 

Certainly, what this administration wants to invest in in health care is really around cost-containment solutions and then cost-transparency solutions. And so that aligns well with how we approach health care. We study the policy and then look for the opportunities and the gaps. You can think about what we do as with our mission of access, outcomes, and costs, think about a distribution curve that's quite wide, and we look for the lowest costliest, worst outcomes, least connected populations, and we look to get those populations to the mean. And that's how we approach achieving our mission in health care. And that aligns well, typically with certain sub-sectors and approaches of administrations agenda items that they want to achieve. 

Elana Margulies-Snyderman: 

Jason, on the other hand, what are some of the greatest challenges you face in your space and why? 

Jason Torres: 

Sure. For fund managers, fundraising is always a challenge, especially for diverse managers breaking into the space. Building trust with LPs takes time and allocators still gravitate towards the larger, more established names. For founders, the biggest challenge is aligning their solution with how customers buy and purchase. Take hospitals for example, they care about reducing readmissions rates. That's a policy that was in the last couple of administrations. Because of penalties for excessive readmissions rates, they're costly. And so, if a startup can help keep discharged patients out of the hospital and out of the ER, then that's a very clear value prop for them. So, the key is not just having a great product, but how it fits into the way health care organizations operate and make purchasing decisions. And then, in the health care system, it's about policy and regulation. And by understanding these policy shifts ahead of the market, that's how we position our companies to benefit while others are still figuring it out. 

Elana Margulies-Snyderman: 

Jason, to shift gears a bit, ESG has been an important topic, and we'd love to hear your insights on that. 

Jason Torres: 

Yeah, so for Sana, it's about our mission always, which is increase access, improve outcomes, and reduce costs. So, by understanding these policy shifts and how the U.S. is approaching those that spend that they have, which is $4.5 trillion and growing, that then enables you to align up with DEI initiatives or ESG initiatives. So, what do I mean? By focusing on these populations, we're focusing on the costs, not a specific demographic. So typically, when you'll hear things like anti-DEI, or you'll hear things, getting rid of ESG, it doesn't really work, certainly not in health care because the two are connected. And so if we're going to reduce the costs and be competitive, then we have to focus on the high-cost populations that are blowing up the model, whoever they may be, whether it's veterans, whether it's elder, whether it's demographics with maternal health, which we have terrible outcomes, we need to get these populations to the mean. And by doing that, then we can really curb the costs. So, as a derivative, as an effect, as an impact, we have that effect and we have that impact, but it's by focusing on the high-cost populations that are blowing up the model in health care. 

Elana Margulies-Snyderman: 

Jason, we've covered a lot of ground today and wanted to see if you have any final thoughts you'd like to share with us or anything about your future plans at Sana? 

Jason Torres: 

So, we're focused on backing great founders. We're focused on deepening our relationships and partnerships with payers, providers, health care foundations, health care executives, and then working with LPs who share our mission of access, outcomes and costs. So, if you believe health care should deliver better outcomes at lower costs and that solving the biggest inefficiencies is both an opportunity and a necessity, then we'd love to connect. We're at sanacapital.com and we're building a future where smart investments create real impact while achieving outsized returns. We'd love to talk to you. 

Elana Margulies-Snyderman: 

Jason, I want to thank you so much for sharing your perspective with our listeners. 

Jason Torres: 

You got it. Thank you. 

Elana Margulies-Snyderman: 

And thank you for listening to the EisnerAmper podcast series. Visit eisneramper.com for more information on this and a host of other topics. And join us for our next EisnerAmper podcast when we get down to business. 

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