For years, there's been a myth in investing that you have to choose between profit and purpose—that to do good, you had to accept lower returns. My 25 years in healthcare investing has taught me this is a false choice. The best investments we've ever made created financial value because they created social value. The companies that understand this alignment consistently outperform those that see social impact as just a PR goal.
Proof, Not Philanthropy
This is a core investment strategy, not a side project. Here's how creating social value directly drives our financial returns: Expanding Healthcare Access: Our portfolio companies serve thousands of patients annually, with a significant focus on rural and underserved markets. The social impact is bringing vital services to towns that lacked them. The financial impact? We establish strong market positions with deeply loyal patients and stable revenue. Creating Quality Jobs: We have created over 5,800 healthcare jobs across our portfolio[61]. The social impact is creating career paths and economic stability in these towns. The financial impact? We build a mission-driven workforce with lower turnover, and the goodwill we earn helps with everything from zoning to referrals. Improving Health Outcomes: Our companies focus on delivering high-quality care and achieving strong clinical outcomes. The social impact is reducing health disparities. The financial impact? Strong outcomes lead to better reimbursement from payers, a sterling reputation that drives growth, and a powerful advantage in contract negotiations.How Social Impact Creates an Advantage
When a business becomes essential to the health and economy of a community, it develops advantages that are hard to challenge. You earn unbreakable loyalty. Local officials become your partners. And the best clinicians want to work for you. A core lesson from my career is that you can't have sustainable financial success in healthcare without creating real value for the patient and the community. The companies that will deliver the best returns in the next decade will be those that understand that social impact isn't separate from their strategy. It is the engine of it.References
- Pharos Capital Group Impact Report, https://www.pharosfunds.com/impact.php (5,800+ jobs added in Pharos 2 and 3) ↩