Some critics question whether the strategy fits with the mission and perks enjoyed by not-for-profit entities.
Advocate Aurora Health is expanding its reach beyond its traditional hospital business with the launch of an investment group on the hunt for organizations it can either acquire or fund in the consumer and wellness sectors.
Advocate Aurora Enterprises was unveiled with its first two deals, the acquisition of Senior Helpers, a firm that offers in-home care for older adults and an investment in Foodsmart, a telenutrition company.
For years, the health system’s core focus has been providing a range of medical services to Midwesterners throughout Illinois and Wisconsin via traditional inpatient services as well as its vastly growing outpatient business. The hope is that this for-profit venture will yield an additional revenue stream to ultimately contribute to Advocate Aurora’s bottom line.
“What we realized is that there are a lot of other things that contribute to people’s broader health beyond just great medical care, and we want to establish a much deeper presence in a variety of what we call consumer health and wellness sectors,” Scott Powder, president of the new enterprise, said.
Advocate Aurora joins other major health systems, including Ascension and Providence, in establishing a venture arm.
The investment units have attracted scrutiny, though, reviving larger questions about whether health systems recognized as tax-exempt charitable organizations should retain that designation.