Bill Frist’s Frist Cressey Ventures raises $425 million fourth fund
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Fortune
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Summary:
Bill Frist has spent decades at the intersection of medicine and policy — first as a surgeon, then as U.S. Senate Majority Leader, and now as a venture capitalist betting on the future of healthcare services. With Frist Cressey Ventures closing a $425 million fourth fund, Frist is doubling down on his conviction that lasting, large-scale change in healthcare requires both smart investment and sound policy.
The firm — which counts Thyme Care, Ambience, Devoted Health, and Visana among its portfolio companies — focuses exclusively on the $3 trillion healthcare services market, steering clear of devices and pharmaceuticals. As AI reshapes the investment landscape and Washington reshapes the policy environment, Frist sees opportunity where others see complexity: in the fragmented, underserved corners of the system that technology and thoughtful capital have yet to crack.
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“Lots of people say: ‘With the policy so messed up in Washington right now, why in the world do you spend so much time thinking about it?’” he told Fortune. “It’s because I have a great belief that … the only way to get to large scale is good policy. I see the power of things like the Medicare Modernization Act, which introduced prescription drugs. Believe it or not, before that, prescription drugs weren’t part of Medicare at all.”
Frist served 12 years in the U.S. Senate, after spending about 20 as a doctor. In 2016, he teamed up with Bryan Cressey to start a Nashville-based venture capital firm focused specifically on health care services. The firm’s portfolio includes Ambience, Thyme Care, Visana, and Devoted Health. And now, Frist Cressey Ventures has raised its $425 million fourth fund, Fortune has exclusively learned.
“We don’t do molecules, we don’t do devices,” said Frist. “All those are great things, but take a different group of specialty people. We go really deep. We’re specialists in the $3 trillion world of health services.”
AI has created a floodgate moment in health care startup investment, as VCs inundate the space, claiming there’s serious AI ROI in health care. But Bill Sheahan, chief innovation officer and SVP at MedStar Health (and a Frist Cressey LP), points out that this all might be tougher than it looks.
“Health care is an interesting example of, historically, when we’ve inserted technology—say, electronic health records—we haven’t necessarily made things easier,” said Sheahan. “In some cases, we’ve made things harder. There’s this burden of the way technology in health care operates today that I think AI and automation can unlock.”