Skip to content

Dr. Adaeze Enekwechi, Operating Partner at Welsh, Carson, Anderson & Stowe: Private Equity and the Healthcare Workforce

WorkforceRx with Futuro Health
Dr. Adaeze Enekwechi, Operating Partner at Welsh, Carson, Anderson & Stowe: Private Equity and the Healthcare Workforce


“I did not ever think of private equity as a career option for me,” admits Dr. Adaeze Enekwechi, and not only because she saw it as a male-dominated profession. The former head of health at the Office of Management and Budget under President Obama and Ph.D. in health management expected to make a difference through public policy. But as an Operating Partner at Welsh, Carson, Anderson and Stowe, she’s having an impact from a different perch. “We look at assets or companies to build that would make a meaningful contribution in whatever specific healthcare ecosystem we're interested in investing in,” she tells Futuro Health CEO Van Ton-Quinlivan. “Our philosophy is not to just put money towards something and collect. We’re looking for opportunities to build something meaningful.” One current example is finding solutions to the nursing shortage and the painful budget crunch hospitals are enduring to pay for traveling staff. Investing in contingency staffing companies would earn a return, she says, but does nothing to solve the problem. A more useful target, she says, is leveraging technology to optimize the existing workforce. Adaeze shares examples of other issues she’s looking at through a private equity lens including racial inequities in care, social determinants of health, and what the training needs are as more care is being provided in the home. Check out this thoughtful episode of WorkforceRx in which you’ll also find out why this nationally respected healthcare leader thinks retail giants like Walmart and CVS should be applauded, and which two healthcare issues you should keep a close eye on in the coming months.


Van Ton-Quinlivan: Welcome to WorkforceRx with Futuro Health, where future-focused leaders in education, workforce development and healthcare explore new innovations and approaches. I’m your host, Van Ton-Quinlivan, CEO of Futuro Health. With Washington’s focus on the pandemic, economic recovery and foreign affairs, non-pandemic healthcare policy has fallen off the radar to some extent. But there’s actually much under discussion in D.C. and state capitals that could have a big impact on the healthcare system and its workforce.

For insights into what is happening with healthcare policy, we turn today to a nationally respected healthcare thought leader Dr. Adaeze Enekwechi. She is currently an operating partner on the healthcare team at the private equity firm Welsh, Carson, Anderson and Stowe where she works on creating a fiscally sustainable health system responsive to vulnerable communities.

Previously, Dr. Enekwechi headed health programs at the White House Office of Management and Budget under President Obama, and spent most of her career involved in different aspects of healthcare policy and economics. She is also an associate professor at the Milken Institute of Public Health at George Washington University. Thanks so much for joining us.

Dr. Enekwechi: Thank you so much, Van.

Van: You have such an impressive background. I am most curious, what brought you to your current role, and how do you define your mission there?

Dr. Enekwechi: Yeah, so it’s certainly not a planned stop, if you will. When I was sitting and thinking about what I wanted to do in healthcare — even before that, when I was mostly just thinking about public policy as a career — I was focused on the public sector. I started at the Congressional Budget Office more than twenty years ago and my hope was to work on analyses and policy development around some of the biggest issues facing the country. I really thought at the time that I would start and end there. My plan was to do a PhD in public finance so that I could continue the same type of work.

At the time, e-commerce was a term and Amazon was relatively new, and we didn’t know how we would capture taxes and revenue for various public entities, whether it’s state or federal or county taxes. We’re old enough to remember when this was a big question. I was very interested in studying how we would basically capture revenues and distribute resources from this new mode of commerce. That seems very far from healthcare, but not entirely, because I ended up in healthcare and I can talk about that later.

The questions are not dissimilar. In healthcare policy we’re still talking about Medicare and Medicaid being huge, significant purchasers.  Medicare is actually the largest purchaser of health services in the world, and how do you buy the right thing for the right Medicare beneficiary at the right time — whether it’s hospital services, outpatient care, physician care, long term care, etc?  So, I did a lot of public sector work, some private sector consulting work, and I ran a large consulting firm and took it through a merger and acquisition process in 2020.

Then after that, Welsh Carson called and said, “Hey, how about joining us as a partner here?” And I said, “You must have the wrong person. I’m a woman. I’m a woman of color. I care about healthcare for poor people and vulnerable people.” They said, “No, we have the right person.” I said that tongue-in-cheek in a way, but not entirely, because there is not a black woman that I know in healthcare private equity.  Private equity is mostly male, although there are a number of women who were at some of the junior ranks. So, I did not ever think of it as a career option for me. It just never occurred to me. But since I joined, I realized I get to bring all of my background in policy and research — I’m a health services researcher by training, that’s what my PhD is in — to my work as we look at assets to invest in or assets or companies to build that would make a meaningful contribution in whatever specific healthcare ecosystem we’re interested in investing in. That, to me, is incredibly meaningful. And to the extent I feel very much like I’m the only one, that was a reason for me to say yes and hopefully open doors for others, because the table really should be as broad as possible given what’s happening in the private sector.

Van: Well, it is extraordinary to have women and women of color in in these private equity seats. I was wondering…many of our listeners have an understanding of the public sector, but can you give us a little bit of detail on what private equity is about?

Dr. Enekwechi: Private equity is a way to invest in companies in the private sector. For public equities, we tend to think of, basically, the stock market and you can buy shares of a company. Everybody knows that. Private equity is where typically large institutional funds — and by that I mean public pension funds like CalSTRS and CalPERS out in California, who actually happen to be some of our largest investors —  have individuals who manage those accounts who are responsible for having a balanced portfolio. You wouldn’t want every penny in the stock market, for example. So those managers – we call them “limited partners” — would allocate perhaps the majority of the their large pools of capital towards the public markets or public equities and they allocate a minority, say 10-15%, towards private equity. Those are our sources of funds for the most part — CalSTRS, CalPERS, the State of Hawaii, State of Connecticut, and we have a number of others.

If you think about it from that perspective, private equity investment firms are fund managers because we take that capital out onto the private market and say, “What companies can we invest in and build something that is meaningful that earns the return that our investors expect us to earn?” We are in healthcare, but you have the same conversations in utilities and transportation and technology. And in healthcare, they care what we do in the healthcare space because they’ve got a stake in what we’re building in the healthcare system, if you think about it.

So, that’s what private equity is. We find companies, we price them based on the good things and the bad things about them, we think about whether we can do anything meaningful — whether we can contribute to building out that company, expanding its footprint, serving more patients — and we want to do it at a reasonable return because our limited partners expect that we do that. That’s how public employees, who are the original sources of capital, get to retire comfortably, because that’s how their investments grow over time. So, that’s what it is in a nutshell.

Van: Well, I’m looking forward to hearing more examples as we go on about how you’re planning to do good in addition to bringing a return for these dollars. You’ve previously said that healthcare is almost never only about health. Context is everything. Can you share what you mean about that?

Dr. Enekwechi: I don’t remember where I said that, Van, but it definitely sounds like something I said. If you’re a physician or a nurse, you think about healthcare within the four walls of the hospital. Perhaps the layperson thinks about healthcare as walking into the hospital or to my physician’s office, and whatever is happening there is healthcare. But healthcare is also about why did I need that care to begin with? What were some of the preceding factors that led to my need, or the mix of needs, that I’m now faced with? What happens to me when I leave that interaction?

Let me be more specific. If I am from a wealthy neighborhood I have eaten relatively well, I’ve taken all my vitamins, I’m generally literate when it comes to healthcare literacy, nobody needs to tell me to stop smoking because I know that it’s bad for me and I don’t smoke. That makes my interaction very different from if I have limited education, I could not see a physician in the last 10 years because I didn’t have health insurance, I am food insecure, perhaps I’m even housing insecure. I cope through the use of tobacco, perhaps even alcohol, there have been some long moments of depression, or some other mental health needs for which I have never sought treatment. That interaction within the healthcare system is dramatically different from the first person I described.

If you just think about that, you’re here in this space for one thing. Maybe you’ve had angina or something, some medical condition. If we treat that without thinking about the context — the whole person and what some of the antecedent factors are that brought them to that point — then we’ve missed an opportunity. So, when I think about healthcare, I think about the environment, the socioeconomic status of the person, the household, if they have a support system, the cultural context…there’s so much that informs not just our health status, but even how we interact with the system that when we miss those, that’s when we’ve missed an opportunity to really look at the person or the community.

Van: All of these variables…is that when folks talk about the social determinants of care?

Dr. Enekwechi: Exactly.

Van: These are the things that contribute to the medical issues?

Dr. Enekwechi: Yes, exactly. I described it without using the catch-all phrase, social determinants of care. In fact, in the context of the United States, one of the most important — if not the most important — social determinant is race and ethnicity. The data and research on this is decades and decades old, and pretty deep. After you control for other variables like education or income, race remains a significant factor in predicting outcomes in healthcare and predicting interactions — positive or negative — when people interact with the healthcare system.

This country has a history that we all know, but maybe not as well as we should, of allocating resources by race. Where you live, good or bad, is determined often by race policies. Access to housing, access to mortgages, access to good education, access to food…so many things have been organized by race that to neglect its impact on health — which, of course, is determined by all of these other factors — is an incomplete look. So, while science tells us there are no genetic differences between people, any people, regardless of ancestral background, where you start to see those differences are some of the social factors that have been distributed, if you will, according to race.

Van: You make such a good point. I was in conversation with the Alzheimer’s Association and they told me that in terms of awareness of the disease, it’s highly concentrated in white communities. So now, they have a whole DEI concerted effort to reach out to diverse community organizations to bring knowledge and awareness. And if you’re lacking awareness as a first step, you then won’t be doing any more. So, the first step is to address some of the unconscious biases.

When we first met, we were actually introduced through Beth Colbert of the Markle Alliance, whom you had previously worked with in D.C., and it was specific to your interest in workforce issues in healthcare. Tell me more about that interest.

Dr. Enekwechi:  I don’t think I make big decisions without talking to Beth since she and I met while we were working for President Obama at the White House. When I told her that I was interested in looking at the workforce space in particular, she said, “You have to talk to Van Ton-Quinlivan.” She sent me your link immediately, and I think she sent an introductory note that night. It was immediate. She said “Move no further until you talk to her.”

And why was I interested in this? We’ve had major disruptions in staffing among health systems, actually, for quite a while. It’s not a new problem, but it was exacerbated by COVID. What we’ve seen is incredible burnout. It’s just a very difficult work environment, for nurses in particular.  I’ll speak in general terms, but it is nurses, typically, when we’re talking about this, although respiratory therapists and other allied professionals are part of the equation.

In our work at Welsh Carson, we’ve got a strategic partnership with a group called the Health Management Academy, which is a peer group of health system executives. I think together, they account for 90% of all inpatient stays in the country. We hear from these executive leaders that nurse staffing is a problem. There’s a shortage in the supply. There’s also a maldistribution, if you will, in the supply. You have more recently a wave of resignations and retirements due to aging of the population, but also just burnout and having better work opportunities. Layer on top of that a proliferation of contingency staffing companies that have been raising their prices so significantly that some of these hospital systems have seen 100% or 150% increases in that budget line item. It’s completely unsustainable and creating some inequities or imbalances among the workforce that are actually on the ground.

So, all of this leads to the question, “What’s the solution?” My colleagues and I started to look, and while there is no panacea for the main problem — which is that we don’t have enough nurses in the country — we also don’t have a good way of optimizing the workforce that we do have. We don’t have tech-enabled platforms that have been in use for any significant amount of time to help schedule people appropriately, to help optimize the workforce that you have within the system, within the hospital, or even within the geographic area. Predictive analytics has been non-existent, and that was another gap that we saw.

One can certainly make money investing in the travel nurse companies. There are a lot of businesses in that space. But it doesn’t solve any problem. There’s no meaningful addition to the ecosystem. So, that’s why this is hard, right? Because at Welsh Carson, we’re of the general philosophy that we don’t want to be part of the narrative of “let’s walk in and just put money towards something and collect.” There’s a real opportunity to build something meaningful. Maybe cobbling together a number of businesses, because we do have that in our ethos where you can “buy and build.” You start with one company and build it out with additional mergers and acquisitions so that you can solve additional problems. You identify and build out additional capabilities within a business. This is not altruism, right? This is capitalistic healthcare. I mean, we operate in a capitalistic system. So yes, while you build, you would also be growing the value of the company so that we generate the returns we expect to. And so that’s the interest. But it’s tough. So, we are going to be patient, and look for the right assets as we explore this investment theme.

Van: Historically, this is not the first time we’ve had a healthcare shortage. If I remember back to when I was having my son here at Stanford University, the nurses came from other countries to work at the bedside. What’s easy for corporations is to transact for talent, to transact if the talent exists. To your point about the traveling nurses, it’s the same limited pool. You’re just stealing from one pocket or one employer to put into a different employer. You’re not enlarging the pool and breaking that cycle. So, employers are ending up paying three times as much for the same person.

I’ve heard of situations where the existing worker actually quits their job, gets hired as a traveler and comes back to work in that exact same place, but gets paid three times as much. I can see how painful this is, and why it would be a number two or number three issue for every healthcare leader. So, is there a space for combining intentional workforce strategy as you make investments in companies that are in the healthcare space? How do you think about that?

Dr. Enekwechi: Yes, there is a space for that, and that’s why I don’t think it’s a short-term solution. Another platitude you hear sometimes is “all healthcare is local.” So, if you are creating major disruptions in a particular geographic area where there may be a couple of large hospitals, that doesn’t really serve anyone. As I look at this industry and think about what a solution has to look like, it has to capitalize on the existing ecology.  I’ve made a number of my colleagues read up on the ecological model. I just can’t get away from academic background. It basically says that a company or health system recruits from the existing pool of staff or nurses but can also invest in that pool. “Grow your own” is another term you might hear in health services. You can help train additional people within that pool so that they continuously renew, refresh, and people are not stretched thin.

You can intentionally build out a workforce that serves the needs of the community that is not distant from the community, that isn’t flown in from somewhere else without an appreciation for the culture, for the patients, for anything. Yes, flying them in addresses that gap within the healthcare system, but we have evidence that quality of care can be threatened by the fly-in model. That intentionality is what I think will take some patience.

We’ve got companies that sponsor nurses coming in from Anglophone countries in Africa such as Nigeria and Ghana, and just from other countries around the globe. That creates a bit of a moral dilemma, because most of these countries have health systems that are already stretched and quite limited by a shortage of supply. But we’re starting to see that happen because the pain points are so acute here. This is a well-resourced country and you would expect, after a while, people might set aside some of those dilemmas and do what they have to do to get nurses on staff. We’re starting to see that, but there’s absolutely room to be intentional about what we’re creating within communities and within regions.

Van: I’m glad you brought up the point of healthcare as local and how to create a workforce that’s not distant from the community. Because you can import a workforce, but especially with regards to healthcare and teaching, every community needs their proportional share, rather than California, for example, stealing from a neighboring state. If we don’t produce our proportional share, then I think it’s kind of a fallacy to think that we can continue poaching.

Dr. Enekwechi: I agree, which is why this is a longer-term conversation. We’re starting to see some training programs basically grow up. Health systems are creating their own nursing training programs because nursing schools cannot produce quickly enough the number of nurses we need in the country to actually meet demand. Will that solve the problem? I don’t know, because I don’t know how many of them are actually creating their own RN training programs. But why do we have this…I don’t want to say cap, but in some ways we’ve artificially capped our supply.

Apparently, there aren’t enough professors to meet the demand in terms of ingesting more students into the existing nursing schools. There are many options for the average BSN. Many don’t choose to go work on the floor of a hospital because they can do other things, or they see it as a stepping stone towards management roles. We have to really give a careful look to the supply and the different avenues that people with this nursing certification can take so that we have a full appreciation for what we need to do to meet the demand in the near and the medium term. And then, of course, we need to look long term because the need will only increase over time.

Van: I was speaking to someone who’s involved with UCLA and he said that the entirety of UCLA produces forty nurses a year. We need to be adding zeros to that on the back end, and employers need to figure out more collaborative ways of solving this problem rather than each organization tackling it on their own. The incremental approach is just not going to do what it needs to do.

Dr. Enekwechi: Yes.

Van: Major retailers like Walmart and CVS have made big moves into healthcare delivery. What impact do you think that will have on healthcare quality and equity?

Dr. Enekwechi: I think one very important thing that they’re doing is expanding access. I try to take off any professional hat when I walk into, like, a CVS health hub and just think about it from the experience as a person. You can get so much primary care at these retail locations that are open after work, so that if you’re driving home and can get there by 7:00pm or 8:00pm, you can actually see a nurse practitioner and do a lot. That has to be applauded because absent these retail locations, most people would simply forego care. Or if it was absolutely essential, painful, or acute, they would go to the emergency department. We have to recognize that one of the most important things you can do right now is to just create the space and the opportunity for people to get primary care.

At the same time, the extent to which you can use telemedicine is further expanding that access and that engagement with providers from those companies — whether it’s a CVS or Walmart — and also access to pharmacy. If you need a prescription for something they can write it, they can fill it or they can just mail it to you. So, the access portion I don’t think can be overstated in terms of the difference it’s making. When we think about the clientele at Walmart, or in many neighborhoods where CVS is located, that increased or expanded access can have a meaningful effect for communities that have typically been vulnerable or underserved.

How much that addresses health equity, I think, is yet to be seen. In a lot of Walmarts in this country, you can come out of the pharmacy, walk into the main store, buy fresh food, do your grocery shopping, buy clothes, get your glasses if you need, get a hearing test. There’s so much that you can do in these one-stop locations even beyond health that facilitates your ability to live comfortably. Walmart pioneered, I remember — you probably remember this, too — a $4 formulary. Getting all these pharmaceuticals for $4. They had the negotiating power to price at that rate, and just made it so affordable for people. I don’t remember exactly what drugs, but these are common prescriptions. I know that the head of Walmart Health right now has been working on expanding care through telehealth in addition to recognizing the importance of brick and mortar, because people do come into Walmart, especially in rural areas. So, there’s a lot to be said for the expansion of care in those locations.

Van: Well, let me pick up on your comments about telehealth and telemedicine. The uptick in adoption is one of the bright sides of the pandemic. We previously talked about care moving into the home and that’s being made more possible by telehealth and telemedicine adoption. How are you thinking about care in the home these days?

Dr. Enekwechi: We certainly see movement in that direction and a lot of investments to support the innovations in that direction. One of the things we talked about that was actually eye-opening to me — because I had thought of it but not deeply until you said it, and you said it as somebody who is not in healthcare so that made me pause — that we can’t assume that it’s an “on switch” for existing staff. If you have not been trained to deliver health in a home and you’re trained to work in a hospital or long term care facility, we can’t assume that people will just automatically know exactly what to do. You probably don’t remember saying this to me, Van. I think you just said it in passing. But it is true. It is actually quite true.

What we now see is that for a number of these newer, earlier-stage companies that are deploying health at-home interventions, there’s a good amount of training that has to come with those modalities. If you’re sending a nurse to the home, or an assistant of any sort, they have to know how to assess fall risks, for example…things that may not necessarily exist in an institutional setting. Carpets that are folded in inconvenient ways that if a senior were to fall, they would fracture a hip and that would lead to this cascade of terrible outcomes. How do you assess independence at a very nuanced level? You have activities of daily living like bathing, using the bathroom, getting up, transferring yourself, feeding yourself, that type of thing. But you also have these independent activities of daily living which are somewhat elevated measures. Can you manage your finances, for example? Can you cook for yourself? Not just feed yourself, but can you actually prepare a meal?

Assessing those criteria in order to measure whether somebody can actually reliably heal and age in place at home are going to be increased needs that we should not assume that every nurse or every clinician can do.  There’s a movement that I think we’re yet to see where tech-enabled companies are hiring nurses to work primarily remotely. A lot of women’s health companies are hiring nurses all over the country, and they’re all remote because a lot of the younger folks are quite okay with the primary mode of communication and engagement being through telehealth. So, there’s this competition for an already very limited pool of providers.

Van: It makes me wonder whether nurses actually have to perform that function? It seems like a different classification, maybe someone not so well trained as a nurse, can go out and do this fall assessment, for example.

Dr. Enekwechi: Yeah, absolutely. Different levels of staff — sometimes personal care aides, home health aides, etc can do it — but if a nurse is out there, you want the nurse to be able to do more than just administer drugs. You want the nurse to be able to do other things that they may not necessarily be trained to do right now in the home setting, which can have lots of people, noise…it’s just a very different place of work when you think about where clinicians of all levels are accustomed to working,

Van: It may be a harder environment. I spoke to someone who had run a business where they were dealing with chronic care in the home, and they were using respiratory therapists. They really had to retrain all of them from working in the hospital, and that included just having the soft skills, right? The trusted relationship was so much more important because it was in the home environment.

Dr. Enekwechi: Exactly.

Van: I want to give you an opportunity to talk about some of the state and federal healthcare policies that you’re watching. What would you love our listeners to understand?

Dr. Enekwechi: That’s actually a harder question these days than it has typically been. (laughs) This administration has been so busy on COVID, just trying to get things under control and return us to some semblance of normalcy. And even at that, we’re redefining what normal is, as we speak. I think in terms of policies, one related to COVID is that we should expect within the coming months that the end of the Public Health Emergency will probably be seen. With that, some of your listeners may know, came a lot of waivers for some of the telehealth care that we’ve just been talking about. The reimbursement for much of that was actually facilitated by Public Health Emergency provisions. Unfortunately, we will also see states begin to conduct redeterminations for Medicaid. In the PHE, Medicaid expansion came very quickly. We’re going to see a significant drop-off, perhaps up to a double-digit percentage drop. We’ll start to see people without any health insurance, which has a direct effect on how and whether they can seek and obtain care.

I think your listeners who are interested in health should be paying attention to at least those two issues because coverage is so important. How we effectively steer people to healthcare insurance on the state-based exchanges, for example, then takes on additional prominence. Those are the two that I would think of. There are others, but they’re probably more niche and more specialized. These are two high-level and important ones.

Van: Well, Adaeze, I am so grateful that you were able to spend time with us. I learned so much from listening to all your advice and counsel. And in addition, I am just cheering you on in the work that you’re doing. Thank you for breaking all sorts of ceilings and forging the way, especially in this private equity realm.

Dr. Enekwechi: Thank you. Thank you so much.

Van: I’m Van Ton-Quinlivan with Futuro Health. Thanks for checking out this episode of WorkforceRx. I hope you will join us again as we continue to explore how to create a future-focused workforce in America.