From Private Equity to Health Tech Startup, a Wharton Alum Is Ready to Improve Healthcare

Contributor: Michael Meng, WG’12
To learn more about Michael, click here.


Michael Meng is an alumnus of the Wharton Healthcare Management program, current CEO of Stellar Health, and was a guest on The Pulse, Wharton’s digital health podcast.  The new podcast includes a moderated panel discussion with Stellar’s board of advisors and goes deep on their predictions for healthcare in 2020, including M&A predictions for the year, value-based care delivery reform, healthcare interoperability, and more. Read about Michael’s journey from private equity to startup. And, as a bonus, listen to the podcast to gain insights from the Stellar Health team about healthcare trends as we begin a new decade.

Life Before Stellar Health
Leaping into the unknown is never easy, but there is something exhilarating about the adventure. For startup founders, taking the plunge is difficult, but for me, as someone who was just starting a family, and already had a lucrative career in private equity, it felt like staring off the edge of a cliff with the next step purely one of faith. My faith lay in the belief the current U.S. healthcare system needed to adapt to value-based care in order to be sustainable and one of the best in the world. 

I started my career in investment banking at Lazard Frères and then transitioned to private equity at Apax Partners, a large cap global private equity firm. At Apax, I focused on healthcare, investing across the industry from services/delivery to technology. The intellectual curiosity that arose from my early work on healthcare deals at Apax led me to pursue my MBA in the Healthcare Management Program at Wharton. 

After graduation I continued my career at Apax where I continued to dive deeper into the nuances of the broken healthcare system. While my learning persisted and motivation remained high, I felt I was not doing what I could to positively impact the industry. Making investment returns off companies growing 5-9% on a large M&A deal is fiscally rewarding, but when you hit a certain point in your career or life, you start to think about the difference you’re making in the lives of others. My guiding light and opportunity to make a difference was rooted in the promising idea of value-based care and led me to where I am today. With this idea in my mind, I took a risk to chase an entrepreneurial endeavor I was passionate about - co-founder Stellar Health alongside my Wharton classmate Ben Kraus, WG’12, McKinsey Alum Ari Brenner, and Octavian Costache, a tenured Google engineer.

What is Stellar Health?
Stellar Health started with an idea and transformed into a company with real results, changing provider behavior to drive success in a value-based care world. The goal of Stellar Health is to align the incentives between those receiving care, those providing care, and those paying for care at the most granular level. By rewarding the actual “end doers” of the work out in the field (practicing physicians and their staff), Stellar’s model would enable providers to activate in value-based care and finally reach the “last mile” - getting medical practices transformed to this new approach.

Where is Stellar Health today?
The Stellar Health platform represents over 200,000 value-based actions to be prompted to providers to complete for their patients. In 2019, we grew our employee base by five times, expanded across 12 states, and, most importantly, engaged provider users in providing the highest quality care. In a collaboration with a client in New York, providers using the Stellar Health platform improved primary care metrics, such as the completion of breast cancer screenings which improved their quality performance by 60% in less than six months.  As a result, over 200 breast cancer screenings were completed enabling Stellar Health provider users to catch early stage breast cancer.

From Private Equity to Startup CEO
Beyond population level results and business growth, what motivates me is my hands-on experience in the startup environment, specifically, speaking to the “doers.” These are the individuals who are working tirelessly to care for their patients. When visiting a downstate NY practice, I witnessed a medical assistant cry out of joy when my team delivered her monthly incentive payment. It was the difference between making and not making a car payment for the month. Stellar Health is considered a tech company, but the ability to motivate people and make them feel valued to the point where they can make sure that extra colorectal cancer screening gets done, or the diabetic patient doesn’t miss a medication refill, that’s what our product is about.

It is obvious that private equity is very different from being a health tech startup CEO, but some of my learnings have been eye-opening: 

  • Leadership isn’t about some inspiring speech every so often, but rather showing up every day, caring and serving all the people that work for you.
  • Private equity, even at the larger firms, is about small focused groups executing at a high level. In my transition to the operating side I’ve quickly come to learn that what really determines your success is the ability to drive people from diverse backgrounds and functional areas to a common mission. 
  • Investing is a long-term game and not just working from deal to deal. This point has become more true in operating and leading a company. There are thousands of items to get done in a short amount of time, but you need to pace yourself and keep an eye on sustaining for the long run.
  • Selling a real product or business service is quite different than getting a deal done or a project engagement. It is more about delivering the entire organization and all its diverse functions, to the customer. They’re buying the trust in you and your entire organization. 
  • Lastly, you really need to care about your employees in an operating company. And this isn’t just about performance, but rather their whole lives: how things are going at home, what else is going on in their lives, and how we as a company can help. This translates into a high performing culture, which ultimately leads to increased success of the company.

You Can’t Take the PE Thinking Out of the Executive.
Many of the skills and thinking gained from private equity continue to serve me well. I believe I now have a unique perspective when thinking about Stellar’s relationships with investors. I don’t view it as a capital vehicle to grow the company, but rather a commitment of return on investment to a trusted partner. Another skill gained from my time in private equity is the importance of recruiting and retaining top talent. I do this now at all levels within Stellar Health, as opposed to a broad level in private equity. I’ve found the same private equity mindset, from finding leverage points to driving scalability and effectiveness, applies to operating a successful business as well. 

What‘s Next?
I have continued to focus on growing Stellar Health alongside my co-founders and the incredible team we have built. I understand that in order to create something great, you need to stick with it for a long time to realize the compounding effects. I also believe you need to be in the business for at least 10 years to really reap the rewards and returns possible. If Stellar Health executes on its vision, I know it will have truly transformed healthcare and made a significant impact in an industry that needs change.


Contact Michael Meng at:
[email protected]