Ryan A. Bailey is the head of investments at Children’s Health System of Texas, where he oversees $1.5 billion in assets. As the hospital's inaugural investment officer, he was tasked with establishing and building its investment office from scratch. In this interview, Bailey discusses the three main areas of change that would foster a health care system of institutional quality; why he favors diversified strategies and other strategies that are uncorrelated to the market; and why hospitals are set to be more active in the alternative investment space.