With health reform looming over the U.S., the healthcare industry is coming under pressure like never before to reduce costs while at the same time increase quality.
So finding companies that can do just that will take on increasing importance for healthcare investors. But identifying those companies, as any healthcare investor would tell you, is much easier said than done.
Savvy investors know they must stay several steps ahead to identify the changes that will shape the future of healthcare in the country. In that vein, here are four observations from panelists in a private-equity forum hosted by Cleveland nonprofit BioEnterprise and titled “Emerging Trends in Growth Capital.”
Behavioral Health, Interoperability and eConsent: Meeting the Demands of CMS Final Rule Compliance
In a webinar on April 16 at 1pm ET, Aneesh Chopra will moderate a discussion with executives from DocuSign, Velatura, and behavioral health providers on eConsent, health information exchange and compliance with the CMS Final Rule on interoperability.
Big data changes everything: Thanks to billions in federal subsidies for electronic health records, the U.S. will for the first time be awash in clinical data. That data will represent a “tremendous opportunity” to glean clinical insights that could finally correlate cost with quality, said Mark Tomaino of Welsh, Carson, Anderson & Stowe. Companies that figure out how to fully take advantage of all that data will be very appealing to investors.
Everybody loves mobile: Mobile is a huge growth area regardless of industry, but it offers plenty of opportunities unique to healthcare, said Doyl Burkett of Kayne Anderson Capital. But Burkett wasn’t referring to telemedicine or mobile apps that help patients and providers make better decisions. For Burkett, taking advantage of the mobile trend means finding ways to help big enterprises communicate with their customers in real time. For example, his firm recently invested in a company dedicated to helping medical groups and hospitals combat the problem of appointment abandonment with text message reminders to patients.
Wellness is a challenge: It makes obvious sense to spend a little money up front on prevention if it’ll save big healthcare dollars on chronic disease down the line. But how do you measure return on investment for wellness programs? The difficulty in answering that question is a problem for investors. Plus, most wellness programs are too “manual,” requiring an “army of consultants to implement,” said Bill Trainor of Mutual Capital Partners. “We haven’t seen anything where technology is leading the initiative,” he said. That means, when it comes to wellness companies, many investors will prefer to remain on the sidelines.
Beware the coming EHR meltdown: There are currently about 300 electronic health records companies, but expect that number to plummet to about 20 in the next few years, Tomaino said. To be successful, EHR providers must embed their systems in their customers’ workflow both clinically and administratively — and acquiring lots of customers won’t hurt either. “The ones that have the largest customer footprints will be the survivors,” Tomaino said.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Photo from Flickr user Images_of_Money
