[co-author: Amy Roeder Norris, Managing Director - Corporate & Securities Practice Group]
Investors’ interest in healthcare continues to grow and healthcare-related deal flow in private equity appears to be at an all-time high. On November 5, Bass, Berry, & Sims member Tatjana Paterno moderated a Kayo Women in Healthcare and Finance Pop Up discussion with leading female senior executives and investors in the healthcare industry, including: Emily Cook, Chief Clinical Operations Officer at Aspire Health; Anna Kovalkova, Partner at Pharos Capital Group; Jessica Perez, Partner at Deloitte & Touche; Theresa Sexton, Partner at Claritas Capital; and Teresa Sparks, Executive Vice President and Chief Financial Officer at Envision Healthcare.
Panelists shared insights on navigating investments in healthcare today – from data-driven innovation and technology advancements to patient experience, value-based care, and more. Here are a few key takeaways from the discussion.
- Panelists highlighted several factors driving the continued growth in healthcare investments, such as:
- Increased awareness across generations of rising healthcare costs.
- Growth of the country’s aging population.
- Creativity with alternative payment models.
- Advancements in data analytics and technology.
Panelists believe that these factors, among others, are likely to drive continued vitality in the healthcare sector.
- Nashville has a strong and growing reputation nationwide as a “healthcare hub.” Companies based in Nashville have paved the way as healthcare integrators, such as HCA. Panelists discussed several business accelerators in Nashville, similar to the West Coast, and expect to continue seeing the emergence of disruptive models, like Walmart Health.
- The transition from the fee-for-service model to a value-based care model has driven re-orientation activity for many companies. Panelists discussed the value-based care approach, which focuses on patient care and outcomes and can mean different things to different participants in the healthcare eco-system.
- Innovation in healthcare continues to drive creativity and disruption to traditional models and reducing costs, but new models can face resistance from established businesses and can be difficult to implement. Balancing investor and company interests continues to be a challenge and focus.
- Although certainly not unique to healthcare and private equity, panelists highlighted the importance of relationships, transparency, and strong management teams. Valuation is important, but having good relationships and strong management teams cannot be secondary.
- When it comes to building a successful business, it is imperative to know the business case and industry inside and out. Experienced board members can add tremendous value. Having a vision and being laser-focused on a defined universe of issues to address each year can help companies succeed.