Analyzing Current Healthcare Trends & Their Relationship to Private Equity

Healthcare investing is experiencing a gold rush — thanks to the explosion of investments in healthcare technology since the onset of the COVID-19 pandemic. 

Scott Becker, Partner at McGuireWoods and the Founder and Publisher of Becker’s Healthcare, joins the podcast to share insights on healthcare technology investments.

Investments in healthcare technology have been fruitful for venture capitalists and private equity investors over the last few years and that has only accelerated through the pandemic.

Scott has also seen a movement toward practice-type investments — with lots of investment in provider-driven transactions, such as group practices, orthopedic specialties, dermatology, dental and more.

There are two other big trends looming; one is the investment in value-based businesses and models and the other is the notion of investors moving toward asset-light business versus asset-heavy business. 

Listen to the full episode as Scott discusses the trends of healthcare private equity investing and venture capital investing before diving into three issues the health systems are facing, including the competitive pressures hospitals face and the race for COVID-19 vaccines.

Featured Experts

Name: Scott Becker 

What he does: As a partner at McGuireWoods and CEO and Founder of Becker’s Healthcare, Scott takes his experience in the healthcare industry and turns it into digestible information for private equity investors. 

Organization: McGuireWoods

Words of wisdom: “What I find interesting is these venture funds, these private equity funds, some of which have a few billion dollars under management, some which have a billion dollars under management, no less, have made a hugely outsized impact in the healthcare technology space. I find it far more fun to watch those, then the Googles, the Amazons, the Apples and so forth. Those are always going to be big players. They've got so many resources.”

Connect: LinkedIn

 

Acquired Knowledge

Top takeaways from this Across the Table episode 

★    Subscription-based services are the new “gold standard.” Recurring revenue is attractive and when charging on a subscription basis, revenue won’t change depending on if a surgeon had a busy day or not. Subscriptions fit well with shifts towards value-based healthcare.

★    Asset-light businesses are more technologically scalable. Asset-light businesses focus on connecting the assets and resources rather than owning them, which makes for more solid profit margins, according to Scott.

★    Health systems face growing competition as the #1 call for patients. Hospitals have seen competition come from the internet and urgent care centers. In order to maintain their patients’ prioritization, hospitals must be more responsive to their patients.

 

Episode Insights

[2:44] Healthcare investing today: Scott expands on the success of venture-based investments and private equity investments. He explains how this relates to the explosion of healthcare technology and digital investments.

[6:40] Moving with an impact: Scott digs into why watching venture funds move into healthcare technology is more interesting to him than watching Big Tech and how those venture funds leave their mark.

[9:14] The gold standard: Scott explores value-based care before and during the pandemic and the “gold standard” of...