The pandemic has had obvious impacts on the health care system. One positive impact that consumers hope will last and acquirers may want to add to their investment thesis is digital delivery.
“From a patient perspective, this is something that the patients, all of us consumers of health care who have paid more and more out of pocket for these services, have long wanted — some sort of digital delivery of health care,” says Matt Wolf, RSM US LLP director, health care senior analyst.
Health care consumers have long been told that health care can't work the same way as Amazon, Uber or banking does. And people generally accepted that.
“Now they've been thrust into it and the cat's out of the bag,” he says. “We're not going back.”
That creates a trillion-dollar question of whether or how will the current emergency waivers for virtual and telehealth reimbursement be codified into the reimbursement framework going forward. But whether or not it is, consumers are expected to want the option to continue to be available. That means health care will have to reorient itself to deliver the mass customization to that patient experience.
“It will take time, but it's certainly been pulled forward significantly by the pandemic,” Wolf says. “And if we think about it from the patient perspective, that's what they want and so we're going to see leading organizations align themselves to that. We're going to see investment and deal flow aligning towards that idea of this mass customization of a mixture of physical and digital health care for patients as it make sense to them in their care teams.”
Douglas Ghertner, IVX Health CEO, says the pandemic has added two filters to the screen that he would be looking at if he were thinking about making an investment, and that’s whether or not a business is “essential.”
At the outset of the pandemic, he says there were physician practices where investors have put leverage on a business and that business was deemed non-essential and therefore can't have physical contact with patients, so couldn’t generate any revenue.
“As an investor, one of the biggest changes is you now need to look at each of those potential investments and say, one, is this business going to be essential or non-essential if we get back to a point where we have to shut down our economy,” Ghertner says. “And then two, when you look at the scope of services that they provide, can any of them be delivered in a digital manner? And is there an opportunity to recoup or recover certain of those revenue dollars that may go away?”
Wolf and Ghertner, along with HUB International’s Blake Wiedman and Ursa Health’s Dr. Robin Clarke, spoke at the recent Nashville Smart Business Dealmakers Conference about preparing your health care company for any deal in a post-COVID environment. Hit play on the video above to catch the full conversation.