Overview
During this session, Chairman Ira Coleman moderated a panel that discussed the economic and market challenges the healthcare private equity (PE) industry will face in 2023 and beyond.
Session panelists included:
- Alex Albert, Founding Partner, Patient Square Capital
- Amy Christensen, Partner & Co-Head of Healthcare, The Vistria Group
- Michael Dal Bello, Partner, Curewell Capital
- Paige Daly, Partner, Harvest Partners
- Jeremy Gelber, Senior Managing Director, Centerbridge Partners
In Depth
Key takeaways included:
- Healthcare PE firms’ investment policies should still be centered around improving patient quality of care and well-being. PE firms and management teams will need to stay ahead of the curve and can do so by investing in technology that will help further these goals. Additionally, PE firms should be creative in their investment strategies and proactive when identifying and approaching investment opportunities as capital providers.
- Exit strategies for healthcare PE firms are shifting because of changes in the economy. Now, PE firms should focus on investing in solid businesses that have defined goals and strong business practices. To that end, it is crucial that PE firms have a clear idea of what the business profile should look like at the exit and then work backward to make their investment choices.
- Behavioral health continues to be a growing subspecialty; in part due to a decrease in the stigma surrounding mental health care and treatment, as well as an increase in access to care created by COVID-19 and the resulting expansion of telehealth services. This growth is predicted to continue as new legislation makes its way through Congress.
- Artificial intelligence (AI) is predicted to continue impacting all sectors of healthcare, with some of its strongest impact thus far seen in healthcare services and healthcare IT. Not only will AI increase the efficiency and quality of care provided to patients, but it will also impact revenue cycle management because it will reveal efficiencies, allowing companies to capitalize on them and improve existing processes for day-to-day operations. Likewise, AI will also help with the constraints placed on labor in the healthcare field and ultimately change how staffing is approached.
- Looking ahead to the rest of 2023, the panelists predicted that deal activity will continue to trend upward. PE firms will need to be creative in finding ways to navigate this rise in deal activity. If they focus on investing in strong companies that are improving health outcomes and access to care, exit paths will naturally reveal themselves.
