During this session, McDermott Partner Jeremy Earl moderated a panel that discussed current trends in the value-based care market and considerations for investors when entering the market.
Session panelists included:
- Darren Black, Managing Director, Summit Partners
- John DiGiovanni, Investment Partner, Arsenal Capital Partners
- Mara McDermott, Vice President, McDermott+Consulting
- Chris Michalik, Managing Director, Kinderhook Industries
Top takeaways included:
- The panelists noted that value-based care is the “capital markets way” of getting providers and patients together. They are optimistic that value-based care is here to stay and will provide better care to patients, and some of the panelists shared that their firms are interested in discovering more opportunities in the value-based care market.
- The market is still going strong for value-based care, and private equity investors are keen to participate. However, value-based care is facing certain headwinds (such as legislative headwinds). Despite there being an increase in bipartisan scrutiny of value-based care in 2022, which led to value-based care moving forward at a slower pace, bipartisan commitment is here to stay for now.
- Expansion of value-based care is highly dependent on commercial payors, as well as Medicare and Medicaid managed care plans. Even if payors are willing to participate, providers would need to support value-based care and demonstrate that they are able to provide the type of patient management required to optimize it.
- Florida and Southern California have the strongest value-based care markets and certain other states are following suit. Although the markets in Florida and Southern California are saturated, with the right circumstances, providers can still find ways to differentiate. Additionally, because Florida has different types of patient populations, the dynamics of those patient populations and the care provided could act as a model for bringing value-based care to other states.
- Certain specialties, such as cardiology and oncology, may be easier to implement given the type of providers within those fields (e.g., a cardiologist may serve as a patient’s primary care provider when the patient faces certain cardiologic conditions) and the number of referrals from primary care providers to these specialties. However, all specialties could find success with value-based payment.