Overview
Partners Julia Boyd, Marshall Jackson, Jr., and Gregory Metz explored the increasing investment activity at the intersection of education and healthcare during a recent panel that featured Dina Said Dwyer, founder of Eden Capital Management LLC, and Sam Shah, senior managing director at Macquarie Group. They each shared invaluable insights into the strategies and trends propelling growth across these converging sectors, and throughout this article we highlight key themes and perspectives from the discussion.
In Depth
AGING POPULATION DRIVING INVESTMENTS AT THE INTERSECTION OF EDUCATION AND HEALTHCARE
One of the primary driving forces behind the surge in healthcare education investment is shifting demographics, particularly the aging population, which is creating a rising demand for healthcare services. This demand not only necessitates more accessible and scalable delivery models but also amplifies pressure on the healthcare workforce. As the population ages, healthcare workers are also nearing retirement, leading to a decline in experienced professionals and exacerbating staffing shortages, widening the gap between supply and demand.
Investments in this area are predicted to focus on rebuilding and strengthening the healthcare workforce. A notable trend is the rise of entry-level training programs designed to eliminate barriers and make healthcare education more accessible, enabling the industry to recruit a larger pool of individuals and lay the groundwork for future healthcare jobs. Concurrently, specialized training and upskilling programs are also on the rise, particularly in critical areas such as digital health, elder care, and behavioral health. As more individuals are drawn to healthcare careers, the resources allocated for training, educating, and recruiting these individuals are yielding promising results, effectively replenishing the workforce and addressing the significant gaps created by an aging population and retiring health professionals.
EMPHASIS ON MENTAL HEALTH ALLOCATIONS; RIPPLE EFFECTS OF SPECIALIZED CARE
With an increasing prioritization of mental health across all life stages – from early childhood through K-12, higher education, and into the workplace – opportunities for companies revolutionizing the mental health industry are at an unprecedented high. Investors are backing businesses focused on prevention, early intervention, and the reinforcement of positive psychology.
As the demand for mental health training and professionals escalates, there are concerns this could lead to fragmentation of care in the market. While specialized healthcare professionals (in mental health and beyond) bring essential skills and expertise to treat specific conditions, these specializations can inadvertently draw skilled workers away from the role of general practitioners, who are particularly vital in rural or underserved areas. To fully harness the potential of investments in this sector, a balance must be struck between specialization and accessibility.
REGULATORY CHALLENGES ON THE HORIZON
Over the past decade, the market has seen a notable shift toward privatization of funding in education and healthcare, with an increased reliance on corporate funding and philanthropy. While regulations in these sectors have historically been dynamic, the primary concern now is the adequacy of funding in this evolving landscape. As the model shifts away from government funding, the challenge lies in identifying private funding sources that can sustain the demand for development, infrastructure, and growth.
This transition presents both opportunities and challenges. On one hand, private capital can approach industries more nimbly, targeting subsectors and scaling innovation to offset reductions in government funding. On the other hand, a move toward a fully privatized model risks undermining the critical role that the government has traditionally played in driving public investments to support broader societal goals. For instance, studies have shown that early childhood programs are crucial determinants of health and well-being for a child’s future. While data demonstrates the effectiveness of these programs, it has been challenging for private investors to replicate such roles on a larger national scale.
As the regulatory environment continues to evolve, the challenge will be to find the right framework that fosters public-private partnerships to encourage innovation and inclusivity within healthcare and education.
TRENDS IN EARLY CHILDHOOD AND K-12
Even amid economic uncertainty, from the COVID-19 pandemic to recessions, investments in early childhood education have remained resilient. This stability stems from a consensus that early learning is foundational to cognitive and social development and long-term health. There has been an uptick in models that adopt a more informed, individualized approach to child education, incorporating developmental screenings, behavioral assessments, and a focus on health. Health education centers for children with special needs are also becoming increasingly effective as healthcare professionals foster deeper partnerships with educators. Investment activity has surged in professional development for childhood education providers and in the acquisition and scaling of childhood centers to deliver more holistic education. This includes equipping educators with the training and resources necessary to address the unique challenges posed by technology and social media, which can have profound effects on children’s mental health.
As the focus transitions from early childhood to elementary and high school education, investment models are increasingly directed toward safety, security, and mental health. The rise of cyberbullying and school shootings has opened avenues for solutions aimed at protecting the safety and mental well-being of future generations. Investments are channeled toward technologies, programs, and policies designed to create safer environments and equip schools with resources to mitigate the prevalence of cyberbullying and violence while providing access to mental health and other health resources.
MANAGING THE SUPPLY AND DEMAND OF HIGHER EDUCATION PROGRAMS
Higher education institutions responsible for training healthcare professionals face opportunities and challenges in meeting workforce demands. Developing clear pathways to employment that illustrate the return on investment for students is crucial to attracting and retaining talent. Collaborations between universities and healthcare providers are playing a significant role in this regard. Retention efforts have focused on businesses that offer software solutions that allow colleges to streamline class management and foster student engagement, alongside mental wellness programs designed to help students manage stress and emotional demands effectively, thus preventing burnout. Investors have recognized various businesses that enhance operational efficiency within these institutions, including board review and exam preparation services.
INVESTMENTS FORECAST: TECHNOLOGY DRIVEN
Technology is transforming healthcare education, unlocking opportunities to enhance quality, increase inclusivity, and drive cost efficiency. Private capital is flowing into tech-enabled solutions at a remarkable pace.
Access to education has been revolutionized by the advent of online and hybrid programs, allowing educational institutions to deliver high-quality programs virtually anywhere. This transformation has been particularly beneficial for rural and underserved populations, as well as for students requiring greater flexibility. Additionally, simulation-based learning in medical fields has gained popularity, enabling students to receive clinical training and gain competency in a safe environment before engaging in in-hospital training. The rapid evolution of artificial intelligence (AI) promises further transformative effects, including adaptive learning platforms for students and professionals. On the clinical side, AI will enhance health education through information synthesis and decision-making tools.
Moreover, technology has facilitated greater inclusivity in clinical trials through decentralization. The ability to remotely collect data and communicate via telehealth allows for a broader scope of trial participants, resulting in greater data diversity that enhances education and research in treating populations and delivering appropriate care.
Technological advancements also have improved treatment and diagnostics. Innovations such as telemedicine provide virtualized and often immediate care to patients who might otherwise endure long waits for local doctors or forego treatment altogether because of uncertainty. Wearable devices, such as rings and watches, offer health monitoring and deliver real-time feedback to patients, along with education and insights into their health data. These tech-enabled solutions empower patients to take a proactive approach to their health through education.
