The next in our series of posts sharing key takeaways from panels at the Healthcare & Life Sciences Private Equity and Lending Conference focuses on opportunities for investment in primary care centers. It is authored by our colleagues Holly Buckley and Josh Reynolds.
According to experts who spoke on a panel at the 15th Annual Healthcare and Life Sciences Private Equity and Finance Conference on February 22nd, 2018, the practice of primary care is changing, which allows for investors to implement certain innovations to facilitate these changes. Smart investors can provide support to clinics, physicians and even patients in order to run a better and more profitable practice.
Experts included Todd Squilanti, Managing Director, InTandem Capital Partners; John Pircon, Vice President, New Harbor Capital Management, LP Arion Robbins, Principal, Revelstoke Capital Partners LLC; Susan Ford, President, Semma Health; and Marc Cabrera, Co-Head of Healthcare Investment Banking, Oppenheimer& Co. Inc.
Here are five key points from their discussion:
1. Primary care practices remain appealing for investing due to the size of the industry, the current high rate of fragmentation, as well as the opportunity for innovation within primary care practices, including the implementation of new delivery models, and concierge medicine.
2. The current patient mix who visit primary care physicians is in a state of change due to evolving demographics. New millennial patients do not want the same doctor as their parents and their health care preferences are much different. As for the growing elderly population, ease of access is now an emerging area where clinics are focusing on delivering prescriptions directly as well as providing transportation to and from the clinic.
3. Primary care physicians are starting to play a greater role as care coordinators, and investors can bring resources to these practices so that the physicians can provide efficient coordination. For example, a practice can arrange for a specialist to be present at the primacy care clinic once a week to see patients rather than either referring outside the clinic or hiring a specialist full-time.
4. The future success of primary care practices will depend on changing patient behavior. Getting patients away from urgent care clinics when symptoms have become dire and having them examined at a primary care clinic will put less strain on urgent care centers and emergency rooms. The sickest 10% of patients account for 35% of total healthcare costs.
5. Opportunities exist to actively engage patients which can lead higher collection rates. One option is to promote price transparency through primary care physicians talking directly with patients on pricing. Many clinics struggle with collecting the patient portion of bills, and part of this issue may be due to the lack understanding of the treatment price at the time the patient decides to obtain treatment. The panelists discussed how the best person to communicate the price of a procedure to a patient is their primary care physician.