With the uptick in the pace of vaccinations and lifting of restrictions in many states over the past few weeks, a clearer picture of the road ahead is coming into focus. In a timely discussion, Los Angeles’ Association for Corporate Growth (ACG) hosted healthcare industry leaders to share lessons learned over the past year, what’s here to stay, and what’s on the horizon. ACG dubbed the panel “Coming up for Air: Healthcare Investing and Growth in 2021 and Beyond,” which featured leaders from various healthcare sectors, including Shane Armstrong, President and General Counsel at American Vision Partners (AVP); John DiGiovanni, Investment Partner at Arsenal Capital; and Rob Mahan, CEO at Exer Urgent Care. The panel was moderated by Aytan Dahukey, Partner and Private Equity Team Leader at Sheppard Mullin and Adam Abramowitz, Managing Director at Intrepid Investment Bankers.
Here are three key lessons and takeaways from the panel:
(1) Learn to Swim
In March 2020, the industry confronted a once-in-a-lifetime pandemic. Hospital beds and intensive care units were coping with an influx of sick patients, while the rest of the industry came to a screeching halt. Shortages of protective equipment, unclear and sometimes conflicting safety guidance, and regulatory uncertainty forced many practices to furlough employees and reevaluate their business models. Provider groups needed to keep their staff and patients safe as well as maintain revenue streams without falling into the myriad of regulatory traps – violations of HIPAA, telecommunications laws, telehealth regulations, restrictive lockdowns, etc.
Some healthcare providers sank, while others perfected their backstroke. The panelists recalled their initial existential questions, doubts, and how the ultimately found opportunities for growth.
The panelists highlighted how different sectors faced their own distinct challenges. For example, comprehensive ophthalmology practices wrestled with the often murky distinction between elective and emergent care; urgent care groups focused on using technology to optimize safety protocols and patient experience; and, applied behavioral analysis therapy providers had to expand their service offerings to continue supporting children with autism spectrum disorder and their families.
The panelists also found and capitalized on opportunities to expand their businesses, refine their operations, and embrace the forces of change. Armstrong from AVP shared his initial gut reaction to slow down the business’s acquisition-centered growth plan, but how his team pressed ahead finding ways to expand through strategic acquisitions of provider groups looking to leverage a scalable infrastructure. Mahan from Exer lauded his company and team’s successes in embracing new practices and technologies as well as finding ways to make contact with and retain new consumers. DiGiovanni discussed Arsenal’s client Hopebridge’s steadfast commitment to serving children with autism spectrum disorder, which meant re-imagining how to provide therapy and support for children and their families and retain top talent in a competitive market throughout the crisis.
(2) Exciting Horizons
Looking ahead, the panelists were eager to discuss what’s on the horizon for their businesses. They, of course, noted the rise of technology-enabled tools, data-driven decision-making, revolutions in telehealth, and the rise in value-based care—all of which we have discussed in depth on this blog. However, they also gave more intimate looks at their core businesses. Armstrong mentioned exciting developments in eye care – including time-lapsed drugs that improve patient compliance and promising new bladeless procedures. Mahan looked forward to finding the optimal balance between in-person and remote care in a post-COVID-19 world. Finally, DiGiovanni was eager to follow the rise of consumerism in healthcare, which has allowed patients to take charge of their care, expenses, and actively engage in the market.
(3) Never Underestimate the Basics
Though the panel emphasized innovation and forward-thinking, panelists emphasized that perfecting the basics goes a long way. The healthcare system is complex, fragmented, and often frustrating to consumers, providers, experts, and investors alike. No hot new trend, whether it be a technological innovation or revolutionary payor model, will ever substitute delivering quality, affordable care.