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3 big areas for new, profitable healthcare investment


Kapila Ratnam,  a partner at NewSpring Capital and NewSpring Healthcare, identifies and discusses  in MedCity News three areas of healthcare with big investment potential:

Behavioral Health

“According to the National Institute of Mental Health, approximately 10 million people experience a serious mental illness in a given year that substantially interferes with or limits one or more major life activities – evidence that behavioral health services are becoming increasingly necessary. While financing options for these services continue to improve,…the lack of available behavioral health service options is creating a growing demand. In fact, many people today with mental health issues are not receiving the proper treatment they require.”

“The  space has continued to see a number of growing opportunities since the introduction of legislative moves…. Additionally, regardless of this year’s election outcome, many aspects of the behavioral health market won’t change, making it appealing for prime investments in the near future.”

Home Health

“To combat the high cost of healthcare, we are starting to see a much-needed shift from a fee-for-service to a, which focuses on the quality of care that patients receive, rather than the number of services billed. Therefore, many providers are now being rewarded for keeping patients out of the hospital, which is the most expensive point of medical intervention, whereas the home is the cheapest. As this shift takes effect, providers are now incurring more risk, so it’s critical to establish home health networks that are efficient, safe, and convenient for patients out of treatment.”

“As investors, we are interested in the most cost-effective and care-effective home health services. Specifically, connected health technologies such as mobile apps, sensors and wearables that help patients proactively manage their health, offer tremendous investment opportunities.”

Big Pharma Outsourcing

“The pharmaceutical industry is currently battling a mounting number of issues, including shrinking profit margins, heavy competition, a cost-heavy structure, increased regulatory pressure, growing expenses, and more. Faced with these challenges, Big Pharma has shifted their business models. More specifically, they have embraced outsourcing as a way to drive economies of scale without hindering their operations. ”

As private equity investors, {we find that} the explosion of outsourcing over the last 10 years has created promising opportunities. We find the most value in companies that focus on cost saving initiatives for big pharma companies, provide a niche service — such as software — that either allows sponsors to access real-time data on clinical trials, or better manages patients or data or both. ”

To read the full article, please hit this link.

Shortage crisis in mental-health care


Herewith a look at the where and why of America’s shortage of mental-health clinicians. That shortage, of course, leads to a higher incidence of more obviously “physical illness”.

Consider that {m}ore than half of U.S. counties have no mental-health professionals and so ‘don’t have any access whatsoever,’ according to Thomas R. Insel, M.D., director of the National Institute of Mental Health, told The Washington Post. Most of the severely underserved areas are in the South and West.

“Nearly one in five adults — about 43 million people — had a diagnosable mental disorder within the past year. For nearly 10 million, the condition was serious enough to affect their ability to function day to day. Millions of adolescents also struggle with a debilitating mental disorder,” The Post said.

“Many people have become eligible for mental-health coverage under the  Affordable Care Act. Yet finding the professionals to deliver that care is increasingly tough.”

“Experts cite inadequate reimbursement from government and private insurance plans as one factor.

“‘A medical student leaves medical school and residency with the same amount of debt no matter their specialty, yet primary care and psychiatry are professions with some of the lowest annual salaries,”‘ Chuck Ingoglia, senior vice president for public policy at the National Council for Behavioral Health, told the newspaper.

‘”If you look at the valuation for an hour of therapy, you could say we pay plumbers, carpenters and handymen more than we pay for behavioral health,”‘ said  Paul Gionfriddo, president of Mental Health America.


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