As discussed in prior blog posts, on Tuesday, November 5, 2013, Foley & Lardner LLP hosted the ninth annual FoleyTech Summit in Boston. One of the morning breakout sessions at FoleyTech featured a panel discussion of leading health care IT investors. The panel was moderated by Christopher Donovan, a partner in Foley’s Health Care Practice Group and consisted of Edward Cahill, a Partner with HLM Ventures; Daphne Katydas, a Director at BNY Mellon; Victor Kats, Investment Director and Healthcare Technology Practice Leader at Ascension Health Ventures; and Mark Tomaino, Senior Industry Executive at Welch, Carson Anderson & Stone. Panelists focused much of their commentary on the health care IT investment markets in the post health care reform era.
Panelists discussed how companies need to stay ahead of the curve to be attractive to investors, noting the importance of recognizing which markets were saturated (e.g. revenue cycle management or electronic health records), and which markets were in need of innovative companies (e.g. data analytics or personal emergency response systems (PERS)). Investors on the panel noted the need for companies to “keep it simple” in their business strategies and set out to identify specific problems and solutions that will be attractive to health care providers.
Chris Donovan prompted the panelists to consider how their investments and investment strategies were focused in the new health care paradigm unfolding within the context of the triple aim of health care reform: (i) reducing costs; (ii) improving outcomes; and (iii) increasing patient satisfaction and engagement. Panelists noted the importance of companies being able to identify key market opportunities, such as government or payor incentive programs designed to change health care provider behaviors and business practices, mandates from government authorities, or opportunities to leverage innovative health care IT solutions that bridge gaps between fractured organizational structures. The panel also cautioned that companies should be wary of short-term markets (e.g. electronic health record incentive payments), and instead focus on opportunities that project a demonstrable need over time. The panelists did not present a resounding chorus as to which of the three prongs of health care reform would be important from an investment perspective, but they were universal in their belief that success would be most contingent on companies supplying health care providers with the right solutions in the shifting paradigm of health care delivery.