Over the last decade, we’ve seen numerous shifts in how we deliver and consume healthcare. While many of these changes have been percolating in the healthcare landscape for a long time, the COVID pandemic accelerated several trends that we believe will continue to reshape the healthcare industry for the long-term. Summit's Darren Black shares his perspective below.
A Dramatic Movement to Value-Based Care
The healthcare cost equation has long been a focus across the healthcare landscape. Providers and payors are working to reduce costs and stabilize reimbursement rates while delivering ever-improving patient outcomes. We believe value-based care can support these goals, but the transition to these models has been slow historically in many regions of the U.S. Value-based models have, however, gained a significant foothold in markets such as South Florida, Southern California, Arizona, Puerto Rico and Texas – and we saw many value-based provider organizations in these areas perform relatively well during the COVID crisis and subsequent economic uncertainty. I believe this is driven by three key factors. First, value-based care organizations benefit from reimbursement models that are not tied to office visits, which saw a dramatic drop-off during COVID, but have bounced back significantly since that time. Second, these organizations have aligned incentives to encourage broader usage of primary and related care to prevent more expensive specialist and hospital care. Third, value-based providers have an established care coordination infrastructure designed to help connect with and deliver care to the most vulnerable populations in their networks. Chronic illness and underlying conditions contributed to the huge variability in intensity and progression of COVID in individual patients, really underscoring the need to manage these conditions on a more proactive, preventative basis, which is always a better approach. I believe value-based care can be incredibly effective on this front.
Telemedicine is Here to Stay
While telemedicine has long been viewed as a common-sense way to improve access to healthcare – in particular, for patients seeking care from home or rural markets with limited in-person options – the potential for remote delivery had long remained largely untapped. The onset of COVID fueled a significant, rapid transition to telemedicine that would have been unlikely to otherwise occur. Patients and providers alike quickly grew more comfortable with the experience, convenience and the technology – and, together with structural changes in reimbursement – has created what I think will be an enduring change. We’ve continued to see telemedicine playing a bigger and more permanent role in a number of healthcare specializations, creating better access and increasing clinician capacity. And we’ve certainly seen telemedicine serve as a cost-effective, yet effective mode of healthcare delivery in many situations.
Uncertainty Will Fuel Continued Consolidation
Smaller, independent physician practices were hit especially hard hit by the pandemic and the related changes in patient behavior. In many ways, the COVID crisis gave us a new understanding of what it means to be an essential healthcare service; prior to COVID, it was impossible to imagine a situation in which patients would outright stop seeing their clinical, ancillary and dental providers of care for months, if not years at a time. Yet, this situation became the reality for a prolonged period of time – and in many cases, the volume of in-office visits still has not fully recovered. For many “mom & pop” practices, I believe the insecurity of their pandemic experience has led – and will continue to lead – many independent providers to consider joining forces with a larger organization. I believe consolidation really makes sense for a number of specialist areas, especially where the consolidating organization can offer market power in negotiating reimbursement rates, centralized billing and IT infrastructure, referral programs, and other resources. This kind of stability helps providers navigate tough times and helps to ensure that they can devote more focus on delivering care overall.
Read more about practice management platforms backed by Summit, including US Health Partners, LifeStance Health, Independent VetCare, DentalPro, MDVIP, BluePearl Veterinary Services and National Veterinary Associates.
Summit has invested in more than 120 healthcare companies since 1984. We seek to partner with category-leading organizations and talented executives across the healthcare ecosystem who are committed to making a meaningful, positive impact on the healthcare value equation.
Don't delete this element! Use it to style the player! :)
The content herein reflects the views of Summit Partners and is intended for executives and operators considering partnering with Summit Partners. For a complete list of Summit Partners portfolio companies, please click here.
Stories from the Climb
At Summit, it’s the stories that inspire us – the problems being solved and the different paths each team takes to grow a business. Stories from the Climb is a series dedicated to celebrating and sharing the challenges of building a growth company. For more Stories and other Summit perspectives, please visit our Growth Company Resource Center.
Subscribe to our newsletter to stay up to date on our partners, portfolio, and more.