HealthTech solutions for providers

The challenging market dynamics impacting healthcare providers create numerous, attractive HealthTech investment areas to consider. While hospital M&A volume has slowed over the past couple of years and well below the six-year high watermark in 2017, broader consolidation and system realignment remains active in today’s post-peak COVID environment amid well-documented, ongoing margin pressures and staffing issues. Additionally, well-capitalized systems continue to aggressively invest across the provider continuum (e.g., outpatient, primary care services, post-acute services) as well as into managed care solutions – effectively expanding market presence and providing much needed cost-effective and coordinated healthcare services to patients. Opportunity for technology vendors to deliver value in support of providers facing associated challenges presents various investment opportunities to drive solutions and integration. Furthermore, as payers consolidate – most recently via the pending Elevance Health acquisition of Blue Cross and Blue Shield of Louisiana (Cain Brothers advised BCBS of LA) – efficient and differentiated technology solutions selling into providers becomes more important, in part due to payers’ appetites to build or acquire mission-critical capabilities across the ecosystem and the general market position of consolidating payers.

With respect to these provider challenges, select HealthTech investment areas to consider are highlighted below as part of representative themes associated with these challenges per the following three broader categories: Platform Unification & Optimization, Operational Alignment & Controls, and Non-Clinical & Administrative Support.

Platform Unification & Optimization: Significant healthcare provider investments in clinical and non-clinical IT systems, which are often disparate across an IDN or sites of care, require requisite IT expertise and ongoing support, and ROI achievement (given capital & expense outlay / commitment), along with competing annual budgetary dollars across. Demand for these elements is likely exacerbated via consolidation, provider services market expansion, and overall staffing shortages (which extend beyond clinical staffing and into HIM, IT and project management departments).

• Digital and professional IT consulting services supporting EHR & ERP initiatives, including system implementations and conversion, as well as functional usage and overall maximization
• Health information management staffing and solutions ensuring consistent clinical documentation workflows, comprehensive and accurate records, and intelligence for decision making including patient care and internal resource allocation
• Data management and exchange solutions supporting compliance, medical data viability and access, and reporting

Operational Alignment & Controls: Appropriate clinical staffing levels across the enterprise have become more of a challenge due to wage inflation coupled with demand and supply of qualified labor. HealthTech staffing-related vendors typically have codified expertise according to specific staff type and/or sites of care, and such platforms are typically leveraged more extensively, creating opportunity for targeted, purpose-built solutions. Additionally, ongoing requirements to improve compliance and generate savings dovetails with increasing exposure and high expense levels associated with employees and commercial partners as Governance, Risk and Compliance (GRC) remain a top priority for healthcare providers.

• Workforce and human capital management solutions optimizing or streamlining staffing and associated support through various modules, including hiring & onboarding, scheduling, utilization, payroll, benefits administration, and the like
• Employee and vendor compliance, training, and management solutions support onboarding & assessments, licensing & credentialing, attestation, monitoring, reporting, auditing, and invoicing, among other activities, as well as vendor benchmarking in association with contracting & procurement

Non-Clinical & Administrative Support: The opportunity to improve providers’ non-core healthcare delivery functions generates bottom-line results, while enabling providers to focus their attention and resources on critical areas impacting patients and outcomes. HealthTech’s value-add in this category extends beyond automation capabilities (which are important to drive efficiencies and a critical component across the sector) and entails leverageable solutions to shift internal obligations of non-clinical (yet highly impactful) areas to specialized third-party partners to generate measurable results and/or manage complicated workflows.

• Revenue cycle solutions include varying models (i.e., end-to-end vs. point solutions) and span software and techservices, often aligned by provider type, in support of efficient, consistent, and optimal revenue identification and collection
• Expense management and supply chain analytical solutions support cost levels, expense & capital commitments, budgets, working capital, and other important matters via quantitative and intelligent insights spanning the provider system and corresponding suppliers, contractors and vendors
• Managed care contract management and related services support critical payer relationships via evaluating, managing, and negotiating contractual terms and associated network/scope and revenue cycle aspects within the appropriate frameworks, including value-based arrangements and related opportunities

There are many avenues to consider as it relates to HealthTech investment opportunities in support of various challenges providers face and will likely continue to deal with going forward. It remains an exciting time in HealthTech as industry transformation and innovation help lead the charge.

For more information

Visit www.key.com/cainbrothers to learn more.