Why You Need to Act Now on Healthcare Investments

Healthcare is on the fast track to becoming 20 percent of U.S. GDP. Great Point Partners’ Adam Dolder says the time to invest is now.

Healthcare spending currently comprises between 15 and 17 percent of U.S. gross domestic product, and with spending growth projected at an annual rate of as much as eight percent, there may never be a better time to invest.

“It is one of the true sectors that has sustainable growth drivers,” explains Adam Dolder, managing director of Greenwich, Conn.-based Great Point Partners.

In fact, Dolder estimates healthcare will carve out as much as 20 percent of the U.S. GDP before 2020. He cites three primary reasons: health insurance coverage continues to expand, which brings more patients into the system; the public supports further participation; and the sector is proving to be relatively recession-proof.

Dolder also points to the convergence of healthcare with the consumer sector. Patients are becoming increasingly cost sensitive as copays and deductibles steadily rise. That’s driving alternative delivery models—think urgent care centers vs. emergency rooms.

“This makes the consumer investor more active in the healthcare industry,” says Dolder.

This kind of value-based care is also forcing providers to innovate. That, in turn is creating interesting investment opportunities for private equity. For instance, Great Point Partners invested in Citra Health Solutions, a technology-enabled population health management and care coordination provider. Citra’s platform helps providers navigate the new reimbursement landscape.

“Anytime an investor looks to put capital to work in healthcare, he or she will need to consider how the product or service fares in a technology-based world,” Dolder explains. “There are enormous opportunities.”

To learn more about deal flow dynamics and the intricacies of what are driving transactions in healthcare today for private equity investors, we encourage you to attend Privcap Game Change: Healthcare 2016 on Nov. 17 at the New York Marriott Downtown and participate in the breakout panel discussion “What’s Driving Healthcare Private Equity Deal Flow?” where Adam Dolder will be a speaker. Register now.