Healthcare drivers that private equity should be aware of

By Chris Gauld, director, Equator – A positive repercussion of Covid-19 has been the massive uptick in the interest in healthy activities and healthy living. Exercise equipment sales in the UK have spiked 5,800 percent during the pandemic, while corporate wellbeing investments, ranging from free gym memberships through to mental health and general wellness services, are on the rise too. 

It’s not all been positive though. The NHS and private practitioners found themselves unprepared for remote and digital servicing when the lockdown restrictions were first introduced. 

 As the vaccine roll out continues and the light at the end of the tunnel shines just that little bit brighter, it’s never been more important to consider what’s driving demand in healthcare and what a sustainable, winning approach may be. Whether it is focusing on preventative care as the preferred prescription, or the changing needs of an ever-increasing elderly population, investors need to be aware.  

The sector-wide rush to digitisation  

National lockdowns, health panics and homeworking created an overnight shift in demand for remote and digital servicing. The healthcare sector, however, was one of the least prepared, with both the NHS and private care providers rushing to find workable digital solutions.  

Just over a year later, most have found sufficiently effective care paths in digital, but it has exposed massive vulnerabilities and new risks for the sector in the process.  The pandemic has created a patchwork of fixes – from doctors using Zoom to standalone cloud solutions for data management and storage. These may not be GDPR-compliant or genuinely fit-for-purpose, and they certainly tend to be unconnected and inefficient. 

The challenge for healthcare now is to convert this impetus into a serious, connected, and sustained solution – one that is patient-friendly and compliant while delivering cost and time efficiencies. 

AI and Big Data advancements  

Providers of health and wellness services use innovative technologies such as AI to gain new insights and opportunities. These include accelerating diagnostic capabilities, automating processes, and providing AI-based treatments. 

AI has the potential to reduce costs by empowering patient self-service through intuitive companion apps and online chatbots. In addition, it can diagnose patients faster through the adoption of intelligent technologies and data-backed modelling. It can be utilised to analyse image data to examine molecular structures for drug discovery as well as by radiologists in diagnosing patients. And last but not least, it can help personalise treatments with more insightful clinical data and communication. 

Providers are looking to re-imagine clinical care and operating models around widespread data and intelligent technologies. Businesses can now leverage data as a competitive asset and provide novel insights into critical areas of patient care, operational efficiencies, and optimised outcomes for patients.  

The growing influence of social media on health choices 

Active lifestyles are ubiquitous on social media, with photo-and video-sharing platforms the go-to sources for fitness inspiration and motivation. The power of social media and influencers like Joe Wicks on consumer health choices continues to proliferate. 

Innovative platforms such as TikTok, improved cameras and video-editing tools make it easier to post quality content, driving more activity and engagement across platforms. As social media becomes more image and video-based, projecting physical wellbeing and a positive lifestyle remains a growing trend. 

The rise of data 

Existing healthcare trends such as connected wearables will continue to open up new pathways for doctors and specialists, enabling them to tap into the detailed information they collect and use them to help diagnose and treat patients. 

With the rise in telemedicine, wearables, remote patient monitoring and other IoT, there is an explosion in health data. Today, that data is fragmented, unconnected and somewhat lacking in purpose. However, with initiatives such as Apple HealthKit and Google’s recent acquisition of Fitbit, big tech is moving to bring this data under one roof. Privacy, of course, remains a critical factor, along with questions about the ownership of health data, as well as its security and accessibility. These issues, however, will be resolved through legislation. 

Access to this increasing wealth of data will allow healthcare providers to offer ever better care, insight and service. However, few organisations are currently in a position to use this data properly, or to create products and services that exploit it. Those ready to meet patient data head-on with value-added services will enjoy a commanding lead as the sector develops. 

So, what does this mean? 

With an ageing population, pandemic-weary societies, exponential growth in health & wellbeing spend and an explosion of health data, it’s little wonder that healthcare is a key trend in private equity deal origination. Firms invested over GBP140 billion across 1,227 healthcare deals in 2019. 2020 would likely have seen this speed continue, but Covid-19 impacted deal activity across the board.  

Nevertheless, healthcare was the single highest demand sector for Equator’s digital due diligence, advisory and transformation services during this time. These provide immensely varied opportunities to create value through digitisation and technology adoption – the best prepared are likely to be the winners as we recover from the pandemic and look ahead. 

The full Healthcare industry digital wellness report 20/21 is available on the Equator website.