Brian Clem

This 👂 podcast episode and insight’s from a16z Bio + Health's Julie Yoo spoke so clearly to the fundamental challenge facing both 🩺 clinicians and 🏥 healthcare systems.  There is a huge disconnect between supply, in the availability of clinicians, and demand, in the increasing volume and complexity of healthcare needs. -     36% of physicians plan to reduce their hours next year according to the AMA -     48% of physicians reported feeling burned out in a 2024 Medscape survey At the same time, the demographic baby boomer bubble and steady increase in the prevalence of major chronic disease, which consumes up to 90% of healthcare expenditures according to some estimates, is driving demand. With this context, Yoo points to a major opportunity for AI adoption in healthcare in 2025. Yeah, a VC hyping a wave of new AI companies that will replace the decades of training and experience of clinicians, the skeptic would say.  But Yoo is thoughtful in pointing to the role AI can play, and is already playing, through solutions such as ambient, autonomous scribe solutions (of which local star Abridge is leading the pack) in not replacing, but freeing up productivity for clinicians. There is so much unstructured context in both the complexity of disease and treatment options and the social/emotional considerations that we shouldn't be looking for AI to *replace* clinicians. But companies are getting better at finding the structured, repetitive and time-consuming places where AI tools can *help* clinicians. Nearly two-thirds of doctors cited bureaucratic tasks as the leading contributor to burnout. Rigorously trained-AI driven solutions can be a force multiplier for clinicians, and I’ve seen several interviews where nurses and doctors go as far as to say some of these solutions are ”restoring their joy in practicing medicine”. Our health is precious; and we rightly want any technology engaging with it to be developed thoughtfully and thoroughly tested. This requires top AI talent and diverse and realistic training data. Pittsburgh’s strengths in both areas is why we are an emerging hub for data-driven healthcare. #AIinhealthcare #clinicianburnout #healthinnovation #digitalhealth

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When the music stops we find out which emperor has no clothes. (That’s not how the saying goes is it?) Anyway, here’s the most basic way to look at private equity investments in healthcare (disclaimer: not all are bad!) Healthcare entity sells a piece of itself to an investment group. Let’s say it’s sells 50% for $100 bucks. Investment group (doesn’t matter which one, just choose a color and an object from nature and add Capital or Equity at the end 🤣) puts up $20 dollars and borrows $80 dollars, saddling the healthcare entity with crushing debt. (Works great when interest rates are low, not great when they skyrocket like they have the last couple of years.) Investment group needs to show a return. Easiest way to increase revenue: Raise prices. Don’t pay people what they’re worth. Squeeze them. Cut staff and services. Now you have overworked, underpaid healthcare workers who think they don’t have another option. Let’s say investment group manages to sell their piece for $120 bucks in the usual 3-7 year hold period for private equity. (Remember they only put up $20 and borrowed $80.) Returns the money they borrowed, and keeps the profit. In this scenario it’s basically 100% return on investment. Investment group gets rich. Healthcare entity owners get rich. Patients and healthcare workers suffer. Anyway, Dr. Hal Inc is also a healthcare consulting firm. Follow me for more tips and tricks on what NOT to do in healthcare! (Shameless plug!)

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…and private equity wants in on the action. Well that makes sense 🙄 Turns out running a hospital is very, very hard. A 4.3% margin is not healthy, even for a non-profit. Payors and pharma continue to point the finger at these “rich” hospitals and complain about market consolidation, 340B, and any number of other phantom problems, but in reality most are just trying to survive. Many of these grievances are gaslighting in its purest form. Those making it work are focused on the basics. The strategic plan has highly pragmatic, common sense initiatives that return a tangible benefit with clear measurable targets as opposed to chasing trendy buzz words. They control labor and they control drug cost. On the pharmacy side, they deeply understand the economics and have an appropriately positioned business minded, strategic pharmacy leader. #pharmacist #pharmacy #hospitals #healthcare https://lnkd.in/g9d9VTcK

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Still trying to make sense of Walmart pulling back from healthcare delivery? 3 quick thoughts: 🏥 Healthcare delivery is hard, even for companies where it's a primary focus. Navigating reimbursement and competition is extremely challenging. 💸 The patient may be a customer, but they are never the payer. 📊 No matter a company's stature, cooperation and reimbursement from health plans—both nationally and locally—are still critical for building profitable businesses. For a deeper dive, check out our full analysis here: https://lnkd.in/eXTeugKD

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Strong partnerships are essential to tackling these foundational levers effectively. By aligning goals and working collaboratively (with trust), we can create sustainable strategies (and comp models) that not only lift the tide but also empower everyone to succeed together. Bringing all back to the partnership!

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Taking stock of primary care today and looking ahead.... Increasing presence, market share for non-traditional providers - payers, advanced primary care providers, primary care enablers. Question marks over retail's presence in primary care and what care models and patient populations they might need to focus on to be a force. #VBC #populationhealth #primarycare #caremodels

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Imagine swallowing the competition whole. That's what many players in tech do via roll-up strategies, gobbling up smaller firms to deliver richer solutions and amass greater market share. Where else are roll-up strategies common? // HEALTHCARE Picture being a patient at a medical practice that’s been part of a roll-up in Healthcare Services. It's an industry ripe for roll-ups due to its fragmented nature and potential for greater efficiency. // CONSUMER SERVICES Or let's say you needed your HVAC serviced, and notice your local repairman is now part of a bigger Consumer Services entity? Centralized management and scale economy turn these localized businesses into roll-up targets. // FINANCIAL SERVICES Think about your insurance agent or wealth management advisor. They're working in complex, highly regulated environments. In the Financial Services sector, roll-ups offer an effective way to consolidate expertise, streamline operations, and enhance customer offerings. // MANUFACTURING Now, imagine driving past factories under a new name — the result of Manufacturing and Industrial Services roll-ups. Bulk purchasing reduces costs, enhances production capabilities, and expands geographical footprints. // REAL ESTATE Lastly, envision your real estate brokerage firm. The industry sees roll-ups as a strategic move to increase market penetration, enhance service offerings, and hike up portfolio value. Roll-ups play a huge role in most industries, rather like a snowball rolling downhill, gaining momentum, and size. Are you seeing roll-ups in your sector or considering M&A?

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This is quite incredible to see. Very few #CMMI demonstrations can point to any savings at all. And “…MSSP savings go further than savings generated by Medicare Advantage…” #ACO #VBP #Primarycare #MSSP #healthcareinnovation

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Have y’all ever watched someone pour water in a cup so fast that it overflows? That’s where I think we are in US #healthcare right now, and according to an article by Yahoo Finance, I’m spot on: US Healthcare spending rose to $4.8 Trillion in 2023, an estimated 17.6% of US GDP. Now I’ve worked in roles across #publichealth, #healthcare and #pharma, but admittedy never quite understood the economic jargon of comparing US healthcare spending to gross domestic product (GDP). So here’s my attempt at explaining this in plain language. ✨ GDP is the total value of all goods produced in a country during a time period; it’s a measure of the size and health of an economy. ✨ Healthcare spending refers to all money spent on healthcare services and products in a country— i.e- hospitals, doctors, medications, insurance… ✨ Why do we compare the two? When we compare healthcare spending to GDP it helps us understand how much of our economic resources are being used for health related expenses. ✨What does this headline mean? U.S. healthcare spending grew faster than the economy *overall* last year—and is expected to do so through 2032. Think of it like this: if we pour water in a cup too quickly, it will overflow. This is like healthcare costs rising faster than the economy can sustain. ✨What’s driving the increase in cost? 1) Insurance coverage has hit historic highs, 2) Medicare is projected to have the highest spending growth, 3) Hospital spending is soaring… Here are a few additional thoughts I had… 💡 How will the rapid uptake of #AI in healthcare, impact these projections? 💡 I wonder how projected healthcare workforce shortages will impact this? 💡*This* is what we mean when we say everyone should care about #healthequity, because inequities are costing all of us. What do y’all think about future drivers of cost or solutions? Drop me a line in the comments! #healthcareonlinkedin

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This is the Natural End Result of Private Equity Hospital Ownership 👉 Buy a hospital <> and strip off all profit and send teh $'s back to HQ 👉🏻 Fulfill your mission to MAXIMIZE RETURN ON INVESTMENT 👉🏼 When you have destroyed the hospital's ability, to provide adequate care with a margin - Part it out to the vultures for the remaining scraps of profit. 👉🏽 AND KICK THE CORPSE(S) TO THE CURB ABANDONING ALL THE PATIENTS, THE WORKERS AND ANY SEMBLENCE OF A MISSION OF PROVIDING HEALTH CARE. IN THIS USA - THIS IS THE FUTURE of for-profit healthcare. It cannot help but be this way Because the underlying mission is to maximize the return on investment rather than provide quality Medical Care, or support the health and well-being at the population. 👉🏾 We are an international disgrace. 👉🏻 By far the worst healthcare system in the first world. Once again the only HashTag that makes any sense at all -- is this one #FUBAR https://lnkd.in/gRHUS398

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More Scrutiny for Healthcare Private Equity Transactions In my opinion, the demonization of private equity in healthcare services is misguided and largely fails to recognize this simple truth, the reimbursement policies and extraordinary compliance costs superimposed by the government are the primary reasons physicians do not remain in private practice. Declining reimbursement and increasing costs continue to erode physician practice profitability (and yes, outside of government businesses must actually be profitable to stay in business....) When it is no longer financially viable to stay in private practice, physicians are faced with four choices 1) Close their doors (retire/leave medicine), 2) leave the community and practice elsewhere with better reimbursement, 3) become an employee of a hospital or health system, or 4) partner with private equity (and remain in private practice). Both #1 and #2 are generally bad for the communities they serve, and #3 immediately increases the cost of care (and limits choices) by forcing reimbursement under the hospital fee schedule - which can be several times higher for the same exact same services. #4 can provide an alternative that is beneficial to the public and helps drive cost efficiencies to healthcare. When the government discusses private equity, however, it is almost always with disdain. “When private equity firms buy out healthcare facilities only to slash staffing and cut quality, patients lose out,” said Chair Lina M. Khan of the FTC. “Through this inquiry, the FTC will continue scrutinizing private equity roll-ups, strip-and-flip tactics and other financial plays that can enrich executives but leave the American public worse off.” https://buff.ly/439TJHp PE is undoubtedly focused on generating a return on its investment, but that return most commonly comes from temporary reductions in physician compensation and cost efficiencies related to non-clinical functions - not a reduction in the quality of care. In fact, under many value-based reimbursement models, PE returns are enhanced only with reduced cost of care and improvements to the quality of care. To paraphrase Mark Twain, "“It ain't what [the government] doesn't know that gets [us] into trouble. It's what [they] know for sure that just ain't so.” #healthcareprivateequity #physiciandeals

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An interesting new service for accelerating time to market for digital health products and embedding them properly in pathways. Palantir's recent CEO statement is also very revealing. While focused on their defence work, it can be equally read as a rather blunt critique on where much (but not all!) of the digital health industry is at right now: "A premium was placed on developing software products whose principal purpose was to sell themselves. And a perception of value became more important than value itself....... Those companies, however, are now being swept to the side. They attempted to seize the cultural and moral high ground at the expense of anything resembling a commitment to outcomes. And society, not to mention customers, have grown disinterested in their theater." Ouch. https://lnkd.in/e8iVd9wV

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"Hopes to rein in private equity investment in healthcare died in California last weekend." Patient care is more than a process; it is a profound human connection built on trust. Dr. Zirui Song, a healthcare policy professor at Harvard University and a general practitioner at Massachusetts General Hospital, highlights this essential aspect of healthcare. #PatientCare #HealthcarePolicy #HumanConnection #PrivateEquity

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Alot of bad actors and a few good actors. $2.5T HC capital raised & $1T invested by PE in last decade. $31B in 2013 vs. $217B in 2021. We know the story. Misaligned incentives - unrealistic multiples, short-term profit focus, aggressive cost-cutting, unrealistic scaling, misunderstood market dynamics, just to name a few. However, our industry needs money. But our industry is more infrastructure asset class than tech start-up (James Nicholls gave me that epiphany). Mic drop on the lyrical genius of Alex Fair of MedStartr Ventures as he literally gives the whole story poetic justice as he reads HIS POEM on this "On The Road at VIVE" episode of The Reverse Mullet Healthcare Podcast w/BP2 Health. This is the perfect episode for a Friday afternoon! He and Paulo J Machado donned the actual reverse mullets and joined us back in February at #VIVE2024 to talk about the need for REAL change in healthcare, startup focus and investor expectations. It was one to remember and one that is in desperate need of a full-length follow-up episode. Give us a like and a watch or a listen https://lnkd.in/e4w4mjkv https://lnkd.in/egmK3kMB

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