Tim O'Brien

I’m worried about the state of venture capital and direct-to-consumer (DTC) healthcare startups. Hims & Hers is the poster child for DTC healthcare at $1.2B proj 2024 revenue and a $3.6B valuation. By most accounts, they have been an outlier success for DTC since bottoming out in May 2022. So why is this bad news for DTC healthcare? Because the market leader (Hims) trades at a 3x forward revenue multiple. And the category leader typically gets a higher valuation multiple than smaller startups. We see this phenomenon in private equity. They “roll up” smaller companies within the same category at a lower multiples just to create one larger platform that trades at higher multiples. Now back to DTC healthcare startups. If Hims commands a 3x revenue multiple, it’s not unrealistic that smaller, unprofitable startups may be valued 1-2x revenue at exit. At 2x revenue, a startup must generate $500M to produce a $1B exit in today’s market (depending on growth and profitability). Series A/B venture capitalists must see a pathway to $1B outcomes. And if the growth-stage investors with billions under management are less interested in DTC healthcare, the future funding rounds necessary for fueling growth are not guaranteed. Juxtapose this against 2017-2022 where DTC could raise Series B-E funding. Let’s take a DTC startup doing $25M after 3-4 years of operations and has already raised a Series A. By most accounts, it would be a phenomenal accomplishment. But today, investors will question the chances of that same company scaling from $25M to $500M revenue in the next 3-4 years with unknown future funding sources from Series B and beyond. You're stuck in VC-funding purgatory. Some of these companies will shut down. Some may sell for 1-3x revenue. And some may try to transition to profitable, cash-flowing businesses. All of which are certainly not the venture-backed goal the founders, investors, and employees often had in mind when first taking capital. I say this all with friends working at or starting DTC healthcare companies, I feel bad for them. I also feel bad for the patients who enjoy those products or services. To caveat (b/c I know people will object), there will be other DTC brands that exit for $1B+ (i.e., Ro). However, they were forged and scaled during a different time period where seemingly endless venture capital was available for DTC healthcare. Now we're in a different time with no end in sight. Thoughts?

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As we officially kick off fall with the fall equinox, The “Goldilocks thaw” of the capital markets (not too hot not to cold but colder than we like) is seen with the billion dollar deals and select venture raises. We are less than 45 days to the election and a marginally surprising 50 basis point cut by the fed has helped accelerate this thaw and many executives and owners to explore options and alternatives. Cardinal Health announces a $1.1b acquisition of Integrated Oncology Network while venture studio Hashed Health spinoff SubPop Health, Inc. gets acquired by MedeAnalytics. Watch for our exclusive Healthcare Venture Studio report, the only research on this alternative asset class with more unicorns than any other group. #healthcareinnovation #venturestudio #healthcaredeals #fallequinox

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California Bill Would Require State Review of Private Equity Deals in Healthcare — Consumer advocates and labor unions are enthusiastic about the plans, but hospitals are not A bill pending in California's legislature to ratchet up oversight of private equity investments in healthcare is receiving enthusiastic backing from consumer advocates, labor unions, and the California Medical Association, but drawing heavy fire from hospitals concerned about losing a potential funding source. Hopefully, more states will initiate the same approach to keeping close tabs on private equity buying healthcare-related entities. Private equity firms raise money from institutional investors such as pension funds and typically acquire companies they believe can be run more profitably. Then they look to boost earnings and sell the assets for multiples of what they paid for them Critics say the profit-first approach isn't good for healthcare. Look to Stewart Health Care where the CEO and C suite lined their pockets while driving the health system into the ground. "Almost all of the most distressed U.S. healthcare companies are owned by private equity firms." Time to rein in private equity vultures out there in healthcare trying to make a quick profit, raising the costs of healthcare in their quest to generate profits. #privateequity, #runningthehospitalintotheground, #vulturecapitalist, #forprofithealthcare https://lnkd.in/ea3pFz43

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AEP Chronicles: Day 1️⃣7️⃣ Kickoff today’s PSA with a HUGE shoutout to the Los Angeles Dodgers on their World Series victory! ⚾️🌎🧢👏🏽📣 Next, as a follow up from yesterday’s discussion on Medicare updates, “a lot of you guys have been asking” (classic social phrase), why is Medicare Part D so important? 🤔 We’ll simply put, Medicare Part D is important because it provides prescription drug coverage to Medicare beneficiaries. This option isn’t included in the standard Medicare plan (Parts A and B), refer to cms.gov for more insight. Medicare Part D helps people pay for necessary medications that could otherwise be very costly, especially for individuals with chronic conditions who require multiple prescriptions. 💊 Lastly, can I say thank you for engaging with these daily AEP posts? Glad to help educate the LinkedIn community a bit on Medicare, it’s been fun! 🤩 Have a great day ahead y’all! 🎃👻🧌🧟‍♂️ #Healthcare #Seniors #AEP #Education #HaveFun #Grit #GrowthMindset

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The biggest issue that keeps #healthcarestartups from raising capital is lack of a go to market strategy. In healthcare this is a complex matrix involving multiple stakeholders, reimbursement and clinical adopotion. Join Catalyze LLC and Blink Ventures at our webinar next week where Greg Cogswell will address this important topic: Integrating MedTech Access, Evidence Generation, & Advocacy. Register here by booking the calendly link: https://lnkd.in/gsaN3wqj For the past 20+ years Greg Cogswell has helped large multi-national MedTech corporations accelerate market adoption for their technologies via planning and implementing integrated market access, evidence generation, and advocacy strategies. In addition, for the past 12+ years Greg has served as an advisor to dozens of early stage MedTech founders addressing a significant unmet need of designing and implementing simultaneous integrated pre & post-market strategies. These efforts have successfully transformed several healthcare ecosystems by shaping medical technology coding, coverage, payment, funding, tenders & clinical guidelines. Greg currently serves as the founder and managing director of IA MedTech, LLC. IA MedTech is a highly specialized MedTech (Medical Devices, Digital Health, Connected Health, In-vitro Diagnostics) advisory firm providing early stage MedTech companies a value-added integrated market access and evidence solution; accelerating technology market adoption via efficiently and effectively overcoming significant commercial adoption structural barriers (payor coverage, technology coding, Health Technology Assessment, clinical and health economic efficacy, physician capacity, clinical guidelines) via fit for purpose evidence generation and advocacy campaigns.

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At DisclosedRx, we believe in keeping it simple. Here's what sets us apart as The Fully Disclosed PBM®: - One Source of Revenue: We work solely for our clients - 100% Pass Through Drug Pricing: You pay what we pay - 100% Pass Through Rebates: You get what we get - One Admin Fee: No confusing fees or shell games And the best part? It's all in the contract. As your Fiduciary PBM, we're contractually bound to act in your best interests. Ready for a PBM that puts your needs first? Let's talk about how our Full Disclosure approach can benefit your organization. https://lnkd.in/gNVZHQde #FullDisclosure #FiduciaryPBM #ContractuallyBound

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TXT. XML. CSV. These are just some of the three-letter file formats that can cause healthcare benefits teams' carrier onboarding process to grind to a halt if they don't have a process to ingest them. It's been an issue for benefits teams for a long time. It usually takes months to solve, too. Watch the video below to find out how you can regain that precious time and make your carriers happy.

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Is your PBM truly working for your benefit? Too often, PBMs manage numbers to their advantage, leaving clients with suboptimal savings. It's time to demand more from your pharmacy benefits partner. At DisclosedRx, we believe that loyalty should lie with the client, not just the contract. We go above and beyond to ensure that you receive the best possible outcomes, not just the bare minimum. Don't settle for a PBM that prioritizes its own interests. Choose a partner that puts your needs first and consistently delivers the results you deserve. Ready to experience the DisclosedRx difference? Connect with us on LinkedIn today to learn how we can help you unlock the full potential of your pharmacy benefits strategy. #FullyDisclosedPBM #DisclosedRx #FiduciaryPBM

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Sammy Sheth: 20+ Years of Transforming Healthcare in California | CEO of UHC Staffing Shares His Journey Who is Sammy Sheth? Sammy Sheth is the visionary leader behind UHC Staffing, a premier healthcare staffing company. With a career spanning more than 20 years, Sammy has made significant contributions to the healthcare sector in California, ensuring quality staffing and exceptional patient care. How It All Began Sammy's journey in healthcare started in the early 2000s. With a passion for improving patient care and healthcare management, he embarked on a mission to revolutionize the staffing industry. His early days were marked by challenges and learning experiences that shaped his career. Key Milestones in Sammy's Career Early Career: Sammy began his career by working closely with hospitals and healthcare facilities, understanding their staffing needs and challenges. Founding UHC Staffing: In 2004, Sammy took a bold step by founding UHC Staffing. His vision was to create a company that not only provided staffing solutions but also ensured the highest standards of care. Growth and Expansion: Under Sammy's leadership, UHC Staffing grew exponentially. The company expanded its services across California, partnering with numerous healthcare facilities to provide top-notch staffing solutions. Innovations and Achievements: Sammy introduced several innovative practices in healthcare staffing, including advanced training programs for healthcare professionals and cutting-edge recruitment strategies. Thank you for watching and stay tuned for more exciting content! 💼✨ #SammySheth #UHCStaffing #HealthcareIndustry #CaliforniaHealthcare #HealthcareStaffing #InspiringJourney #Leadership #HealthcareProfessionals #CareerGrowth #PatientCare #HealthcareInnovation #IndustryLeader #Motivation #SuccessStory"

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10 mid-market PE deals from the past week: ➡️ Vector Capital Management has acquired Bigtincan Holdings, which provides sales enablement software and AI solutions. ➡️ Argosy Healthcare Partners sponsored a recap of Nicklas Medical Staffing, a FL-based staffing firm for pathology and histology labs ➡️ Platinum Equity invested in Global the Source, a master distributor of HVAC/R components, with will be merged with existing Platinum portfolio company MARS ➡️ RECOGNIZE invested in SDG Corporation, a CT-based provider of cybersecurity services ➡️ CES Power, a live events infrastructure firm owned by Allied Industrial Partners, acquired Base Craft | Nationwide TV and Film Equipment Leasing, a provider of services and equipment for the motion picture industry ➡️ OpenClinica, a MA-based portfolio company of Thompson Street Capital Partners, acquired BuildClinical, a NY-based provider of patient recruitment software for academic researchers ➡️ Comvest Private Equity bought Bland Landscaping Company, an NC-based provider of commercial landscaping services ➡️ Morgan Stanley Capital Partners agreed to buy Prescott's, a CO-based provider of outsourced clinical engineering services ➡️ Priority Courier Experts Express, a Minneapolis-based portfolio company of TRIDENT acquired Indiana's NOW Courier Inc. ➡️ TTDS Thermal Technology Distribution Solutions, a Cincinnati-based portfolio company of Gryphon Investors, acquired Applied Thermal Systems of Minneapolis ➡️ Echo AI (acquired by Calabrio), which uses generative AI in a customer conversation platform, was acquired by Thoma Bravo-backed customer interaction analytics specialist Calabrio, Inc. ➡️ Amulet Capital Partners, LP acquired Theoria Medical, a managing service org for senior living communities #PrivateEquity #MergersandAcquisitions #Acquisitions #PE #Acquisitions

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We're entering the peak sales time of the year, and many investors and purchasers are eager to finish and finalize deals before the end of the year. I'm frequently asked if now is a good time to sell, or if it's better to wait. To be honest, it depends on several factors, including what part of the healthcare industry you're in, whether your financial records are in proper order, and who you think will win the election. With the possibility of higher capital gains taxes of 39.6% for those making over $1 million annually, it may make sense to be completely or partly acquired in 2024. If you'd like to have a private and confidential discussion about your company's valuation or click the link below to fill out the form. https://lnkd.in/gUF3NKfK #healthcare #medicalpractices #dentalpractices #pharmaceuticals #assistedliving #dentgroups #dentallabs #medicgroups #staffing #billingcompanies #phsysicians

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When asked why he co-founded Capital Rx, A. J. Loiacono almost always says, “To fix the problem, we had to become the problem - a PBM.” The #PBM industry lost its way long ago, chasing #rebates and retaining a #spread on drug prices at the expense of what’s best for plans and members. Was our approach disruptive? Absolutely. Refusing to profit from drug spend and instead charging a flat fee, passing through rebates, and launching JUDI® didn’t just shake things up. It set a new standard. Learn more here: https://okt.to/h8Zo9K #PharmacyBenefits #PBMRevolution #AlignedCare

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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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Medicare's open enrollment period is from October 15 to December 7 each year. The average Medicare beneficiary has access to 43 Medicare Advantage plans in their georgraphy - about as many choices as your typical Baskin Robbins ice cream assortment, without the ability to taste or try before you select. With healthcare expenses absorbing one in seven dollars for those over the age of 65, selecting the right coverage is critical. And let’s be honest, even coming from the industry, it is confusing to understand the terms, asterisks, and footnotes of health plans. When it comes to unbiased plan selection, please check out Connie Health or call (623) 223-8884. As you can see from the article below, the team at Connie is doubling down on the technology and team to be the best (most personalized, unbiased and lower cost) gateway for older adults to their care. #conniehealth #medicare Thanks Oded Eran for leading the charge!

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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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Lee Shapiro with 7wireVentures and I are both passionate about driving more investment in integrated care. For Healthcare Business Today, we shared our thoughts about why including oral health in overall health care technology and investment is integral to creating more unified care and achieving better patient outcomes. Read more of our perspectives on the importance of increased investment for integrative care solutions, and why we believe the time is now for digital health investors to jump on the medical-dental care bandwagon. #oralhealthVC #digitalhealthinvesting

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