Sachin H. Jain, President and CEO of Scan Group and Health Plan, recently shared on LinkedIn:
”Access to cheap capital and policy changes set off a healthcare gold rush.
The gold rush has been defined by undisciplined thinking about problems and solutions.
– Revenue capture and labor arbitrage became confused with true care redesign.
– Correlation was confused with causation.
– The total addressable market guided healthcare company valuations rather than the potential of the specific intervention and team at hand.
– Non-entrepreneurs were backed as entrepreneurs.
– Countless organizations with no prior investment experience became investors.
– High competition for deals led to less scrutiny of facts; disbelief was suspended.
– Anecdotes superceded data.
– We were convinced that we were making a bigger difference than we were.
As the cost of capital has become expensive—discipline is returning and punch drunkness is making way for sobriety.
– Valuations are increasingly being tied to more normal multiple and revenue and ebitda and lives impacted.
– Short-term financial arbitrage is being seen for what it is rather than true care redesign and innovation.
– Impact is being measured by true impact rather than “implied impact.
– More scrutiny is being applied to who we trust with capital and precious resources.
– A focus on potential is giving way to core operations and performance.
– Data is once again currency.
Paradoxically, I have never been more optimistic about the potential of entrepreneurship, investment, and innovation to improve healthcare.”
Source: Sachin H. Jain/LinkedIn