Noted Strategist Reveals Common Mistakes Made by Private Equity Healthcare Investors - Effective Use of Existing Technology Drives EBITDA and Exit Value

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Investing in healthcare companies can be a dicey proposition for even the most experienced Private Equity Investors. The key is to have the right technologies in the right place and the right time.

Despite aging populations, robust worldwide demand, and medical advances, investing in healthcare companies can be a dicey proposition for even the most experienced Private Equity Investors.

“You don’t need to be a brain surgeon to realize technology drives revenue capture, cost of operations and quality of patient care,” said veteran Healthcare strategist, George Britton at Performance Improvement Partners’ Annual Practice Managers meeting. “The key is to have the right technologies in the right place and the right time.”

According to Britton, “Healthcare investing can be pure gold or a black hole.”
Private Equity investors have to maintain a flexible mindset, but not allow themselves to become mesmerized by Portfolio Company IT petitions for the latest and greatest technology.

Several common mistakes identified include:

  •     Using technology to identifying the “next big thing” is valuable, but understanding how the fast evolving healthcare marketplace will embrace it is invaluable.
  •     Not continually auditing existing Portfolio Company processes to ensure company technology meets or exceeds emerging standards for patient medical care and delivery.
  •     Management resistance to the use of “experienced outside eyes” to identify quality, assignment or billing issues that put the healthcare provider at risk.
  •     The target company does not demonstrate that its offering delivers a technological or operational solution to customers that gives that company a sustainable advantage over its competitors.
  •     Ensuring acquisitions “system fit.” For example, does the acquisition’s mobile app delivery system match the acquirers’ existing mobile delivery system.

Performance Improvement Partners is America’s leading technology solutions company exclusively serving the Private Equity industry. It represents over 130 PE Firms and their Portfolio Companies.. It maintains offices in Fairfield, CT and Stamford, CT and San Francisco, CA.

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Jen Ganim
@PIP_LLC
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