2020 has been a year like no other. COVID-19 has dramatically changed so many facets of life – impacting the way we work, the way we socialize, the way we educate our children, the ways in which we interact and transact as consumers. Importantly, we’ve also seen incredible shifts in how we deliver and consume healthcare. While many of these changes have been percolating in the healthcare landscape for years, COVID has accelerated several key trends that I believe will reshape the industry for the long-term.

Trend 1:

Telemedicine is Here to Stay

While telemedicine has long been viewed as a common-sense way to improve access to healthcare – in particular, for patients seeking care from home or rural markets with limited in-person options – the potential for remote delivery has remained untapped. The onset of COVID-19 fueled a significant, rapid transition to telemedicine that would have been unlikely to otherwise occur. Patients and providers alike have grown more comfortable with the experience and the technology over the past few months, and this comfort level – together with structural changes in reimbursement catalyzed by COVID – has created what I think will be an enduring change. Telemedicine will play a bigger and more permanent role in a number of healthcare specializations going forward, perhaps most notably in psychiatry, where the need is both great, and the isolation brought on by COVID has the demand soaring. Summit’s work with LifeStance Health offers a clear example of how telemedicine can bridge the gap for providers and patients in behavioral health, when getting to an office is difficult or impossible. Prior to COVID, LifeStance’s 2000+ clinicians were seeing patients in 200+ offices across nearly 20 states. Over the course of just eight days in early March, LifeStance transitioned all of those clinicians and all of their patients to a telepsychiatry model. The company’s telepsychiatry volume increased from about 4,000 monthly patient visits pre-COVID to more than 160,000 a month as of September 2020. Importantly, the telepsych model has contributed to a significant increase in clinician capacity for LifeStance, creating more access for the critical behavioral health services that patients across the U.S. need.

Trend 2:

Uncertainty Will Fuel Continued Consolidation

Smaller, independent physician practices have been especially hard hit by the pandemic and the related changes in patient behavior. In many ways, the COVID crisis has given us a new understanding of what it means to be an essential healthcare service. Prior to COVID, we really thought about virtually all healthcare services as essential: it was impossible to imagine a situation in which patients would outright stop seeing their clinical, ancillary and dental providers of care for months at a time. Yet, as states and localities shut down in response to the pandemic, this situation became the reality. Even as practices began to reopen, most ran well under capacity to conform to state social distancing guidelines, which removes much of the efficiency that providers rely upon to make a practice profitable and stable. For many “mom & pop” practices, the insecurity of the last several months and the uncertainty about what lies ahead, will, I believe, lead many independent providers to consider joining forces with a larger organization. I believe consolidation really makes sense for a number of specialist areas, especially where the consolidating organization can offer market power in negotiating reimbursement rates, centralized billing and IT infrastructure, referral programs, and other resources. This kind of stability helps providers navigate tough times and helps to ensure that they can devote more focus on delivering care overall.

Trend 3:

 A Dramatic Movement to Value-Based Care

Yet another area where I see COVID making a major impact: an acceleration in adoption of value-based care models. Providers and payors are working to reduce costs and stabilize reimbursement rates while delivering ever-improving patient outcomes. The transition to value-based models has been slow historically in many regions of the U.S., but these models have gained a significant foothold over the years in markets like South Florida, Southern California, Arizona, Puerto Rico and Texas – and many of these provider organizations have done well navigating the COVID crisis.  I believe this is driven by two key factors. First, value-based care organizations benefitted from reimbursement models that are not tied to office visits. Second, value-based providers had an established care coordination infrastructure to connect with and ensure care delivery to the most vulnerable populations in their networks. For example, in the early days of the pandemic, Summit-backed Innovacare Health was able to quickly introduce a program to provide uninterrupted care for members diagnosed with COVID-19, including needs assessment, care transition support, mental health services, referrals to specialized services, and food and medication delivery. Chronic illness and underlying conditions contributed to the huge variability in intensity and progression of COVID in individual patients, really underscoring the need to manage these conditions on a more proactive, preventative basis – and I believe value-based care can be incredibly effective on this front.

Summit has invested $7.3 billion across more than 115 healthcare companies since 1984 and $4.0 billion in the last five years alone. We believe strongly in the importance of helping companies fulfill their missions of improving the healthcare value equation – whether by improving quality, decreasing costs, or both. For more on Summit’s healthcare experience, please visit www.summitpartners.com

Listen for More

Summit’s Darren Black joined Gary Herschman for Epstein Becker & Green’s Future of Healthcare Podcast Series on October 1, 2020 to discuss how COVID is transforming healthcare delivery and reshaping the industry for the long-term. Listen to the complete podcast below.

ABOUT THE AUTHOR

Darren Black is a Managing Director on Summit’s Healthcare & Life Sciences team. Darren’s current board directorships include Abode Healthcare, InnovaCare Health, LifeStance Health, Paradigm Outcomes, PharmScript, Sound Physicians and U.S. Renal Care. His previous board and investment experience includes ABILITY Network (acquired by Inovalon), Advance Health (acquired by New Mountain Capital), DMG Practice Management Solutions (acquired by Ares Management) and HealthSun (acquired by Anthem). Prior to Summit, Darren was a Managing Partner with SV Life Sciences, where he focused on healthcare services, healthcare information technology and pharmaceutical services. Prior to SV Life Sciences, Darren was Cofounder and President of two companies—ClinCare and PharmaStar. Previously, he was a healthcare consultant for Accenture.

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