VSS' Jeffrey Stevenson on the Digital Transformation in the Healthcare Sector
Digital transformation is touching virtually every industry imaginable, with rapid change causing disruption in a number of traditional fields. During a recent interview with Private Equity Wire, Jeffrey Stevenson, managing partner of VSS, gets into why the changes caused by digital transformation can be a good thing for the healthcare industry.
VSS specializes in lower-middle market healthcare investment, helping companies that have good potential for future growth with the right technological infrastructure. "Within healthcare, we are doing more in healthcare services. Not just healthcare I.T.; we are also expanding within tech-enabled business services," Stevenson mentioned in a recent interview with Professional Tales.
The level of detail that can be achieved for each patient allows for better outcomes, faster recovery times and lower overall costs. But what aspects of digital transformation is he especially interested in, and why does he think that digital transformation will change how healthcare happens in the future? Here's a quick look at some of the top technology that's shaking up the healthcare industry.
"Robotics is being used to perform more precise, safer, and less invasive treatments."
Jeffrey Stevenson mentions in the interview that the use of robot-assisted surgery and virtual nursing assistants saves the U.S. economy $150 billion every year. By combining AI, modern robotics and human ingenuity, the medical field is seeing a wide range of changes in how patients are treated.
From "talkbots" that work through a child's weekend cough to prevent unnecessary office visits, to Moxi, Diligent Robotics' social-intelligence-equipped medical aid that can fetch medical supplies for busy doctors and nurses, to surgical robots that allow a greater level of precision, control and flexibility than has been previously available, medical robots are helping with the labor shortage in today's medical field while delivering better patient outcomes.
From minimizing the surgical site to providing automatic reminders to patients who are recovering from an illness, surgery or injury, medical robots are keeping patients from slipping through the cracks, making it easier for doctors and nurses to focus on their current caseload instead of chasing yesterday's cases.
"AI applications, such as predictive analytics for patient monitoring, provide significant financial savings and help reduce risk through discovering those in need of medical intervention and creating custom care plans for them, and by delivering personalized automated reminders."
Commonly thought to be the purview of research scientists, computer programmers and engineers, big data, analytics and artificial intelligence (AI) are opening up an entirely new world of medicine. By providing today's pervasive computer and networking capabilities with free access to significant portions of available data, the software can catch many patterns and mistakes that slip by human oversight. This allows for medication errors to be caught before they cause problems, schedules for more accurate staffing needs, and follow-up plans for handling emergency-room frequent fliers.
But that's not the only place where AI can come into play to help improve medical care, with analytics having another area of interest for the medical field: real-world outcomes from prescription medications. Instead of being limited to lengthy, limited clinical trials, drug companies can analyze long-term usage of a specific medication through real-world experiences, providing a wider, deeper pool of data for future research.
That's why up to 80 percent of healthcare business executives are investing in Big Data. Instead of drowning in medical journals, a doctor can digitally analyze their patient's symptoms to find the right process for exceptional outcomes.
"The value of VR in medicine and healthcare is expected to grow over 30 times to U.S. $285 million in 2022. Virtual healthcare practices for annual patient visits are expected to save U.S. $7 billion in economic value."
Virtual reality (VR) meets a wide range of needs for patients and healthcare providers. Patients who have traditionally been provided with opiate pain medications are now often provided with a VR headset to help distract them from their post-procedure pain, reducing the risk of opiate addiction.
Residents who are still honing their techniques, physicians dealing with a difficult case or surgeons who are working through a unique procedure can use VR to ensure that they can provide the patient with the best possible outcomes. For people living in remote areas, VR allows them to be seen by a doctor without having to travel many long miles in search of medical care.
"Between 2010 and 2016, the number of U.S. hospitals with a 3D printing facility grew by 3,200%."
If you're a fan of the television series "The Good Doctor," you may recall an episode in which a bridegroom's shattered femur is replaced with a titanium femur the medical team created on-site using a 3D printer. Though this may seem like Hollywood pressing medical science to the edge of science fiction, we're not that far away from similar technology.
First tested in 2007, 3D-printed orthopedic implants provide a more customized approach to the patient's existing skeletal structure, reducing pain and wear while improving rehabilitation times. Further refining of existing technology puts us closer to being able to use 3D printers loaded with biological material to recreate tissue and even organs, making it easier to reduce the risk of rejection in skin grafts, organ transplants and similar procedures.
Surgical tools can now be 3D-printed that are customized to the patient's specific anatomy, reducing the amount of space needed when undertaking a surgical procedure and reducing collateral damage to nearby structures in the process. Using advanced imaging, surgeons can now use 3D-printed models of a patient's specific anatomy to practice prior to a surgery, improving outcomes for the patient.
VSS's Role in the Future of Transformation
"We are focused on supporting experienced healthcare executives with flexible capital solutions that can evolve within a technology-driven landscape to take their businesses to the next level. Our healthcare portfolio reflects this through our investments in solution providers that help hospitals improve their financial and operational performance, along with achieving compliance integrity."
By seeing the potential for growth and improvement in the digital transformation process, VSS is leveraging its equity to help healthcare businesses work successfully through the process, including using analytics and AI to help determine the right investments. Compared to the industry standard value multiplier of 12-15 times, healthcare businesses with a strong technology component are seeing multipliers of 15-17 times, while well-managed healthcare tech businesses are seeing multiples of 23-25 times their EBITDA.
But beyond the financial benefits, the superior health outcomes that are realized from adding technology and digitally transforming a healthcare business help keep passionate, caring providers active in the field.
Read the full article: EBITDA levels soar for well-managed healthcare technology companies