Finding the Right Dose of Portfolio Risk

Investors are betting big on consumer-centric disruptions to healthcare. After years of horizontal integration between healthcare organizations, industry outsiders are beginning to attempt massive vertical integrations with organizations like healthcare providers and pharmacies. Investors believe that these opportunities have huge potential for growth.  

Industry outsiders – like Amazon – are buying up insurance providers, pharmacies, and medical practices. Investors see these outsiders’ expertise in customer service and logistics as catalysts for innovation, cutting costs, and overall service improvement in healthcare.

The prize and motivation for these deals is the consumer. Giants like Walmart and Amazon want to make their suite of offerings – including groceries, pharmacy services, and now healthcare – the most attractive to consumers.  

Healthcare is not known for facilitating positive customer experiences.  If outsider companies can bring their consumer-friendly service models to healthcare, it will give them a competitive edge in the market.

Investors see these consumer-centric incentives driving business strategy and becoming the next major growth opportunity in healthcare, so they are placing their bets on the players they think are best poised to make it happen.

To hear more about upcoming disruptions to healthcare from an investment perspective, listen to Steven Shill, partner and national leader of The BDO Center for Healthcare Excellence & Innovation, and a panel of influential executives and investors, in the third episode of BDO’s Healthcare Rx Podcast.
   
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