As the CEO of a cutting-edge healthcare marketing company, I’m always willing to do whatever it takes to stay on top of pressing topics impacting healthcare investing.
Sometimes, that means taking a couple of days in Miami at the beginning of March and kicking back on South Beach with a Corona and 2000 other registered attendees to hear from leading investors, execs, and founders about the latest trends in healthcare private equity for 2024.
Yeah, my job’s not all bad.
But just because you missed out on the party doesn’t mean you have to miss out on the key takeaways for healthcare investing, so let me share some big insights from the event:
The Path to Growth has Changed
The biggest thing we heard from the get-go is that things are very different than they were two years ago—and not just because of inflation. The shrinking labor pool is a very real problem. During the opening session, 43% of attendees said that their #1 challenge was the labor shortage.
And that’s not just on the front lines but in every layer of the organization, including management and even the C-suite.
The other big topic that came up for a lot of attendees was the difficulty with integrations. And it turns out both of those issues have the same solution:
Hire Good People
This isn’t a new observation, but for two days, it seemed that everything kept returning to this key point.
How do you handle a labor shortage? Hire good people.
How do you grow an organization organically? Hire good people.
How do you build a strong company culture? Hire good people.
How do you make integrations go more smoothly? Hire good people.
Again, this goes for the whole organization, including the C-suite. Good people running mission-driven businesses who invest in talent recruitment will build the strongest companies. You can’t say it too many times: Hire good people.
Follow Your Mission
Of course, once you have good people, you still need them united in a common mission. So good leadership means staying true to your mission. This, in turn, means your mission has to matter, it can’t just be boilerplate corporate jargon, you actually need a strong mission you care about that can inspire others.
That way, when you invest in your employer brand and stay true to your mission, your company will actually stand for something—which will help you attract talent as well as, eventually, potential buyers.
Those were the two biggest high-level takeaways from the event in terms of building a great business, but we also heard a lot of other great advice about building value that I’d divide into three general categories:
1) SCALABILITY & SUSTAINABILITY
They had a poll asking what was the most attractive trait to potential buyers (besides EBITDA, of course).
The top answer, from 37% of responses, was “Scalability.” Close behind at 30% was “Maintainable growth”.
But Matt Podowitz from CFGI noted that “Sustainability” was missing from the poll. He pointed out that growth doesn’t always lead to a successful exit. If you want to grow sustainably, you can’t just focus on rapid expansion; you must find a way to hold onto what made you a great company at 50 as you scale up to 200.
Buying a business is easy.
Building a sustainable business that can scale is a lot harder and requires private equity investors to communicate and collaborate with management teams.
Management Alignment
I know I’ve been hammering marketing-operations alignment, but Rebecca Levy from Summit Health laid out how important alignment is for the management team. She talked a lot about how getting a magical management team where everyone is rowing together is vital to growing an organization—and if you want to grow sustainably, you can’t throw out the people who got the company to where it is.
She said, “Don’t build a company just to sell it; build a company to last.”
Good advice, especially because it’s obvious if you’re just looking to sell, people will recognize that and not be committed. Adding to your staffing and retention issues
So, if you want to grow a great healthcare organization that will last, you need a strong management team that knows how to build a business, and also…
2) MISSION & CULTURE
A strong mission and company culture is something that was mentioned repeatedly.
It’s easy for those of us in marketing to look at a mission and company culture and see a Unique Selling Proposition, something that your company can offer to customers. It absolutely is, but it’s also so much more than that. It affects…
Recruiting & Retention
You have to consider company culture when recruiting. You’re rarely going to find the perfect candidate, but if you have to choose between someone with a little less experience and someone who doesn’t fit the culture, take the perfect culture fit. That’ll further the company’s mission every time.
If someone is a good fit and embodies your core values, they will work well with the rest of your team and make a smooth transition. What they may lack in experience or skills, you can coach or train them. But if someone’s a bad fit for your team to work with, it’s hard to train them out of that.
M&A Integration
Every single speaker agreed that culture is key for pain-free integrations.
Angela Nalwa from Grant Thornton talked about how a smooth integration—and thus a successful acquisition—hinges on a good culture fit.
Stephen Bochner from Korn Ferry discussed how culture integration is the key to growing organizations. A good culture not only allows you to attract new talent but also enables you to retain it. Constant turnover hinders integrations and may result in a loss of critical institutional knowledge.
Lawrence Kraska from Aqua Dermatology meets with every provider during an acquisition. When an acquisition is announced, he and the founder go to each office for 1:1 meetings with all of the physicians. He is adamant that growth “is all about the culture.”
Mission Alignment
One of the great tricks I’ve learned from my work on marketing and ops (MOPS) alignment is that sometimes, the easiest way to get two teams to align is to get them both to align with an overarching mission and goal.
So, it was great to hear Joe Miu from Sheridan Capital Partners discuss using that same strategy to align the whole organization. First, they bring the leadership team together to focus on the mission and values. Then, they have a two-day offsite to bring all the doctors together. They build the mission into the compensation package and even the bonuses so that people are rewarded for living the mission.
That’s a smart way to build an aligned company culture. So once you’ve hired good people, achieved cultural alignment, and have a business primed for sustainable growth, the last step is…
3) OPERATIONAL EFFICIENCIES
You need to look for opportunities across your organization to improve efficiency.
Investors and management teams are usually looking for quick, big wins, but 2024 is not looking to be a year for rapidly multiplying growth. You can still notch some wins; it just involves looking at the smaller stuff. For instance, investors are seeing a lot more revenue cycle management projects this year—not as glamorous as explosive growth, but still going to give you a very real bump in profits.
Don’t Neglect the Back Office
Historically, the back office is one of the last places healthcare companies have invested. And I can personally vouch for that being true, because we’ve had new clients come to us using patient booking systems from before Google was a thing. The back office got stuck with antiquated tech, and nobody cared about fixing it.
But that’s changing in 2024.
Granted, a big reason it’s changing is the HIPAA regulatory enforcement in marketing, which is forcing companies to update their tech and processes. But this is an opportunity for companies to kill two birds with one stone and find some efficiencies in the process.
Embrace Marketing Technology
There’s a great opportunity for multi-site providers to improve operational efficiency by implementing new marketing tech and processes.
I’ve actually written a lot about this topic. If you want more info, read leveraging martech to improve operational efficiency. Let me give you a quick 3-step plan.
1. Improve the Patient Experience.
Doing that at scale means you need:
- Patient Portals
- Online Scheduling
Patients love being able to schedule and view upcoming appointments and results online—and them doing so instead of calling, frees up time for your admin staff.
2. Streamline Productivity
Anything you can automate saves you time and money. Consider:
- Marketing Automation with CRM/PMS
- Chatbots + Live Chat
A Customer Relationship Management (CRM) or Practice Management Software (PMS) with integrated marketing automation lets you automate reminders and post-appointment care instructions. Chatbots and Live Chat let you serve patients without picking up the phone.
3. Implement Call Tracking
Call analytics centralize your call data so you can use it to market effectively, as well as improve operations. Instead of complaints and requests getting lost in the void, AI-powered call analytics can glean insights from calls and deliver insights to improve the patient experience, identify trianing needs, or even new service opportunities.
The insights from HPE Miami 2024 underscore the critical factors driving success in healthcare investing, including talent acquisition, mission alignment, and operational efficiency. As the industry evolves, embracing these pillars will be crucial for sustained growth and value creation. If you’re seeking assistance in driving growth at your portfolio company, don’t hesitate to reach out to Cardinal. Our experienced team is ready to share proven patient acquisition strategies tailored to high-growth, multi-site provider groups. Contact us today to learn more and propel your portcos forward.
