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Trends Watch: Venture Capital Investing in Health Care

Nov 18, 2021

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

 This week, Elana talks with Jud Mackrill, General Partner, Mammoth Scientific.

What is your outlook for VC investing in health care?

The last 18 months have provided a deep insight into how important innovation is in health care. No one would wish for change to come at the price that the pandemic has demanded, but the world is now physically and emotionally invested in health care innovation in ways we never would have been otherwise. What's happening behind the scenes to move innovation forward is going to continue to revolutionize medicine. VC investing is the fuel that moves life changing advances forward and with the right firms, it provides the environment for greater levels of collaboration.

Where do you see the greatest opportunities and why?

The greatest opportunities lie in the areas of the health care community's greatest strengths. Innovation is already moving swiftly across medical devices, biotechnology, health tech, and fintech. Our current economic system values platforms that bring communities together and we’re already in the middle of some tremendous platform plays in each of these sectors. Consumers, health care providers, governments, payers and other stakeholders have been challenged over the past year to pivot quickly and they have done so. The adaptations that they've all made while under undeniable stress has led to public-private collaborations with far-reaching implications. The push for interoperable data and data analytics use, as well as virtual health and other digital innovations is tremendously exciting.

What are the greatest challenges you face and why?

A common difficulty for health care founders is how closely their regulatory strategy is tied to their reimbursement and financial strategy. We see founders take what they believe is a shortcut path through the regulatory process, like FDA approval, only to find out on the other side that Medicare and insurance companies won’t reimburse anywhere close to the level they were expecting. Those regulatory shortcuts can lead to significant momentum loss. There is a lot of opportunity to streamline that process. In addition, another great challenge the world is facing is around data, privacy and security. If the Colonial Pipeline ransomware attack last May taught us all anything, it's that cybersecurity can have significant immediate impact. The health care sector is generally lagging behind others on this issue, despite the fact that we understand how mission-critical health care infrastructure is to society. The Federal Bureau of Investigation (FBI), Cybersecurity and Infrastructure Security Agency (CISA) and United States Department of Health and Human Services (HHS) are all in agreement about the threat that exists. Taking timely and reasonable precautions around the threat has been difficult for the industry to prioritize.

What keeps you up at night?

There isn't a field where human capital isn't central to success. One of the greatest challenges remains keeping workforces engaged and mentally sharp. The longer the pandemic impedes our personal lives, the harder it is for people, especially women (four times as many women left the workforce in September 2020 as did men) who have historically been taxed with greater levels of caring giving than men, to contribute creatively. Creating spaces of hope and equity requires actual time to think, plan and execute.

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.

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Elana Margulies-Snyderman

Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.

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