Driving Healthcare Innovation: Private Equity’s Role in the Tech Revolution

Article by Karin Hyland, Partner and Deputy Head of Co-investments at Patria Investments and Andrew McMillan, Investment Manager at Patria Investments

The global healthcare system faces mounting pressures: an aging population, rising lifestyle diseases, and increasing consumerisation.

The current UN projections suggest that people aged 80 or over will outnumber infants by the mid-2030s. This inevitable acceleration in the pace of global ageing will consume further resources, stretch dependency ratios and ultimately significantly inflate the cost of healthcare delivery globally.

These dynamics are already presenting clear challenges within regional healthcare systems, as rising costs continue to drive the creation of underserved patient populations, otherwise known as “medical deserts”. This phenomenon was originally observed within rural communities, however, is becoming increasingly widespread throughout many developed countries including the US, where around 80% of the nation’s counties lack sufficient access the health services, and France, where nearly half the population have abandoned or postponed required healthcare due to difficulties accessing primary care.

Fortunately for us, the healthcare profession has a long-term track record of successfully solving challenging problems via the relentless pursuit of medical innovation. Historically, this has taken the form of science-led breakthroughs, however, developments in the 21st century are increasingly taking place at the confluence of health and technology, with artificial intelligence, advanced robotics and precision diagnostics equipment now occupying prominent roles at forefront of medical innovation.

We see these advancements in technology taking place within smaller, more agile businesses that are unencumbered by legacy service models and technology stacks. As such, these organisations are accelerating the pace of change within the healthcare industry by leveraging technology to develop cheaper healthcare delivery models, novel treatments and superior drug discovery processes. These are the type of companies Patria GPMS seeks to invest in through our mid-market healthcare strategy.

Mid-Market Healthcare Assets Leveraging Technology to Drive Positive Returns for Patients, Providers and Investors

• Enhancing Access to Healthcare: Increasing demand for accessible and convenient healthcare solutions underpins our interest in digital health platforms. For example, our investment in DocPlanner, a rapidly growing two-sided digital platform which connects patients with healthcare professionals, streamlines access to medical professionals. Additionally, DocPlanner provides doctors and clinics with a software as a service (SaaS) tool used to optimise their patient flow, reduce no-shows, and digitize their practices, which in turn enables them to spend more time with patients and ultimately improve healthcare outcomes.

   

• Improving Diagnostics & Patient Outcomes: Advances in precision medicine, surgical robotics, and AI-driven diagnostics are transforming patient care. Brainlab, a Patria GPMS portfolio company, exemplifies this trend. They develop software-driven medical technologies, including mixed reality robotics and AI-enabled drug delivery systems, for surgery and radiation therapy. These innovations enable more precise diagnosis and treatment, driving material improvements in patient outcomes.

   

• Promoting Healthy Aging Practices: As the global population ages, the focus shifts towards proactive and preventative healthcare (i.e. “healthy ageing”). HealthMap, another portfolio company, leverages big data analytics, advanced technology, and clinical expertise to improve the health of people living with chronic conditions like kidney disease, diabetes, and high blood pressure. This proactive approach empowers individuals to manage their health and promotes healthy aging.

Overall, the rapid pace of innovation and technology-led growth drivers outlined above continue to make HealthTech an attractive segment for mid-market private equity investors. Having said that, identifying a winning product set, developing capital efficient and scalable business models, unlocking opportunities at attractive valuations and navigating stringent regulatory landscapes requires deep sector knowledge and networks. Patria GPMS partners with, and invests alongside, specialist funds which possess highly relevant domain expertise, and are therefore able to access highly innovative companies capable of driving both strong returns and positive change within the global healthcare industry.