FCA Investment thesis reports
FCA is actively interested in making investments across the following areas of healthcare as we believe they are ripe for improvement by innovative startups.
Free Market Healthcare (click the title to see the full PDF report)
As it becomes increasingly apparent that the United States healthcare system is flawed, unique models for healthcare are emerging in a variety of forms.
Wound Care
Despite some estimates showing wound care accounts for over $50 billion dollars of annual expenditure (over 10 times the annual budget of the World Health Organization), it’s an area often overlooked by healthcare professionals and investors alike.
Maternity-related care is one of the largest expenses for the U.S. healthcare system today. The growing cost of care is shouldered by individuals, employers, and insurers alike, threatening to reach unsustainable levels. Despite the volume of capital these stakeholders are sacrificing for maternity and birth services, the country is still experiencing an epidemic involving soaring rates of premature births, postnatal complications, unnecessary cesarean procedures, and maternal mortality.
In a growing, dynamic healthcare regulatory environment it is becoming consistently more important for vendors to provide extremely flexible software solutions to all clinicians. Clinical decision support systems are poised to become the user interface of choice for clinical interactions with health IT.
Startups Improving Star Ratings
Medicare is undergoing a remarkable reorganization. In recent years, Americans over the age of 65 have shifted from traditional Medicare plans to Medicare plans operated by private insurers — also known as Medicare Advantage (MA) plans — at staggering rates. In light of this growth, MA insurers are fighting to stay competitive. One key component: star ratings.
The nursing profession, along with the entire US healthcare system, is experiencing a period of dramatic change. New models of care are burgeoning, and new technologies are being developed and adopted to transform the way healthcare is measured and delivered. With nurses on the front lines handling the majority of hands-on patient care, innovative companies and entrepreneurs are increasingly recognizing the opportunity in supporting them with technology.
Despite the rise in availability of healthcare data, challenges to effectively using it remain. The existence of data silos in healthcare in particular is an inhibitor. Companies specializing in the distribution and packaging of healthcare data stand to both provide an unprecedented level of specificity to providers while showing excellent returns for investors.
Startups Using Nutrition to Improve Healthcare Outcomes
Building healthier eating habits is an onerous undertaking, and can oftentimes be discouraging – the American food and beverage industry has certainly not made it any easier, either. At FCA, we are excited about the entrepreneurs who recognize this and seek to find a long-term solution to improving healthcare outcomes through concentrated nutrition guidance.
End of Life and Palliative Care
End-of-life care is an important part of the care continuum for patients and the families of patients with terminal conditions or those encroaching upon old age. Palliative care is one option for end-of-life care and is specifically focused on symptom and pain management for patients with serious illnesses; it is not necessarily limited to patients in their last days or months of life and can be administered across a variety of care settings (from home to hospital).
The Oncology space offers an attractive market opportunity for the rapidly growing number of cancer-focused startups. The transition to value-based reimbursement is fueling the market by pressuring providers to improve processes and reduce costs. Although relatively new, MIPS and the Oncology Care Model supply the incentive for providers to adopt technologies that succeed in making cancer care faster, better, and cheaper. Skeptics are pessimistic about the longevity of MIPS as Congress takes aim at the sometimes-excessive reporting requirements, but experts agree that the concept of value-based reimbursement is part of healthcare’s future.
The U.S. healthcare system continues to shift toward a value-based care model as payers incentivize treatment value over volume (fee-for-service). Innovators and entrepreneurs are forming new businesses focused on delivering better care outcomes at a lower cost to support this shift. These startups work directly with payers, patients, and providers to generate solutions to improve patients’ health by rethinking delivery of care and disease prevention. Many of them aim to rein in runaway healthcare spending by focusing on the costliest diseases and conditions, and charging payers a flat fee for services rendered.
The Nexus of Blockchain and Healthcare
While it is still very early days to fully comprehend blockchain’s role in healthcare, we believe this technology has the potential to address some of the top concerns in data sharing and security within the healthcare system. We are actively seeking investment opportunities into companies using blockchain to solve unique problems that widely adopted technology solutions fail to address. Initial Coin Offerings have changed the role venture capital firms play in funding blockchain startups; however, because of the unique complexity and difficulty of building a healthcare startup, having a value-added capital partner who understands the intricacies of healthcare can create an unfair advantage over competitors without these types of investors.
The opioid epidemic offers three clear entry points for startups. A biotech enabled solution will yield the most profit and has a clear path to commercialization. A patient or addict centered solution may gain user traction but has an unclear path to profitability. The clinician centered solutions are gaining modest traction; however, the value creation model is difficult to ascertain. Clinicians would benefit from software based tools, but the patients and payers absorb the costs associated with addiction. Therefore, a startup trying to enter this space would have to develop a product that provides benefits for both providers and payers to gain significant market penetration.