Q&A: Deloitte’s Peter Micca on the digital well being funding growth, going public and value-based care

Digital well being is shortly evolving and rising onto the primary stage of healthcare. The final two years have seen an unprecedented quantity of enterprise {dollars} pouring into the area. As we speak we’re additionally seeing digital care corporations exit and enter onto the general public markets, both via an IPO or a SPAC merger. 

Over time, Peter Micca, a associate and Nationwide Well being Tech Chief at Deloitte, has had a first-hand take a look at lots of the modifications in digital well being and revealed quite a few experiences on the business. Micca sat down with MobiHealthNews to speak about SPAC, COVID-19 and the way forward for value-based care. 

This interview has been edited for size and readability. 

MobiHealthNews: I might like to speak just a little bit in regards to the traders, and begin with SPACs. I do know you’ve got written about that, and we’re simply seeing tons of them in digital well being. What is going on on there? Why are corporations selecting to go that route? And are you seeing principally smaller corporations going that route, or is it type of a broad swath of corporations doing that?

Micca: SPACs are simply one other type of finance. And in case you’re an rising progress firm, and also you want progress capital or progress fairness, you could possibly both get progress fairness capital via a mortgage, you could possibly do an IPO, you could possibly do a non-public placement via non-public fairness, you could possibly do an alliance cope with a bigger firm and get milestone funds and work collaboratively. Or you could possibly speed up the IPO course of via a SPAC. And that is all it actually does, it accelerates the method with an upfront, predetermined worth primarily based on the negotiated events. 

It is simply one other type of financing. The pipe market or the non-public funding in a public car is necessary to executing that transaction. And the fact is the broader macro financial atmosphere – low rates of interest, low value of capital, excessive entry to capital – has accelerated the method. We’re seeing extra rising corporations fairly than bigger corporations simply due to the valuations which are pursuing these choices.

MobiHealthNews: We’re seeing tons of cash being invested into the digital well being area. Do you suppose that is sustainable, or is it a little bit of a bubble? What do you suppose’s occurring by way of this and the large valuations too?

Micca: I get that query lots. I am not a banker, I am not an economist. I can not predict the [future] macro and micro financial atmosphere. What I’ll say, although, is that the demand for digital healthcare options in healthcare was delivered to life in a really important means by COVID. It turned evident and clear to the common American the significance of healthcare expertise in a means that we could not have imagined. 

You see it in telehealth, the place in a really brief time period, there are now a really small group of public telehealth corporations which have all merged or consolidated or completed a transaction in a time horizon that for different industries takes years to consolidate. And so in our expertise, in healthcare, when the patron, or the insured, turns into evident of a development, it accelerates the atmosphere as a result of in the end the patron is paying increasingly, [and] is contributing increasingly to the rise in healthcare prices.

MobiHealthNews: Yeah, I’d like to speak about … that development of consumerization [in] healthcare. There’s plenty of plans the place sufferers are paying out extra, what does that do by way of altering the patron or the affected person’s expectations?

Micca: The extra educated the patron base, the extra info and knowledge that they’ve, and the extra it turns into ubiquitous within the financial system, the upper the expectations. Healthcare is among the few industries the place we’re always producing a brand new provide of healthcare. … As advanced as healthcare is, it is actually about two easy issues: how a lot healthcare would you like? And who’s going to pay for it?

The reply to the primary one is, I would like no matter you’ve got. So in case you’re creating extra of it, then I would like extra of it. We should not be stunned if the unit value of healthcare in that atmosphere goes up. … After which the second query of who’s going to pay for it, the common shopper in America would say, nicely, not me, as a result of I’ve already paid for it after I paid my insurance coverage premium. …

So in that ecosystem, in that atmosphere, the fee retains going up, which is why healthcare inflation is outpacing most different sectors. And so the one true answer is expertise, and the patron taking a bigger duty for their very own healthcare via their habits patterns. And that’s the hardest half.

MobiHealthNews: By way of Medicare Benefit, the place the onus is on the supplier, do you suppose that is going to incentivize suppliers to undertake [digital tools] in a means that maybe they [hadn’t before]?

Micca: There have been two limitations to telehealth earlier than COVID. One was the regulatory atmosphere round how physicians get credentials throughout state boundaries and borders and the like, and the opposite one was reimbursement for Medicare contributors. If you’re a doctor, had been you reimbursed on the similar quantity for a telehealth go to as in-person? Traditionally the reply was no. COVID a minimum of briefly type of leveled the taking part in area, a minimum of with respect to reimbursement, and allowed for the patron to a minimum of make a requirement choice, not making an allowance for value, as a result of it wasn’t an element. 

Over time, I feel the selections we make from a regulatory perspective and the reimbursement mechanisms and incentives we apply not just for telehealth, for the adoption of all new well being applied sciences, will largely drive the patron adoption of these new applied sciences and providers as a result of now we have a third-party payer system.

There are corporations that simply have direct-to-consumer options which are paid out of pocket. And though that will get into the dedication of the entire value to healthcare, it is largely from the third-party payer system. 

MobiHealthNews: Is there something I have not requested you, or another matters that you simply suppose aren’t being written about or mentioned that perhaps must be?

Micca: I maintain going again to how a lot would you like? Who’s going to pay for it? The issue is everybody desires every part, however nobody desires to pay for it.