The Healthcare sector, one of the most important, complex, and largest industries, is composed of a broad spectrum of companies that offer medical services and products. Healthcare companies may sell medical devices, insurance, and drugs to patients. Access to capital is crucial for the development of hospitals, digital healthcare companies, and other healthcare institutions.
Easy access to capital for healthcare companies will not only benefit them but also shape the future of the healthcare system. Financial capital will fund the setting up of the healthcare company, acquire the latest technologies, offer new services or programs, and replace old healthcare equipment. Equipment, technology, and facilities in all healthcare companies must be kept updated and in good shape.
Some hospitals may need to be reconfigured and develop alternative sites for ambulatory care, critical care, and long-term care. Healthcare institutions will always have substantial financial capital needs to survive and grow.
Sources of Financial Capital for Healthcare Companies
Financing the current as well as long-term assets of the healthcare companies must be dealt with properly. The most common sources of capital for healthcare companies include:
- Government grants: Spending by the government on public health increased to around $100,000 in 2020 to benefit the mass population.
- Own Funds: This may include funds generated from previous operations, sale of stock, or ownership certificates, sale of long-term and short-term debt instruments. Healthcare providers may also sell previously owned assets to fund their healthcare establishments.
- Private Equity Firms: Private equity investment is growing in the healthcare sector. These firms help healthcare companies to become financially stable and generate more efficiencies.
Top Investing Trends in the Healthcare Sector
The ongoing pandemic situation has changed the healthcare sector to a great extent. 30% of the healthcare visits were offered by telemedicine due to the COVID-19 situation. The shift to telehealth has opened up investments driven by high utilization, remote or digital monitoring of patients, and improved technologies.
Government and private equity firms are offering extensive financial support to these telemedicine companies to combat the pandemic situation. Moreover, telehealth can reduce administrative costs and drive efficiency.
- Remote Patient Monitoring
Investment in remote patients monitoring has doubled to $941 million from $417 in 2020. Consumers have become more dependent on remote patient monitoring solutions owing to the COVID-19 situation. Healthcare companies can now have access to patients across the world with fewer capital requirements.
- Digital Health Consumerization
Consumers mainly demand three primary things when it comes to healthcare – low price, easy access, and positive outcomes. Patients now want a seamless digital healthcare experience while scheduling appointment dates, ordering medication, and following up on communication.
Healthcare companies are now investing in the latest technologies to seamlessly integrate healthcare data and store medical records electronically.
Healthcare investment is often driven by societal changes, technological advances, patients’ needs, and others. With the emergence of COVID-19, the healthcare sector has been focusing more on remote patient monitoring and virtual care. With the increase in government grants and private equity investments, there is easy access to capital for healthcare companies now.