Healthcare Investment Leader Interview
Vice President, Sandbox Industries
- The Interview
Q1: Looking back on the last 90 days, what are some of the bigger deals (M&A, funding rounds) that you think will have a big impact this year?
The place my head went was all the existing incumbents that are aiming to get ahead of what is happening in healthcare. I think of transactions like Best Buy buying GreatCall and Critical Signal Technologies (both companies do remote patient monitoring, or RPM). An observation is that the quality of sensors and devices are finally at a point where they can be effective for care management purposes, this makes RPM companies more interesting to manage costs. The Best Buy acquisition signals that retailers realize that healthcare is an enormous opportunity.
Another company that comes to mind in the frame of large retailers trying to figure out the healthcare market is Walmart. Walmart will be a really interesting company to watch the next few years. The partnership they put together with Beacon Health Options is illustrative of what they can do. Their footprint is impressive - I think something like 50% of Americans enter a Walmart every week. If you can imagine a Walmart location being used as a place for chronic care management or behavioral health, you start to get a sense of how much of an impact this could have on the healthcare market.
Q2: Looking ahead for the next 90 days, how active do you think capital investment players will be in relation to investments with potential Medicaid revenues?
If you understand the fundamental incentives for the patient, the insurer, provider, state and federal government, I think there is a lot of opportunity. It's easy to think that Medicaid rates are a constant re-basing exercise and that profits will get squeezed. But if you understand that there are profits to be made through utilizing technology and services for care management, member engagement etc., there are significant dollars to effect while doing a lot of good. As risk adjustment emerges (e.g., MA), as more dollars are allocated toward non-medical interventions (e.g., recent NC bid), and as more programs get integrated with Medicare benefits for dual-eligible members, there will be lots of opportunity for investors to put capital to work. 1 in 4 Americans are on Medicaid. You just can't ignore such a large area of spend.
Here at BlueCross BlueShield Venture Partners, we are very active and excited about the opportunity in Medicaid. We have made six different investments out of our most recent fund in companies that touch Managed Medicaid dollars.
Q3: What advice would you give to your peers about vetting potential healthcare opportunities?
I'd take this advice as a biased point of view, because in many ways I believe this is the strength of our model, but if you take time to really understand the incentives of all constituents involved in the healthcare system, to see how the game is played, there is investment opportunity in a lot more places than you might think.
Mr. Bhansali helps manage the Fund’s investments in Healthify, ExactCare, Payfone, Wellspring, and Swipe sense. Prior to joining Sandbox, Binoy was a consultant at Accenture advising healthcare organizations on mergers and acquisitions while also working part-time at a social impact investment firm, Impact Investment Partners. Binoy started his career at Citibank in its investment banking group where he worked primarily within the hospital sector. Binoy holds a BA in Economics and a BA in Psychology from Northwestern University. He is a member of the Kauffman Fellows Program, Class 23.
About BlueCross BlueShield Venture Partners
BlueCross BlueShield Venture Partners, L.P. is a corporate venture fund licensed by the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield companies. The fund invests in promising emerging companies of strategic relevance to Blue Cross and Blue Shield companies. Sandbox Industries is the exclusive provider of investment management services to BlueCross BlueShield Venture Partners. For more information, visit www.bcbsvp.com.