Paragonix Technologies — a company that launched in 2010 as a response to the lack of innovation in the donor organ preservation and transport process — closed a Series B funding round on Tuesday. The $24 million round was led by Signet Healthcare Partners.
The Cambridge, Massachusetts-based company provides transplant centers and organ procurement organizations (OPOs) with medical devices designed for the preservation and transportation of donor organs.
The traditional method of preservation requires the organ to be transported in a cooler of crushed ice. Due to unstable temperatures, many facilities that receive organs preserved in this manner report that they arrive frozen and damaged, said Paragonix CEO Lisa Anderson.
“Paragonix determined there was an opportunity for a more scientifically reproducible, measurable and reliable solution to transporting an organ from a donor to recipient,” she said. “We set out to create a new standard for organ preservation and transport that would provide the care and quality of handling commensurate with transporting such a valuable gift and improve patient outcomes worldwide.”
Paragonix’s devices are made from a series of interconnected systems that work together to provide a cool and sterile environment within a consistent range of 4-8° Celsius. The company sells three devices, each designed for a different organ (heart, lung and liver). All have been cleared by the Food and Drug Administration.
Each device works slightly differently based on specific user needs related to the organ type, Anderson said. For example, the heart preservation device has pouches filled with proprietary cooling solutions that keep the organ at optimal temperatures during transport. The heart is contained within a nested canister and is then housed in a wheeled shipper container that works to protect and insulate the inner contents.
All of Paragonix’s devices display the organ’s temperature while it is being transported. They also use bluetooth monitoring and tracking technology to allow surgeons to track the organ’s exact location throughout its journey, even in flight, Anderson pointed out.
Paragonix markets and sells its devices to transplant centers and OPOs across the U.S. and Europe. Last year, over one in five thoracic donor organs transplanted in the U.S. were preserved using a Paragonix device, Anderson declared. She also said that 19 out of the 30 largest U.S. heart transplant programs rely on Paragonix devices to safely preserve, track and transport organs to their intended recipients.
There are a few other companies that make devices to preserve donor organs, such as Organ Recovery Systems and Bridge to Life. But Anderson contended Paragonix’s devices are easier to use.
“Most other organ preservation devices are extremely complicated, labor intensive and require special personal or extensive training, while Paragonix’s devices are lightweight, user friendly, and a user can be trained in less than an hour,” she declared.
Anderson explained that her company’s main competition is the legacy way of transporting organs, as many organizations still receive damaged organs that were transported using the over-ice method. The medical industry needs to move away from this method of organ preservation because devices like the ones that Paragonix sells are clinically proven to improve patient outcomes and reduce the risk of post-surgical complications, she declared.
Picture: Getty Images, ThomasVogel
Mihir Tanna, Associate Director, S K Patodia & Associates (external link), a chartered accountants firm that offers consultancy, audit and tax services, answers your tax queries.
Gulshan Singh: If I buy a property from my savings by making online payment to seller, in name of my daughter-in-law and she gives it on rent, will she or I have to show it as my income in my income tax return.
If property is taken in joint name of my daughter-in-law (who is working) and in my wife’s name (who is not working and has another property), how should income tax return be filed by them or rent will have to be shown in my income tax return (50% of my wife’s share by clubbing provision) or 50% by my daughter-in-law in her return or 100% by me in my income tax return? Thanking you very much
Mihir Tanna: If an individual acquires asset in the name of his/her son’s wife or spouse, clubbing provisions of income tax will be applicable.
It will considered as transfer of asset for inadequate consideration and income from such asset will be clubbed with the income of the individual, who actually spent money (transferor being father-in-law/husband in our case).
Swadhin Sahoo: I am a senior citizen retired pensioner.
I had intention to sell both my properties located in one town and to invest in a property in another town where I wanted to settle in my retired life. I wanted that the sale proceeds of my two properties should be almost same as the purchase value of a single property in another town to settle there.
I had bought a property in 2015 at Rs 40 lakh in my single name and sold in Feb 2022 at Rs 52 lakh. The buyer deducted 1% TDS and filled in form 26QB and I got form 16(B) from buyer and details of TDS are seen reflected in my Form-26AS.
Thereafter, my second property that I had bought @Rs 7.3 lakh 20 years back, was attempted to dispose, but did not materialise till now.
Anyway, I bought a 5-year-old jointly owned property from a couple at Rs 80 lakh in June 2022 and deducted 1% TDS (@0.5% from each owner), filled in Form 26QB and provided form 16(B) to the sellers.
So, I invested the sale proceeds of my first house ‘within a year’ of its disposal, in buying a house from Long Term Capital Gain point of view.
My IT Return for AY 2022-23 was filed in July 2022 and it got approved. The 1% TDS deducted by buyer on my first property sale got refunded/ adjusted.
I am still trying to sell my second property ‘within one year’ of buying the June, 2022 property. I want to do this to take benefit of Long Term Capital Gain Tax.
I want to know whether I am going to get the IT benefit by selling my second property ‘within one year’ of purchase of my June 2022 property?
I am more eager to know how sale of first property in financial year 2021-22 (Feb 2022), purchase of a property in FY 2022-23 (June 2022) and again sale (proposed) of second property, (all within 2 years from LTCG point of view) are shown in my next IT Return (AY2023-24)
I am eager to hear from you, Sir!
Mihir Tanna: If person wants save tax on capital gain, person should acquire another residential house within a period of three years from the date of transfer of the old house or should construct a residential house, within a period of one year before or two years after the date of transfer of old house.
But law is not clear on the matter of claiming exemption on same property against capital gain earned on two separate properties. If claim is made in ITR, it can be subject to litigation.
Thus, considering your post retirement planning, it is not advisable to claim exemption in the subsequent year.
Seshasayee Krishnan: Sir I am a sr ctzn of 77 yrs. I missed my ITR filing in July 31st for AY 2022-23 and hence I have to file belated return with penalty. As per yr statement penalty is UP TO Rs 5000. If it is up to Rs 5000 does it vary from person to person. Please clarify. Also as a sr ctzn I missed deadline on July 31, 2022 due to tech glitches. Can I request ITO to consider for waiver of penalty as the delay is not intentional. Please examine. Thank you.
Mihir Tanna: The due date for filing returns for FY 2021-22 is 31st July 2022. If you miss filing ITR by the due date, you can file the belated return by 31st December 2022. However, you are required to pay the penalty for late filing.
The maximum penalty of Rs 5,000 will be levied if you file your ITR after the due date 31st July 2022 but before 31st December 2022.
However, there is a relief given to small taxpayers — if their total income does not exceed Rs 5 lakh, the maximum penalty levied for delay will be Rs 1,000.
There is no provision under income tax to waive late filing fee.
Read more of Mihir Tanna’s responses here.
Note: The questions and answers in this advisory are published to help the individual asking the question as well the large number of readers who read the same.
While we value our readers’ requests for privacy and avoid using their actual names along with the question whenever a request is made, we regret that no question will be answered personally on e-mail.
Do you have any personal income tax query?
Please mail your queries at getahead@rediff.co.in with the subject line ‘Ask Mihir’.
Mihir Tanna, Associate Director, S K Patodia & Associates (external link), a chartered accountants firm that offers consultancy, audit and tax services, will answer your queries.
Pravin M T: A company invests in stocks on 1.5.21 for Rs 30 lakh, the market value of those equity shares is 20 lakh as on 31.3.22. Can a company debit profit loss a/c on 31.3.22 for 10 lakh?
Mihir Tanna: In case of Investment in equity shares, it is shown at cost in the balance sheet and notional loss/gain is not allowed as deduction under Income Tax. For accounting entries and impact in the books, please consult your statutory auditor who can advise after considering applicable accounting standards.
Kannan Thangaraj: I have taken insurance with Kotak Mahindra about five years back sum assured being Rupees four lakh fifty thousand only. I pay yearly premium of Rs 50,500. I received in this financial year money back of Rs 60,000. I want to know whether this sum received as money back is taxable.
Mihir Tanna: Where the premium paid, is more than 10% of the sum assured, amount received from a life insurance policy, is fully taxable. Further, in case of ULIP plans, if policy is acquired after 1st February 2021 and single/aggregate premium paid is more than 2,50,000; amount received under policy is taxable.
In your case, if you fulfill both the conditions, amount received will not be taxable.
Vivek Etelvino Rodrigues: My mother, a housewife and a non-tax payee senior citizen had only one FD on her name from 10.02.2011 to 09.02.2019. of Rs 90,136 with a maturity value of Rs 2,06,538 at 10.5%. However, when the FD was automatically renewed the bank renewed it for only Rs 1,76,550. She did not realise it and this year she realised it and approached the Bank. The Bank says that they cut the amount as TDS as she had not submitted her PAN as per the rules then. She had no PAN card then but subsequently she did get a PAN card. Can she get the deducted amount and if so how?
Mihir Tanna: A refund of TDS is possible only by way of filing an Income Tax Return within the specified due date. It is understood that the bank had reinvested the FD maturity amount (net of TDS) in February 2019 itself, ie, in FY 2019-20 and the due date of filing Return/ belated return for the said year has already passed long. Therefore, it is not possible to file a Return for FY 19-20, hence, no refund can be claimed.
However, in case of substantial amount of refund, it is advisable to file condonation application with jurisdictional Commissioner of Income Tax who can allow you to file revise return if reason for non-filing of correct income tax return is reasonable/genuine.
Read more of Mihir Tanna’s responses here.
Please mail your queries at getahead@rediff.co.in with the subject line ‘Ask Mihir’.
Note: The questions and answers in this advisory are published to help the individual asking the question as well the large number of readers who read the same.
While we value our readers’ requests for privacy and avoid using their actual names along with the question whenever a request is made, we regret that no question will be answered personally on e-mail.
Do you have any personal income tax query?
Mihir Tanna, Associate Director, S K Patodia & Associates (external link), a chartered accountants firm that offers consultancy, audit and tax services, will answer your queries.
Please mail your queries at getahead@rediff.co.in with the subject line Ask Mihir.
Somaskandan Hariharan: I request you to clarify the following point.
I am having a housing loan with an outstanding principal amount of Rs 10 lakh (The flat where I am presently residing. Housing loan was taken during the year 2017). I got capital gain by means of sale of other flat to the tune of around Rs 80 lakh. By repaying the outstanding housing loan of Rs 10 lakh can I save myself from paying capital gains tax?
Mihir Tanna: Repayment of housing loan is allowed as deduction in two parts. First repayment of principal can be claimed u/s 80C (up to 1.5 lakh) and second payment of interest which can be claimed as deduction. Interest deduction is allowed subject to certain limits depending on the fact that house property is used for self-occupation or given on rent.
In addition to that you can save tax on capital gain by investing in another house property or you can acquire specified bonds, if you fulfill other specified conditions.
Bhalwant Singh Raju: Re. Revision in Form 67 for AY 2019-20 & AY 2020-21 and submission of request for Rectification. Erroneously, I have claimed the Tax Relief under section 91, instead of section 90/90A Under DTAA with Canada, which naturally have not been given by IT Dept and Assessment carried out under 143(1).
It is a plain typographical error on my part.
Can the error be corrected by revising Form 67 and submitted with a Rectification request to IT Dept? Please suggest a way out.
Mihir Tanna: Mistake which is apparent from the records can be rectified by Income Tax Department and mistake which requires debate, elaboration, investigation, etc. cannot be rectified. Accordingly, if you can specify in the application that section 91 of Income Tax Act 1961 provides for Unilateral Relief which states that when there is no DTAA between two countries, you have certain income (which is doubly taxed) from Canada with whom India has signed DTAA and section 91 is not applicable in your case. Accordingly, you can request to assessing officer that inadvertently while filing Form 67, you have selected wrong section, as it is mistake apparent from the records, kindly consider revised Form 67 and pass rectification order u/s 154 of the income tax act.
Sadruddin Khoja: I am a retired govt. servant and get pension. Also I get Interest from Deposits, Saving and Acc. Int. I show this income in my Income Tax returns filed in Form ITR-1 SAHAJ. During the current Financial Year I have received the maturity amount of my PPF maintained in the Post Office. Out of the amount received I have a certain amount given as a gift to my spouse. She has invested the said amount received by her from me as a gift in the SCSS A/C and gets interest on that amount.
I want to know whether the amount she receives as interest from the amount given by me is to be included in my income and to be shown in the Income Tax Return. If so, at what place i.e. in which column?
I have to show the income so included as I do not see such places or column. In which I have to indicate this amount Sr. No. B3 Income from Other Sources along with the Interest received by me from Deposit etc.
Since the amount of interest received by my spouse is included in my Income, Whether the said amount is also to be shown in her Income Tax Return or otherwise? As if it is to be shown in her return also then there will be duplication.
This clarification is sought as I file my return myself and since the notice I or my wife may not get. I hope you will kindly guide me in this regard and oblige us.
Thank you in advance.
Mihir Tanna: If taxpayer directly or indirectly transfers an asset to spouse for inadequate consideration than Income from such asset is clubbed in the hands of the transferor. Transferor (taxpayer) should show such income in Schedule SPI of Income Tax Return filed by such tax payer in whose hands income is clubbed. No need to show said income in the income tax return of spouse.
Read more of Mihir Tanna’s responses here.
Note: The questions and answers in this advisory are published to help the individual asking the question as well the large number of readers who read the same.
While we value our readers’ requests for privacy and avoid using their actual names along with the question whenever a request is made, we regret that no question will be answered personally on e-mail.
The rift between hospitals and commercial insurers is age old. But a new survey shows the relationship isn’t going to improve any time soon.
The American Hospital Association (AHA) survey, released Wednesday, found that 78% of hospitals and health systems said their relationship with commercial insurers is getting worse. Less than 1% said their relationship is improving and the rest said it has stayed the same.
The survey included 304 respondents representing 772 hospitals. All of the respondents are members of AHA.
One of the main culprits behind the worsening relationship appears to be certain practices of commercial insurers, such as prior authorization. The report found that 95% of hospitals and health systems said staff time spent seeking prior authorization approval is increasing. Meanwhile, 62% of prior authorization denials are eventually overturned, the report found.
Aside from time spent on administrative procedures, costs may also be a factor in the relationship souring. A whopping 84% said the cost of complying with insurer policies is also increasing.
“Misuse of utilization management tools like prior authorization has several negative implications for patients and the health care system,” AHA said in the report. “Prior authorization denials can result in delays of necessary treatment for patients and ultimately lead to unexpected medical bills. The extensive approval process that doctors and nurses must go through adds wasted dollars to the health care system through overuse of prior authorization, inefficient submission processes, excessive requests for unnecessary documentation and the need to reprocess inappropriate payment and coverage denials.”
AHA also takes issue with claims denials, stating that commercial health insurers are “increasingly delaying and denying coverage of medically necessary care.” However, 50% of claims denials that are appealed are overturned, AHA said.
There are financial consequences to these delays and denials, AHA stated. The survey found that 50% of hospitals have more than $100 million in accounts receivable for claims that are older than six months, totaling $6.4 billion in delayed or potentially unpaid claims among the 772 hospitals in the survey. Another 35% of respondents said they’ve lost $50 million or more in revenue because of denied claims.
“These payment delays and denials for medically necessary care have serious implications for the financial stability of health care providers and compound fiscal challenges plaguing our health care system,” AHA said.
The report also provided several policy recommendations, including streamlining the prior authorization process and increasing oversight on insurers. Additionally, the organization sent a letter to the Department of Health and Human Services and the Department of Labor, calling for action against commercial payers.
“Health care coverage must work better for patients and the providers who care for them. We urge you to take additional steps to ensure adequate oversight of commercial health plans, including those offering Medicare Advantage plans, this open enrollment season,” the letter stated. “Individuals and families should feel assured that the plan they choose during open enrollment will actually be there for them when they need care.”
America’s Health Insurance Plans (AHIP) declined to comment publicly on AHA’s survey, but previously told MedCity News that commercial insurers’ practices are needed to reduce expenses for patients.
“Health insurance providers advocate for the people they serve by ensuring that the right care is delivered at the right time in the right setting — and covered at a cost that patients can afford. Prior authorization prevents waste and improves affordability for patients, consumers, and employers,” Kristine Grow, AHIP spokesperson, previously said. “Health insurance providers have a comprehensive view of the health care system and each patient’s medical claims history and work to ensure that medications or treatments prescribed by clinicians are safe, effective, and affordable for patients. This results in better outcomes and lower costs for patients.”
Photo: santima.studio, Getty Images
From left: Ayush Jain of Revolution’s Rise of the Rest Seed Fund; Ayse McCracken of Ignite Healthcare and INNOVATE Health Ventures; Max Rosett of Research Bridge Partners; and Dr. Hubert Zajicek of Health Wildcatters
When it comes to investment, including healthcare and biotech, companies in the Bay area, Boston and New York tend to get the lion’s share of venture capital. But in recent years there’s been greater attention to investment in companies beyond those regions. The Covid-19 pandemic also played a significant role as people were forced to limit travel and use Zoom to connect their In a panel discussion at INVEST Digital Health, healthcare and life science investors discussed investment strategies and why they are placing their funding bets in states like Texas, Indiana, Utah and Arkansas.
The panel, Investing between the coasts, moderated by Dr. Hubert Zajicek, CEO, partner and co-founder of Health Wildcatters, offered a window into how investors are finding companies that match their investment theses, even in states that are not thought of as startup hubs. The panel was sponsored by Lyda Hill Philanthropies.
“We were the most active investor in Arkansas last year,” said Ayush Jain, a senior associate with Revolution’s Rise of the Rest Seed Fund. The fund, which was started by Steve Case of AOL fame, has made investments in more than 200 companies in 40 states since 2017.
The video platform Zoom has made an indelible impact towards democratizing investment across the country, according to Ayse McCracken, a founder and board chair with Ignite Healthcare in Houston and president of eNNOVATE Health Ventures. Ignite focuses on women-led digital health and medical device startups, while eNNOVATE invests in a broad array of startups across the continent of Africa.
McCracken said it was one of the unintended consequences of the pandemic.
“[Zoom] has allowed us to connect with entrepreneurs all across the country and all across the world and match them with mentors across the U.S. All of a sudden, we were working with an expanded ecosystem coast to coast, and we were working with startups coming from all across the country. We have eight of the 22 companies [in our latest cohort] that are coming from the Texas market — San Antonio, Austin, Dallas and Houston, which is great. We’d love to see Texas continue to grow. Denver has been another location where we’re seeing a number of entrepreneurs come from, also Minneapolis.”
Max Rosett, a principal with Research Bridge Partners, conceded that Zoom has been useful for connecting with and keeping in touch with portfolio companies in areas that would have otherwise been costly to travel to from his offices in Salt Lake City.
“This is going to sound incredibly trite and yet it’s incredibly real. Now that it’s okay to have board meetings over Zoom, life is much easier,” Rosett said.
Research Bridge Partners, which focuses on life science companies, is trying to chip away at what it refers to on its website as the “geographic misalignment” of venture capital in the Bay area and Boston. It also calls attention to trends among larger venture capital firms of creating lab-to-market systems to advance ideas towards financial liquidity that make it tougher for midcontinent principal investigators to access, because these firms favor institutional brand and geographical proximity to their offices.
Although everyone is pleased that the worst of the pandemic appears to be over, Zajicek said that in the past two years the accelerator has received a record number of applications from all over the world, which has spurred the development of a hybrid program combining in-person and Zoom-based interactions with startups in its cohorts. It has added an international flavor to its startup portfolio. Add to that the accelerator’s advantageous base in Dallas, in close proximity to an airport with the most direct flights in the country.
“It has flattened the world in non-trivial ways,” Zajicek said.
Health Wildcatters recently moved its offices to Pegasus Park, a 13-floor building that offers lots of space for healthcare and life science startups to work and connect with investors and collaboration partners.
Jain agreed that Zoom can offer a useful complement to in-person meetings and has made it easier to foster relationships with startups. He emphasized the importance of regional startup incubator and accelerator spaces, which frequently host demo days and other events to bring investors and startups together. They can also prove useful for investors from out of town seeking to plug into the regional startup ecosystem.
“If there’s a city that you gravitate towards, whether it’s because of a particular industry strength, or a personal connection, those are factors to leverage when you build relationships in those cities and find deal flow there,” Jain said. “That’s something we lean on a lot. We’re not lead investors. So we rely on finding opportunities to invest in startups, mostly through local regional investors, accelerators, incubators, places like Pegasus Park, where there’s a ton of companies. There’s some institutions in other cities like this. I think finding those and really honing in on them and building relationships is important.”
After the dizzying pace of digital health investment in 2021, it’s helpful to assess what has happened so far this year and what activity this sector is likely to see for the rest of 2022.
According to this H1 2022 report from Rock Health, digital health funding activity has slowed, a trend that the industry is likely well aware of. Rock Health reports $10.3 billion was raised in the first half, which extrapolates to $21 billion for the year, a marked decline from last year’s total of $29.1 billion.
However, while a projected 27.6% drop in digital health funding is significant, we should be careful not to read too much into it. Activity in the first half of this year is disappointing only directly in reference to the unprecedented level of activity in 2021. This year’s total is very likely to surpass the 2020 total of $14.7 billion, which was higher than 2019’s figure. Looking at the longer trend, digital health funding has been on a strong upward growth trajectory over the past decade – driven by fundamental improvements in technology, an increasingly favorable regulatory environment, and actual realized value from digital health innovations. While 2022 will likely be a reset from the tremendous growth in digital health funding of 2021, this is a healthy correction and an opportunity to realign on core metrics.
Keeping that in mind, it’s worth examining some of the Rock Health findings.
Macroeconomic trends
While the decline in funding this year can be at least partially attributed to a return to normal, investment in digital health has been affected by macroeconomics as well. Though healthcare is relatively resilient compared to other sectors, it’s not immune to the larger forces at play, such as inflation, the risk of recession, and the uncertainty and supply chain disruption caused by war in Ukraine.
Some of the most impacted companies are those selling to large enterprises – including health systems and pharmaceutical companies – who are looking to prioritize their spending initiatives to only the top few with the strongest value proposition, greatest return on investment (ROI), and time to value. Within this environment, it is even more important for startups to be clear about their ROI – measuring and publishing this data when possible – and emphasizing this value to potential customers to ensure their solutions fall within that prioritized list of initiatives during this turbulent period.
Mental health startups
Digital health startups offering mental healthcare secured the top clinical funding spot in H1 2022, according to the research. However, that field is under some scrutiny.
While mental healthcare startups raised a combined $1.3 billion in H1 2022, only $300 million closed in Q2 2022. While there are many reasons for significant quarter-to-quarter variability, one can also look to the public markets where a number of companies in this sector have underperformed both the broader markets and their digital health peers (NASDAQ: PEAR, NASDAQ: LFST, NASDAQ: TALKW). While this sector holds tremendous potential, the fundamental question of how to effectively transform mental healthcare delivery – making it more accessible, personalized, and effective at scale – has yet to be solved.
As a result, as we go through 2022 and into 2023, I expect continued activity in this sector; however, we should also anticipate a step down from the peaks of 2021 and Q1 of 2022 as expectations moderate and valuations recalibrate, which may also lead to a wave of consolidation.
SPACs and M&As
The first half of the year saw a significant slowdown in digital health mergers and acquisitions (M&A), compared to 2021’s record activity. There also has been a steep decline in companies going public.
First, going public. We must acknowledge the relatively poor performance of some recent exits, particularly of firms that went public via special purpose acquisition companies (SPACs) that have affected the digital health sector, in some cases more severely than other sectors. To be clear, the vast majority of these companies are great businesses; however, in hindsight we were not seeing the same performance benchmark requirements for the average SPAC company compared to the average IPO company: namely, a strong, proven commercial business model, reliable quarterly forecasting, and well-established comparables, among other attributes. As a result, public investors were quicker to turn on these companies as the markets dropped and have cooled on SPACs more broadly.
The public market downturn has not spared companies that went public via the traditional IPO process, either. One sector that has received quite a bit of attention has been the tech-enabled services field, which includes major telehealth and hybrid-model care providers (NYSE:TDOC, NASDAQ:ONEM, NYSE:AMWL). During the market peak, many of these businesses saw market caps reflective of revenue multiples of high-growth, high-margin tech companies (20-30x P/S ratios); the recent correction has instead brought their multiples much closer to alignment with premium services businesses (2-4x). Which set of multiples is the more appropriate can be debated, but what’s clear is that this reset has changed how these companies are expected to spend and grow, their plans to go public, and also the thought process of M&A.
While we naturally expect a high-valuation environment to be a catalyst for M&A – acquirers can leverage high-value stock to transact a deal and acquirees are pleased by the attractive prices — we also can expect a wave of consolidation in the lower valuation environment. In particular, there are a large number of established enterprises with piles of cash who are eager to get into the healthcare space, but who mostly sat out earlier waves of acquisition due to high target prices. Just Thursday, we’ve seen the first major sign of this as Amazon (NASDAQ:AMZN) announced an agreement to acquire One Medical (NASDAQ:ONEM) for $18/share – a healthy premium to its recent trading price though below where it traded for much of 2021. As market prices continue to be attractive over the coming 12-18 months, I would expect to see significant waves of M&A ranging from large acquisitions to sector consolidations.
Looking forward to new opportunities
As with many investors, GSR Ventures had its most active investment year for digital health in 2021. 2022 and beyond will undoubtedly bring change as the macroenvironment shifts, valuations and multiples reset downward, and the mix of prominent and emerging digital health sectors undergoes rapid adjustment.
But most importantly, the need for the digital transformation of healthcare has not lessened; if anything, it’s become more pronounced. For as long as that need exists, there will be great opportunities to invest in companies driving that shift.
Disclaimer: Nothing presented within this article is intended to constitute investment advice or recommendation, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by GSR Ventures (“GSR”). Any investment decisions shall exclusively vest based on his/her/its independent discretion and GSR will not be liable for any consequences thereof. Information provided reflects GSR’ s views as of a time, whereby such views are subject to change at any point and GSR shall not be obligated to provide notice of any change. Companies mentioned in this article are a representative sample of portfolio companies in which GSR has invested, which do not reflect all investments made by GSR. An alphabetical list of GSR’s investments is available here. No assumptions should be made that investments listed above were or will be profitable. Due to various risks and uncertainties, actual events, results or the actual experience may differ materially from those reflected or contemplated in these statements. Nothing contained in this article may be relied upon as a guarantee or assurance as to the future success of any particular company. Past performance is not indicative of future results.
Providers have sounded the alarm on healthcare’s workforce shortage in recent years, warning that the issue will have serious consequences for patient care and Americans’ collective health. The shortage has also recently gained the attention of national leaders — just two weeks ago, Surgeon General Dr. Vivek Murthy issued an advisory calling on the country to address health worker burnout, a key reason behind Americans’ decisions to abandon healthcare roles. Now, one of the country’s largest healthcare organizations has committed $100 million to addressing the crisis.
UnitedHealth Group will invest $100 million over 10 years in building the healthcare workforce, Patricia Lewis, the company’s chief sustainability officer, announced Wednesday at the Social Innovation Summit.
The U.S. could see a deficit of 200,000 to 450,000 registered nurses available to provide direct patient care by 2025, according to a McKinsey report released last month. Mercer research shows that the country also faces an estimated shortage of more than 3.2 million lower-wage healthcare workers, such as nursing assistants and home health aides, within the next five years.
UnitedHealth Group’s investment, made through United Health Foundation, seeks not only to address not only this shortage of employees, but also the healthcare workforce’s striking lack of diversity. Only 22% of Black patients and 23% of Hispanic patients have a provider of the same race, according to research from the Urban Institute.
The $100 million investment will sponsor 10,000 clinicians from underrepresented racial groups who are pursuing or advancing careers in healthcare. It is the single largest philanthropic commitment ever made by the United Health Foundation.
The foundation will provide funding to about 5,000 underrepresented students who are pursuing careers in primary care, Lewis said. Over four years, students will be able to get up to $20,000 for their education.
The rest of the funds will go to about 5,000 current healthcare professionals from underrepresented racial groups who want to advance their careers. The foundation will provide funding for physicians, nurses, medical assistants, mental health professionals and midwives who are seeking additional degrees, accreditation or certifications.
“When we think about diversity in the healthcare pipeline, we think about cultural competence,” Lewis said. “And that occurs when physicians are from similar backgrounds as their patients. We see data and evidence that suggests they have a better opportunity to build very strong relationships this way because they can relate to their patients’ experiences, and we see that there are better outcomes when that happens.”
Lewis noted that while $100 million may seem like a rather big number, it will not solve all of healthcare’s workforce problems, neither shortage-wise nor diversity-wise. She said her company made the investment to do its part in continuing to advance the healthcare worker pipeline so that 10 years down the road, the industry has more professionals and they look more like the patients they serve.
Photo: wildpixel. Getty Images