According to the Centers for Medicare & Medicaid Services ("CMS"), U.S. healthcare expenditures currently comprise approximately
16% (the single largest sector) of U.S. GDP. In less than eight years, U.S. healthcare expenditures are estimated to be approximately
$4.1 trillion and their contribution to GDP is expected to increase to approximately 20%. The Volante team firmly believes that various
segments within the healthcare market will continue to offer revenue and earnings growth rates in excess of broader economic growth
While the healthcare industry is considerable and growing rapidly, Volante believes that there are a number of factors that make it an extremely challenging industry for generalist private equity investors:
1. Healthcare is greatly regulated with both federal and state-level authorities exercising significant oversight over access to care, reimbursement policies and rates, permission for facilities construction, pharmaceutical pricing, market protection, ongoing operating criteria, and licensure. Regulatory policies may change dramatically and unpredictably, based on shifts in federal and state policies.
2. Many sectors in healthcare depend upon U.S. government entities (CMS and state Medicaid agencies) and/or commercial payors (e.g. Aetna, Blue Cross/ Blue Shield, CIGNA and United HealthCare) for reimbursement. Both the government and these private payors frequently change policies that alter the economic prospects for companies operating in the health care industry.
These factors tend to penalize investors who dabble in healthcare while creating unique and highly appealing investment opportunities for those who remain focused and committed to the sector throughout various economic cycles. With a track record of successful healthcare operational expertise and a team focused exclusively on the sector, Volante is well positioned to continue to identify and execute superior healthcare investments.
In addition to the broad healthcare service and product sectors, the Firmís knowledge and industry network bring Volante in contact with a varied group of companies that provide complementary products and services to the healthcare industry itself. These include, for example, vendors of healthcare information technology and outsourced services that enable Volante to leverage its expertise in the health care industry