How do Private Equity firms use healthcare data?

The PE industry has been in the news a lot recently. For instance, Private Equity News claims that pay has remained strong despite fewer buyout deals. 

Private equity firms run paid healthcare surveys as a critical step in their due diligence process. They use these surveys to validate the conclusions and assumptions. These are made during the preliminary market analysis stage of the transaction. The information from paid healthcare surveys also provides insight into how competitors and suppliers may respond. For instance, they plan to enter the market, purchase, or supply the company. This information is used to develop strategies in the future. It will also help answer questions like “if we go ahead with this acquisition, what will happen?”. Larger private equity firms typically have a dedicated internal team for due diligence and deal execution. Smaller, less established firms often outsource this work to data panels that specialise in conducting these types of surveys.

1. Private equity firms run paid healthcare surveys as a critical step in their commercial due diligence process

Private equity firms run paid healthcare surveys as a critical step in their commercial due diligence process. Because of the significant time, cost, and risk involved with a transaction, private equity firms need to be confident that they have done everything possible to minimise the potential for surprises. This includes making sure that the conclusions and assumptions made during the preliminary market analysis stage of the transaction are correct.

Some private equity firms use paid healthcare surveys early on in their commercial due diligence process because it gives them insight into specific provider groups. It also allows them to identify price targets by asking providers about how much they think other providers will pay for services. Mckinsey states that pricing is the upcoming value creator in Private Equity. Read more about pricing in private equity here.

For a guide on healthcare market research check out this article on our blog. If you’re looking for an opinion piece on the future of healthcare, head to this article here.

2. They are used to validate the conclusions and assumptions that were made during the preliminary market analysis

Private equity firms use these surveys to validate the conclusions and assumptions that were made in the decision-making process. Participants are often asked to provide information about health facts, opinions, etc. This information is used to validate the assumptions made during the preliminary market analysis stage. For instance, consider a PE firm trying to make a report on healthcare conditions in a geography. The firm can contact a panel that'll gather participants for paid healthcare surveys. In this way, they can gather data from multiple sources. Participants can be vetted through the data panel to ensure quality responses.

3. They also provide insight into how competitors and suppliers may respond if they plan to enter the market

The most common reason for this is to provide insight into how competitors and suppliers may respond if they plan to enter the market, purchase, or supply the company. Healthcare is an ever-changing space and it's important that PE firms stay on top of the news. If a PE company is analysing the healthcare industry, surveys are useful. Paid healthcare surveys are a valuable tool in the process of market research. This is because they provide data all in one place. Not only do they help in data collection, but they are also important for due diligence.

Larger private equity firms typically have a dedicated internal team for due diligence and deal execution. Smaller, less established private equity firms may have a small team or rely on external advisers such as law firms or investment banks that specialise in M&A deals (Mergers & Acquisitions).

4. Paid healthcare surveys to serve as a roadmap for the future

You can think of the survey as a roadmap for what happens when you buy a company. It helps private equity firms develop strategy and will help answer questions like “if we go ahead with this acquisition, what will happen?”.The survey helps you understand how your target company will respond to a takeover. Or how competitors and suppliers will react if you plan to enter the market or purchase or supply them, and whether employees are likely to stay with your company after the acquisition.

5. Paid Healthcare surveys to provide a lot of flexibility for companies

There are a number of reasons private equity firms will outsource this work to data panels. First, it allows them to focus on other important aspects of the business. They can save money and time by not having to hire full-time employees for these roles. It also allows for more flexibility in terms of when the surveys can be completed. Since there isn’t an expectation that they are done at any one specific time each year.

Another benefit is that data panels have established relationships with clients at all levels of healthcare organisations, from large providers like academic medical centers and hospitals down to smaller practices and clinics. This means they have insight into both current trends as well as future ones that may occur across different types of healthcare providers. Information that could prove invaluable when making decisions about where best place your resources or investments

Data collection panels are typically hired by private equity firms to run paid healthcare surveys 

Healthcare-specific survey firms are typically hired by private equity firms to run these paid healthcare surveys. This is because they specialise in knowing exactly how to ask questions of physicians/providers, consumers, and patients. These firms know the industry and the language. They have experience in running these types of surveys, which means that their results are more accurate than if you did it yourself. Head over to our website to find out more!

Conclusion

The purpose of these paid healthcare surveys is to determine if there is demand for a healthcare product service, how much of it there will be, and how much you can charge for it. You can also see market conditions in healthcare and analyse the industry by geography. The results will also help define what needs to be done to create the marketability of any given product. Results can also help PE firms make decisions about whether to invest in a healthcare firm or not. If you’d like to learn more, we’re here to help! Let’s have a chat at sales@grape-data.com.