When it comes to healthcare innovation, relationships can make or break a company, according to Julie Murchinson, who was just named partner at digital health focused private equity firm Transformation Capital.
“One of the biggest challenges digital health companies face is really having the right set of relationships for selling into end customers and being able to work productively with those said customers to deliver outcomes at the end of the day,” she told MobiHealthNews.
Murchinson has a track record of building relationships in the healthcare industry. Before coming to the private equity firm, she served as CEO of Health Evolution, managing director at Manatt Health Solutions and cofounder of Health 2.0 Accelerator. Now she is swapping her CEO hat for PE. She said this change was prompted by Transformation Capital’s ability to impact on a larger scale.
“Coming to a place of transformation that is exclusively focused on digital health ... aligns so well with my background. That was so attractive, and it allows me to really be useful and do lots of help for the platform,” Murchinson said. “[I have] the ability to do something much larger than what I’ve done at my last platform at Health Evolution because there’s capital at play." Other factors contributing to her move, she said, include the ability to help companies she knows well to grow and the fact that digital health has a huge tail wind behind it, albeit because of COVID-19.
Murchinson's making the switch at a time when healthcare is evolving and companies are transforming to deal with the pandemic.
“For our portfolio, it’s definitely COVID-driven in the sense that many of our companies are seeing opportunity that they wouldn’t have thought of seeing for a number of years,” she said.
This change isn’t something Murchinson sees going away anytime soon. Digital is here to stay, she said, and its use case can be seen even beyond the pandemic. Specifically, she said that personalization is going to be a hot topic in the future.
“I think we are going to see further and further personalization both with how we are treating, for instance, mental health and addiction,” she said. “You are starting to see companies come out of the woodwork in both those areas. We have a company called Groups which has seen incredible uptake of its switch to an entirely virtual platform."
Beyond relationships, Murchinson said the other large hurdles for young digital health companies are figuring out a way to make it to the major leagues and the competition for talent.
“One of the biggest issues for digital health is the competition with tech for data scientists and people who really know consumers, and thank God there are a lot of people in tech who are in ... I call it their give back phase of life, who come to healthcare and are really looking for opportunities to deploy what they know,” she said. “That’s been a huge bonus for your typical digital health CEO, but talent is super tough and super expensive, and I don’t see that changing.”
While relationships, scaling and talent are all challenges for new companies, Murchinson said the federal government as well as traditional stakeholders are interested in these advancements. In fact, ahead of tomorrow’s upcoming election, she had some insights on what was next, no matter the president.
“I encounter people every day who are super concerned about the election. So, I’d be remiss not to pile on to say these are totally bipartisan issues. I think the [Joe] Biden campaign is super focused on continuing some of what CMS has relaxed in terms of [regulations], 50 state deregulation for licensure and things like that on a temporary basis, so I think you’ll see Biden go deep,” Murchinson said. “But even under [President] Trump we’ve seen a lot of improvement and focus on value-based care and value-based reimbursement, so all of that I don’t have as much fear about it for healthcare as some people do.”