The 2025 McDermott HPE miami Meeting

 Whether you are firing up your laptop at 11 PM for “second shift”, number crunching as an Analyst, or you are trying to figure out how to squeeze five more percentage points out of operating costs to improve your operating margin on a healthcare business that is plodding vs. racing toward an exit, we are all somewhat intrigued and intimidated by the Artificial in Artificial Intelligence.

Thursday’s morning sessions started with a level-setting discussion on the topic.  Will there be colossal advancement in eliminating clinical overspend across the board due to AI impact? Probably not in the near term.  Their consensus was that AI can have a profound ability as a pattern researcher.  It can predict new efficiencies based on historic patterns that have high probabilities of repeating.  For instance, you can evaluate call center data with an AI tool and predict when a patient responds in a particular way on a phone conversation what their likelihood is of being a no-show for an appointment. Then, you can maximize the scheduling for each site across your network.  We are probably 12 months or so away from that.

In the meantime, the question before the house is how to relieve the tension on MD time, prompting the best use of their expertise.  We need to get rid of the back-and-forth amount of human processing and waste-of-time documentation; that’s going to be powerful.

Assort Healthcare is a great example of what can be done with AI from a scheduling standpoint. Our team met with Founder and co-CEO Jeffrey Liu to gain additional insight. “Our tech is designed to use AI agents to answer phone calls and improve provider access.  We are making quick traction for practice management environments of every kind to take some pretty big leaps in scheduling effectiveness and patient satisfaction”.  We asked Jeffrey about the realities of raising capital to fund AI, and he said they had an outstanding A-round, and the heat was rising quickly on their demand curve.  Later in the day, Assort was heralded from the stage as exactly what will grow quickly in the near term because the solution is for a basic functional challenge within many models.

So, what do people like Mike Munter, Partner at Centerview Partners or Mark Francis, Global Head of Healthcare Investing at Houlihan Lokey say about 2025 from an investor perspective?

Mike led off with, “Look, challenges are beginning to abate. PE rolling up businesses over the past 24 months has made it easier to see where new opportunities lie.  Specialties like retina, gastro, and urology, they are transforming their own businesses.  When you see what has happened over the past several months, the strategic interest (McKesson, etc.) will stir PE markets to make plays based on that momentum alone”.

Stacy Gufanti, Managing Director at Cain Brothers, added, “We feel good about pharma service, SMOs are going to be strong, tech-enabled services (primary care and specialty pharma), higher acuity ISNIPS, etc.  Also, anyone selling services to health systems and specialty pharma, including vaccine management services.”

The final and unanimous commentary made from many of the sessions was that there has to be ingenuity stirred into the investment approach in general.  The entire PPM strategy has mirrored the method of the 1990s. It cannot produce endless amplification of value.  Entrepreneurs need to step into the actual investment model architecture itself if gains are sustainable.

More on that in our next journal installment. It was truly a great meeting, and it expanded the constantly moving intuition of our firm as we work to simplify leadership choice and adaptive development for our Parnassus community of leaders.

-John Lankford, President & Founder, The Parnassus Group