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The View from ViVE: White Wedding or Rebel Yell?

By Dan D'Orazio, CEO, Sage Growth Partners | March 5, 2024

The economy could learn a little something from Billy Idol. The nearly 70-year-old rocker took the stage at The Hollywood Palladium last Tuesday night as part of VIVE 2024. In a healthcare industry plagued by pervasive misalignment, ViVE-goers could agree on one thing: Billy’s still got it.

Does healthcare still got it? Does the market that both punishes and funds it still got it? Yes and yes. But we still need to be rockstars if we’re going to survive this post-pandemic economy with a Rebel Yell, not a whimper. Excellence is required to survive, amazing is required to grow.

Mon(e)y, Mon(e)y

Truth 1: In 2023, the market started to thaw. Evidence of increased funding and deal-making emerged last year. Was it anywhere near the easy-money days of the past decade? No, but now we can not only see the bottom but feel it. The last time the Fed raised interest rates, it was Hot in the City (July 2023) and we’re all ready for cuts in 2024. But not so fast . . .

Truth 2: Just because we can feel the bottom doesn’t mean it’s stable. Four months before the last rate hike, Silicon Valley Bank collapsed. The bank invested heavily in treasury bonds that yielded low-risk returns — until they didn’t, and struggling customers pulled money en masse from their accounts. You know things are bad when Startup Tech’s de facto Fort Knox fails.

Truth 3: Following the money is easy when it just sits there. Today, we sit in an illiquid market. Private equity is perched on a lot of dry powder. Investors are still wary and in search of 10X returns. As long companies keep joining the $3 trillion club, hope — and the gap between value and valuation — springs eternal. Just like Billy.

Dancing With Ourselves

Following the money is also easy when it’s running out. When that happens, companies turn inward, relying on current funding from inside rounds to extend their runway. We expect to see many more “soft landings” for companies. As their funds run dry — and if inside and outside investors don’t extend the runway — many of these assets may be “scooped up.” It will likely be a hard landing for the cap table and investors, but the asset may live on as part of a platform that is growing. The days of capabilities/modules masquerading as true companies has thawed significantly.

But this Cradle of Love can only cradle for so long. To extend funding runways, organizations must also look inward to cut costs. That means layoffs and job-blending for those still left (“Hi, I’m the CFO — and as of today, the COO). Add to this the need to be not just strong but amazing, and we reach Truth 4.

Truth 4: Companies are still hiding deep problems as the market shakes out.

And we haven’t even talked about AI.

AIs Without A Face

My 2024 mood after JPM was hope but not confidence. After ViVE, it’s clear that execs are feeling the same way about a key market driver: AI. As a recent Sage survey revealed, the C-suite is hopeful that AI can solve healthcare’s persistent problems. They just aren’t sure how to get there from here and if AI is building the plane and flying it.

We’re right to worry. A ViVE buddy told me it took 17 years for Internet use to reach critical mass. It took ChatGPT eight months. It’s well known that regulation lags innovation. That starts being a problem when governance and risk management lag risk.

Billy Idol Gets It

Billy Idol’s not just a rocker. He’s acted too. In The Wedding Singer, he famously gave Adam Sandler (Robbie) advice on how to keep Drew Barrymore (Julia) from marrying the wrong guy (Glenn):

Robbie: I don’t know what to do. She’s getting married, and he’s going to ruin her life.
Billy Idol: Glenn doesn’t deserve her. All he cares about are possessions . . . fancy cars, CD players.
Robbie: See, Billy Idol gets it! I don’t know why she doesn’t get it.

There’s something healthcare still needs to get: the fundamentals are fundamental.

We need to voice unvarnished truth about care gaps and the UM, CM and population health management failures driving them. Garbage in, garbage out applies to AI because it applies to data. Advanced technology doesn’t guarantee advanced care.

2025: White Wedding or Rebel Yell?

Billy Idol plus anything equals great. Healthcare’s combinations aren’t so lucky. The industry must focus simultaneously on survival and strength, urgency and advanced performance. We didn’t know just how hard these past few years were going to be. Now we do.

The likely destabilizing presidential election is yet another reason to repeat the industry mantra: Survive Until 2025.

I know Billy will.