We close our special healthcare series with a discussion of risk.

“Increased risk is one of the primary concerns we consider,” said Rod Rivera, managing director in Capstone Headwaters’ healthcare practice. “The world of healthcare, as you’ve been detailing, is changing. All the subsectors that have great CEOs and built the best platforms are asking, how does the world of capitation change the equation? And in turn, are lenders looking in the rear-view mirror rather than the front windshield? Are smart equity people anticipating the change or are they bidding properties up because they can leverage it?”

His colleague, David Baker, agreed. “Those are the right questions. Where are things going? What are the risk elements? And how does private equity address it? Value-based care is definitely the theme of the day. Self-insured companies have been pushing value-based for years. Self-insured payors like Leapfrog Group, Health Transformation Alliance and the JP Morgan/Amazon/Berkshire venture can combine resources, using scale as leverage to lower costs and innovate in care delivery.”

How are costs and service linked? “Risk is reduced in a fee for service environment,” Mr. Rivera told us.