New England News
5:37 pm
Wed July 18, 2012

Investments in MA Health Care Industry Lagging

According to a recent report, capital investments in health care have fallen in Massachusetts, while investments in New York have made modest gains. WAMC’s Berkshire Bureau Chief Lucas Willard reports…

In a report released by venture capital database CB Insights, the numbers show that investments in the Massachusetts health care industry are down to a five quarter low in deals. CEO of CB Insights Anand Sanwal explains that investing firms target a large variety of sectors in the health care industry.

But health care investments the second quarter of 2012 are down considerably. According to CB Insight’s report, compared to the same period last year, deals are down 18% and dollars have fallen 33% from about $1.14 billion to $768 million.

Dr. Alan Cohen, Executive Director of the Health Policy Institute and Professor of Health Policy and Management at Boston University’s School of Management,  says investors may be waiting to put big money into the health care industry, despite the Massachusetts’ stronger economy, lower unemployment rate, and innovation economy in health care. Cohen said that for many, it all comes down to the future of the Affordable Care Act – he said that some areas of the industry could see a raise in investment if the act is upheld.

But as the future of the federal reform law remains uncertain, so do investors. Dr. Cohen continues…

Anand Sanwal of CB Insights says that regulatory uncertainty is paired with an overall lag in the health care sector as the sector changes.

But while Massachusetts is lagging, New York is making modest gains. The Empire State’s deal count is up slightly from the last quarter, but has increased 36% since the same time last year. Funding, however, has dropped 7% from Q2 2011, but is up 49% from last quarter.

Nationally, New York is now at 10% of venture capital deals, while Massachusetts is at 9%. California leads nationally at 45%.

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