Healthcare investors split on Trump’s second term

Healthcare investors are grappling with mixed emotions following Donald Trump’s victory in the 2024 election. While many are hopeful that a second Trump presidency could spark new exit opportunities and accelerate mergers and acquisitions, others express concern over potential policy changes that could disrupt the healthcare landscape.

Six prominent investors spoke to *Business Insider*, reflecting a nuanced view on Trump’s return to office. Their apprehensions stem from the dual forces of economic potential—such as a revival in IPOs for healthcare startups—and the uncertainty of proposed policy shifts that could impact access to care, particularly for vulnerable patient groups.

Trump’s second term could see major changes in healthcare policy, especially with his endorsement of Robert F. Kennedy Jr.’s ambitious health agenda. Kennedy, who Trump has indicated will play a significant role in shaping health policy, has already voiced plans to overhaul systems governing everything from food safety to vaccine policy. His controversial ideas, including banning fluoride from public water and promoting skepticism about vaccines, raise alarms about the future direction of healthcare reform. “Kennedy’s ideas might resonate with some parts of the base,” said Stephen Hays, founder of What If Ventures. “But they bring an entirely new layer of risk for those of us backing innovations in health and science.”

Despite this, the investment community is eyeing the potential for growth. The healthcare sector has faced a three-year drought in digital health IPOs, but that could soon change. The promise of lower corporate taxes and deregulation under Trump’s administration has boosted investor optimism, with stocks for tech giants like Tesla and JPMorgan Chase already showing significant gains. This optimism is expected to extend to healthtech startups, some of which, like physical therapy company Hinge Health and diabetes startup Omada Health, have signaled their intentions to go public. “It’s like a breath of fresh air in an otherwise stale market,” noted Michael Greeley, cofounder and managing partner at Flare Capital Partners. “Investors are looking for exits, and Trump’s policies could open that door.”

Yet, as investors consider these potential gains, the threat of regulatory changes looms large. Greeley cautioned that a more “systemic overhaul” of the healthcare infrastructure could lead to unexpected disruptions. “It’s the unknown of those moves that makes it really hard to make a long-term investment decision,” he said, highlighting the dilemma facing investors.

The market for healthcare mergers and acquisitions also appears ripe for activity. The long-anticipated mega-merger between health insurers Cigna and Humana could be back on the table after being paused last year, with antitrust hurdles possibly eased under Trump’s administration. Stephen Hays suggested that relaxed regulations could lead to an explosion of M&A activity, including more private equity investments in healthcare sectors like behavioral health. “We’re talking about an entirely different landscape here,” Hays remarked. “With the right moves from Washington, we could see private equity consolidating fragmented healthcare services in ways we haven’t seen before.”

Still, not all investors are entirely convinced. “I’m cautiously optimistic, but I’m also bracing myself for the impact,” said a Boston-based healthcare investor who wished to remain anonymous. “Trump’s policies could either give us the push we need to scale or create hurdles we’ll struggle to overcome.”

As the healthcare sector braces for change, investors are torn between the promise of new opportunities and the risk of policy shifts that could alter the fabric of healthcare delivery in the U.S. The next few months will be critical, as investors and startups assess the potential impact of Trump’s healthcare policies on their long-term strategies.