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Discover strategies for overcoming growth challenges in mid-market healthcare, from sales cycles and procurement hurdles to compliance and talent scarcity, for a future-proof go-to-market strategy.
Bain & Company recently posed a question that should give mid-market PE investors and CEOs in the healthcare space pause:
“Is your go-to-market strategy built for future opportunities—or is it still calibrated to yesterday’s market?” Bain
For mid-market healthcare companies, the answer determines whether growth compounds or stalls. Buyer behavior has shifted: Cycles are longer, procurement hurdles are higher, cybersecurity & privacy requirements are more stringent, buyers want “plug and play” solutions, and risk averse and the war for the right talent is fierce.
Seven pressing growth challenges unique to mid-market B2B healthcare companies (and strategies to overcome them)
1) Long and Complex Sales Cycles with Providers and Payers
Why it matters: Selling into hospitals, IDNs (integrated delivery networks), or payers involves multiple stakeholders. CFOs, CIOs, clinical leaders, and procurement teams are causing sales cycles to often exceed 12 and even 18 months. Furthermore, pilots rarely convert without strong ROI proof.
Example: A mid-market AI-powered coding platform booked pilots with three large health systems in 2024, but struggled to convert because client CFOs froze discretionary spending after the Change Healthcare outage disrupted cash flow.
Investor/CEO takeaway: Companies must build repeatable, data-backed ROI cases and referenceable accounts. A deal desk function and a robust customer success team accelerate conversions.
2) Procurement Hurdles and Increasing Vendor Consolidation
Why it matters: Health systems and payers are cutting the number of vendors they manage. Large systems prefer integrated suites over best-of-breed point solutions. For a mid-market vendor, getting “through the door” is harder than ever.
Example: A revenue cycle automation startup lost a renewal when the client switched to a bundled RCM + clearinghouse package from Optum.
Investor/CEO takeaway: Mid-market B2B companies need to position themselves as a “must-have” in the workflow, or partner with larger platforms. Strategic alliances (Epic App Orchard, Microsoft Cloud for Healthcare, EHR marketplaces) can shorten access to enterprise buyers.
3) Data Security, Privacy, and Compliance Burden
Why it matters: After the 2024 Change Healthcare cyberattack (the largest healthcare data breach to date), buyers demand stricter assurances from vendors. Even mid-market firms must demonstrate HIPAA, HITRUST, SOC 2, and increasingly TEFCA alignment. Ensuring compliance raises sales costs and slows onboarding.
Example: A care coordination SaaS provider lost two payer deals because it couldn’t provide evidence of cyber contingency plans beyond basic encryption.
Investor/CEO takeaway: Investors should conduct due diligence on security maturity early. To win RFPs, CEOs should elevate compliance readiness as a differentiator by offering “compliance accelerator” packs (prebuilt policies, audit logs, etc.).
4) Shifting Regulatory and Policy Requirements in Enterprise Sales
Why it matters: Clients expect vendors to adapt ahead of regulation. B2B vendors must keep pace with federal and state changes; price transparency mandates, site-neutral payment policies, Medicare Advantage star rating adjustments, and TEFCA interoperability.
Example: An analytics firm built its platform on claims data aggregation, but failed to integrate TEFCA/QHIN exchange standards quickly, losing ground to competitors who could market “plug-and-play interoperability.”
Investor/CEO takeaway: Mid-market firms should embed regulatory fluency in their product roadmap. Early compliance is not just defensive; it creates a wedge in sales conversations.
5) Market Saturation and Differentiation Challenges
Why it matters: Digital health funding may have cooled from pandemic highs, but competitive intensity hasn’t. Buyers face dozens of point solutions for patient engagement, AI documentation, and care navigation. Mid-market vendors often struggle to cut through noise.
Example: A population health management startup found itself competing in an RFP for a regional payer contract against 40+ vendors. Their messaging around “AI-driven insights” blended in with peers, leaving them undifferentiated.
Investor/CEO takeaway: B2B companies must refine go-to-market messaging to highlight specific, quantifiable business outcomes (e.g., “reduced denial rates by 17%” or “shortened coding turnaround by 36 hours.”) Domain-specific differentiation (oncology RCM vs. generic RCM) is more powerful than broad claims.
6) Customer Retention and Proof of Value Under Value-Based Care Pressure
Why it matters: Buyers are increasingly risk-averse. Health systems and payers demand guaranteed ROI tied to value-based outcomes, not just workflow efficiency. Vendors that can’t prove cost savings or revenue lift risk churn at renewal. Outcomes-based healthcare (rehospitalizations, adverse events, etc.) requires different metrics than fee-for-service models.
Example: A digital mental health vendor selling into employers saw renewals fall because it marketed “engagement” rather than demonstrating reductions in absenteeism and medical claims.
Investor/CEO takeaway: CEOs must build value realization functions—dedicated teams that track and report hard-dollar outcomes for every client. Investors should look for platforms with embedded analytics that automatically quantify savings.
7) Talent Bottlenecks in Commercial and Regulatory Roles
Why it matters: Scaling sales and customer success in healthcare requires experienced enterprise reps, contracting experts, and compliance officers. The talent pool is limited, and large incumbents lure away mid-market stars with richer compensation.
Example: A mid-market interoperability vendor landed its first five IDN clients but struggled to hire account managers with payer/EHR experience, resulting in poor onboarding and stalled upsell opportunities.
Investor/CEO takeaway: Build scalable talent engines: use repeatable playbooks, invest in enablement tech, and create equity-based incentives that encourage commercial leaders to stay through the scale-up phase.
8) Fines for unsubstantiated claims
Why it matters: For services, claiming you’re affiliated with another provider when you’re not (Evoke Wellness fined $1.9MM) is risky. The FTC is not just going after supplements or drugs; they’re looking at insurance products, telemedicine, lead-generation for treatment services, etc. This scrutiny in healthcare marketing even extends to areas like business development. How leads are generated and how the business presents itself (search keywords, telemarketing scripts) matters.
Examples: Companies such as NextMed, AssuranceIQ, Media Alpha, and Evoke Wellness (all cases this year) have had to pay millions in fines for claims made regarding their products.
Investor/CEO takeaway: Regularly audit public-facing claims regarding efficacy, comparative statements, and anything that cannot be defended or violates regulations.
For Private Equity investors and CEOs of mid-market B2B healthcare companies, the growth story is not just about “more sales” but about overcoming the structural friction in enterprise healthcare selling: longer sales cycles, vendor consolidation, compliance hurdles, regulatory shifts, crowded markets, proof-of-value demands, and talent scarcity.
For investors, diligence should move beyond TAM analysis and into commercial execution readiness: How fast can this company navigate procurement? How well can it prove ROI? How strong is its compliance posture? Those who have strong answers to these questions are best positioned for outsized returns as healthcare spending continues to grow, but buyers become choosier.
About the Author
John Auer is a Managing Partner with Veritac group. Having worked with over 300 companies, John brings deep expertise in B2B revenue design. A former PE Managing Director and CRO, he quickly identifies Go-To-Market gaps and designs solutions that drive measurable enterprise value. John has helped firms such as Symphony Technology Group, HIG Growth, and Riverside.
About Veritac Group: We are a mid-market, B2B, GTM consulting firm with deep experience in technology and healthcare. We create scalable, effective processes and advise clients on a wide variety of GTM solutions (designing for the future being one element). John Auer is a Partner at Veritac Group with over 25 years of sales, consulting, and Private Equity experience.
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