A New Guide to PE Strategies and Transaction Trends in Healthcare Services

Health care services (in-person health care delivery in hospitals, clinics, residential facilities and homes) account for approximately 10% of US private equity deal activity by value.

Payments to U.S. health care providers exceeded $3 trillion in 2021 and are expected to reach $4.9 trillion in 2030 as the U.S. population ages, according to CMS. And private market players view health care as a hedge against the recession: In a recent survey, 30% of LPs indicated they intended to increase health care benefits.

Our new quarterly Health Services Report is your guide to navigating private equity investment trends in this critical industry.

In the report, sponsored by UnitedHealthcare, we uncover transaction trends across 26 vendor categories – from Applied Behavioral Analytics to Oncology to Home Health – and provide an in-depth analysis of key market themes, reimbursement and technology that shape PE strategies.

Private equity deal activity in healthcare services remained resilient, particularly in the middle market. The estimated number of agreements between the first and third quarters of 2022 already exceeds the number for the year 2020.

The industry is facing headwinds. Staffing shortages have become endemic among healthcare providers, with hospitals and skilled care businesses being the hardest hit. And deals above the roughly $1 billion threshold are currently hampered by the spraying of syndicated loan markets.

We also saw a slowdown in deal activity in some categories that earned high valuations in 2021, including ABA-focused primary care and Medicare Advantage.

Nevertheless, activity in most categories remains at historically healthy levels. For example, infusion deals are up and right, driven by the expanding specialty drug pipeline and the cost savings and staff efficiencies of the outpatient infusion center model.

And while roll-ups in established categories like dentistry, dermatology and vision continue, private equity firms are also employing more sophisticated strategies – entering niche vendor categories, pursuing contracts based on value and developing models of care for patient populations with higher Medicaid expenditures.

To learn more, download the free 50-page report here: Third Quarter 2022 Health Services Report

PitchBook customers can also interact with more than 3,600 selected company profiles through the PitchBook platform and use direct access to our analysts to deepen their knowledge.

Finally, don’t miss the launch of our Health IT and Digital Health reports in March 2023.

Please feel free to email me with questions or to learn more about PitchBook health coverage.


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