Inflation, rising interest rates and uncertainty about changes to government health programs could hamper the care trade, according to an analysis by consulting firm PwC released on Tuesday. healthcare by 2023, despite renewed interest in hospital and physician groups.
According to a PwC report, from May 2022 to May 2023, buyers invested $85.2 billion in 1,661 deals for hospitals, health insurers, care providers, and hospitals. home health and other healthcare companies. Transaction volume down 4% and investment down 15% from May 2021 to May 2022. The six major deals worth more than $5 billion each accounted for more than half of the money spent on purchases. and mergers of the healthcare industry in recent times. the report said.
Here are five trends highlighted in the PwC report:
Get hospital deals
Investments in hospitals increased 8% to $10 billion, with total hospital purchases up 6% to 70. Health system acquisitions fueled most of the activity, such as: Charleston, West Virginia-based Vandalia Health spent $92 million to buy a hospital. hospital from the Franklin, Tennessee-based Community Health System in April. The report says states continuing to check Medicaid eligibility after pausing the public health emergency due to COVID-19 could have a short-term financial impact on families. Hospitals rely heavily on Medicaid reimbursements, providing investment opportunities for struggling property buyers.
Transaction of the growing group of doctors
Spending on physician group acquisitions grew only 1% to $3.9 billion for 620 transactions, 22% higher than in the same period a year ago. Private equity investors in particular have acquired and combined medical operations into multi-specialty providers in recent years, but may move into other areas, such as companies technology companies and companies specializing in alternative payment arrangements.
According to PwC, under current economic conditions, private equity buyers will shift their approach from direct acquisitions to partnership models. Humana’s joint venture to build primary care clinics for Medicare recipients with private equity group Welsh, Carson, Anderson & Stowe is an example of such an arrangement.
Medical services attract investment
Investors poured $38.2 billion into 546 contract research institutions, ambulatory surgery centers, home infusion providers and medical office companies, as spending fell 10 % and volume decreased by 6%.
Rehabilitation, home healthcare deals falter
Buyers spent $1.4 billion on 61 transactions for rehabilitation providers, down 59% in value and 24% in volume. Investment in home health and hospice providers fell 33% to $12.5 billion. CVS Health’s $8 billion purchase of Signify Health is the largest of 102 deals in the sector.
Medicare Advantage changes boost insurance deals
Health insurance transactions fell 6% to 44 and spending was flat at $6.4 billion. PwC predicts insurers will likely capitalize on the three-year shift initiating change to Medicare Advantage risk management by investing in special benefit managers and publicity tools. Technology can reduce medical costs.
