Execs bullish on IT, home health, M&A for 2019
- Healthcare services sector executives are bullish on performance for next year, with 72% of survey respondents predicting better performance in the next 12 months versus the past 12 months, a new Capital One survey shows.
- The hottest ticket is health information technology, with nearly half (46%) of respondents saying growth there will outpace other market segments. Home health and hospice is next at 31%.
- However, it's still early stages for many organizations making the shift to value-based care. Nearly two-thirds (62%) of respondents said their organization is just beginning that journey, while 21% are about halfway there. Only 2% have fully transitioned.
The findings on home health jibe with prior reports and the impact of an aging population in general. Among the third quarter's top-funded digital health categories were on-demand healthcare services, with 41 deals valued at $1.3 billion, and disease monitoring, with 38 deals worth $781 million, according to Rock Health.
In a recent Ernst & Young survey, nearly two-thirds of doctors and 53% of consumers said digital technologies will enable care teams to help patients' manage chronic conditions in their home.
Other areas with strong growth projections in coming months include assisted living and skilled nursing (8%), insurance providers (8%), pharmaceuticals (6%) and medical devices (3%), according to Capital One.
Respondents also believe healthcare mergers and acquisitions will continue, with 90% forecasting the same or increased deal activity over the next 12 months. Within that 42% predict an uptick.
While M&A is not going away, a recent Kaufman Hall analysis suggests the pace of hospital and health system deals may be slowing a bit. In the third quarter, there were just 18 deals — 38% fewer than the 29 made in Q3 2017. The number of transactions this year now totals 68, down from 87 in the first nine months of 2017, but not paltry at a combined value of $10.7 billion.
Leading deals in the third quarter was private equity firm Apollo's $7.2 billion grab for LifePoint Health, which Apollo plans to merge with RCCH HomeCare Partners.
- Capital One Healthcare Industry Optimism Reaches New Heights