HCIT & Healthcare Business Services Year-in-Review
Read more about M&A activity and trends in this sector
HCIT & Healthcare Business Services Year-in-Review
Download PDFDemand remains high for healthcare information technology (HCIT), technology-enabled services, and healthcare business services as both the demand for healthcare services and cost of care continue to increase. This is exacerbated by shrinking margins among most healthcare providers compounded by staffing shortages.
The overall M&A outlook in HCIT & Healthcare Business Services remains positive. Valuations remain strong for high-quality assets, PE firms need to put money to work, interest rates appear to be stabilizing, and unemployment remains low, meaning that more Americans will have healthcare coverage and the ability to pay out-of-pocket costs. The new administration in Washington could possibly look more favorably on dealmaking. Nothing dramatic appears to be changing in what acquirers want from HCIT; mainly better efficiencies and help managing the move to value-based care.
Tailwinds:
- Continued advances in HCIT
- PE firms continue to sit on capital
- Aging population, living longer with more chronic disease
- Growing shortages of front- and back-office healthcare staff
- Rising healthcare costs and larger funding gaps
Headwinds:
- Regulation and oversight could slow technology advances with state-level regulation making some tools less universal
- Scarcity of workers who can develop and implement HCIT advances may impact taking new HCIT to market
- Rising concerns about digital security could slow the flow of new HCIT solutions
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Healthcare Information Technology and Healthcare Business Services Market Update
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