Healthcare Trends & Transactions: Year In Review | Bass, Berry & Sims PLC

Healthcare Trends & Transactions: 2023 Year in Review

Results were mixed when it comes to the healthcare transactions market in 2023, with deal volume in some sectors trending upward, while deal volume in others slowing or even declining year-over-year. In the ninth annual edition of Healthcare Trends & Transactions: Year in Review, we highlight several notable transactions—and trends—in each of the following healthcare sectors:

  • Physician Practice Management
  • Clinical Research Organizations
  • Ambulatory Surgery Centers
  • Hospitals
  • Home Health & Hospice Care
  • Digital Health & Health Information Technology
  • Behavioral Health
  • Managed Care
  • Pharma Services, Pharmacy & Pharmacy Benefit Managers
  • Pharma

Some interesting and noteworthy findings from the report include the following:

  • Retailers scooped up large-scale primary care providers, while private equity (PE)-backed platforms continued to focus on smaller “tuck-in” transactions.
  • PE firms increasingly expanded their interest and investment in the clinical research space, and there is an expectation of continued growth in this area over the next couple of years.
  • M&A activity in the hospital sector ranged from acquisitions of financially distressed hospitals to mega mergers between larger health systems.
  • Perhaps to no one’s surprise, investment in the digital health space was largely concentrated on healthcare-focused artificial intelligence companies.
  • Exit volumes of PE-backed home health and hospice providers dropped as interest rates rose, but exit volumes may stabilize in 2024 as interest rates stabilize and given the modest increase to the 2024 Home Health Prospective Payment System Rate.
  • Behavioral health providers were leaders in the use of telehealth technologies—with behavioral health claiming an estimated 37% of all telehealth visits over the course of the year.
  • In the insurance and managed care space, organizations continued to seek out opportunities for vertical growth, including by acquiring urgent care providers.
  • The pharma services, pharmacy and pharmacy benefit managers sectors experienced headwinds in 2023 as sellers delayed going to market due to market conditions, the desire to obtain visibility to major generic and biosimilar conversions, and ongoing impacts of government antitrust scrutiny. As a result, fewer transactions occurred in the area than in previous years.