Bass, Berry & Sims attorney Angela Humphreys was featured in a Q&A by PitchBook News & Analysis discussing how private equity investments in the healthcare industry remain undeterred despite fluctuations in the nation’s healthcare reform. Throughout the interview, Angela provided answers to questions about the current opportunities, trends and future of private equity investment in healthcare.
Even with the uncertainty surrounding healthcare in the United States, private equity investors still see profitable opportunities in the industry for different reasons. “With healthcare as a necessity and such a large part of the GDP, there continues to be opportunity despite uncertainty in the economic and political climates,” Angela noted. However, with a GOP healthcare bill potentially comes a reduction in Medicaid. “The uncertainty around Medicaid likely will result in PE firms taking a harder look at sectors that are more heavily dependent on Medicaid — for example, hospitals and skilled nursing — and factoring that into their deal multiples.”
There are certain areas of the healthcare industry that private equity investors find more attractive and where there is more activity, specifically outpatient services. “The hot areas that we are seeing are outpatient services, including physician practice management, specialty pharmacy and any sort of transaction that has as part of its platform technology that drives transparency, quality of outcome and cost efficiency,” Angela pointed out.
In terms of the future of investment in the healthcare industry, Angela believes that most firms will wait out the political fluctuation surrounding healthcare. “I think most people are still taking a wait-and-see approach. And there is still a lot of opportunity in the healthcare industry that is somewhat insulated from what may or may not happen with healthcare reform, particularly with companies that can reduce costs, provide transparency, improve quality and outcomes and enhance patient satisfaction.”
The full article, “Q&A: PE Firms Keep Backing Booming Healthcare Sector,” was published by PitchBook News & Analysis on July 18, 2017, and is available online. The article was republished on the website ValueWalk.com and is also available online.