Healthcare leaders optimistic about business performance, expect it to continue

By | November 5, 2018

Healthcare leaders are feeling pretty good about the state of their business performance. A new survey from Capital One has sought to quantify to what extent this is true, revealing that optimism remains high in the healthcare services sector.

In all, 72 percent of those surveyed expect their businesses to perform better in the next 12 months when compared to the past 12. Twenty-eight percent expect their business to perform about the same. Zero percent thought they would fare worse.

IMPACT

One of the big reasons optimism remains high is that merger and acquisition activity is predicted to be strong, with 90 percent of respondents projecting the same or increased deal activity in the next 12 months.

Broken down to a more granular level, 48 percent said M&A activity will remain steady, 42 percent expect it to be higher and 10 percent think activity will decrease.

One of the few areas in which respondents were split was when it came to projecting which healthcare market segment would see the highest growth. Healthcare information technology got the highest vote at 46 percent, but 31 percent said home health and hospice would see the most growth.

After that, there was a steep drop-off to round off the top five: Assisted living and skilled nursing grabbed 8 percent, pharmaceuticals 6 percent, and medical devices snagged 3 percent.

WHAT ELSE YOU SHOULD KNOW

The survey also asked respondents about their level of readiness for value-based care, finding that its adoption is going very slowly. Six in 10 said they’re “just beginning” the transition to value-based care, while 21 percent said they were “about halfway.” Just 2 percent said they were fully transitioned.

THE TREND

Healthcare mergers and acquisitions are a pretty frequent occurrence this year, even posting a record-breaking first quarter, but while the volume remains high, the value of the deals has declined as the year has progressed, according to an analysis released last week from PriceWaterhouseCoopers.

From the second quarter of 2018 to the third, deal value dipped to $ 15.9 billion, a 35.8 percent decrease. That’s the lowest value since the first quarter of 2017.
 

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com

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