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Venture Capitalists, C-Suites Still Want to Invest in Health IT


Although some consider health IT overvalued, the field is poised for a lucrative 2019.

Investments in health IT may see a rise in 2019, despite healthcare professionals viewing IT asset prices as overvalued, according to KPMG-Leavitt Partners’ 2019 Investment Outlook survey.

A total of 175 respondents from corporations, health systems, investment banks, venture capital and private equity firms completed the online survey between September 2018 and October 2018. Thirty-two percent were C-suite executives.

While 64 percent of investment professionals see the health IT as an overvalued sector, 34 percent said they were most interested in investing in the space.

Care management was just behind health IT, receiving 31 percent of the vote, followed by home health (23 percent), retail-centric medical groups (22 percent) and primary care practices (21 percent).

>> READ: HHS Issues Draft Strategy to Reduce Health IT Burden

Subsectors with trends that drive toward consumerism and an increased focus on early care interventions were viewed as the ones the majority wanted to invest in next year.

Of the 175 respondents, 55 answered questioned specifically tailored for health IT outlooks. Here are some of the results.

Sixty-two percent surveyed believe that health IT will grow faster than the market, compared to 69 percent of respondents who said hospitals will grow slower than the market. Seventy-eight percent said that care management solutions for risk-bearing providers would grow faster than the market.

“As healthcare continues to march toward value, the emphasis on moving care to lower-cost sites and enhanced coordination will continue, and those who can increase quality and lower cost will win,” Mike Leavitt, founder of Leavitt Partners and former Utah Governor and U.S. Health & Human Services Secretary, said in a statement.

Seventy-five percent of respondents would classify the health IT environment as increasing in competition.

The survey also asked respondents what the biggest drivers of mergers and acquisition activity will be in the healthcare and life sciences sector in 2019. Sixty-four percent said cost consolidations and economies of scale, while 45 percent said accretive acquisition strategies and 41 percent said changing payment models.

Leavitt Partners is a healthcare intelligence business that helps clients navigate their role of value in healthcare. KPMG is a professional service firm that provides business solutions and audit, tax and advisory services to organizations.

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