• Politics
  • Diversity, equity and inclusion
  • Financial Decision Making
  • Telehealth
  • Patient Experience
  • Leadership
  • Point of Care Tools
  • Product Solutions
  • Management
  • Technology
  • Healthcare Transformation
  • Data + Technology
  • Safer Hospitals
  • Business
  • Providers in Practice
  • Mergers and Acquisitions
  • AI & Data Analytics
  • Cybersecurity
  • Interoperability & EHRs
  • Medical Devices
  • Pop Health Tech
  • Precision Medicine
  • Virtual Care
  • Health equity

What investors expect out of healthcare in the rest of 2022


Analysts talked with Chief Healthcare Executive about the areas of high interest to investors.

So far, the healthcare industry hasn’t seen many mergers or acquisitions in 2022, but analysts expect that to change as the year progresses.

Due to the Omicron variant, hospitals and health systems dealt with record numbers of COVID-19 cases and hospitalizations in January. Hospitals are still dealing with the financial challenges from the wave of COVID-19 patients. There were only 12 announced hospital mergers in the first quarter of 2022, the fewest in any first quarter since 2016, according to a report from Kaufman Hall.

However, analysts say investors are interested in several facets of the healthcare industry in the coming months, and some expect more deals to take place. Here are some trends analysts are watching.

Outpatient and home care

Investors are interested in outpatient and home-based services, said Mike Cole, a managing director with Alvarez & Marsal’s Transaction Advisory Group. He also said he expects more health systems to acquire outpatient providers as they look to expand more services.

“Care has been moving away from the four walls of the hospital for years now. Hospitals have their place for acute procedures,” Cole said.

“The outpatient model and care being delivered in a home-based setting is where we’re headed for sure.”


Investors are expected to continue to show strong interest in telehealth, said Gil Enos, U.S. healthcare service line leader at Mazars, the tax and advisory firm. He said there would be potential for behavioral health services in particular to be expanded with increasing access to telehealth.

Telehealth services soared during the COVID-19 pandemic. While usage has dipped from the peak in 2020, people are utilizing telehealth far more than they did during the pandemic.

Cole also anticipated strong interest in telehealth as it plays a larger role in healthcare. “Telehealth is going to be important,” Cole said.

“Patients have tasted the ability of being treated without going into an office,” he said.

Choice and value

Cole sees two big trends coming together. Consumers are demanding more options and convenience in healthcare, and the industry is shifting to a value-based care model rather than simply paying fees for services. The federal government is pushing the industry in that direction.

“Consumers are starting to have a voice in their healthcare,” Cole said. He later added, “We’ve got to migrate to pay for value to keep people out of physician’s offices.”

“Those two trends converging will dictate what happens in healthcare in the next five years.”

Remote patient monitoring

Enos sees strong interest in the area of remote patient monitoring. Some health systems are utilizing remote patient monitoring to keep tabs on patients and spot trouble before an emergency arises.

In addition, more devices are appearing on the market, including those that can capture your heart rate for around $100, Enos said. “The technology is a lot more affordable,” he said.

Healthcare technology

With the growth in telehealth and patients wanting more convenience, healthcare technology remains a hot area, Cole said.

“Healthcare IT is going to be a big part of the solution of these converging trends of innovation and pay for value,” Cole said.

Patients want more convenience in setting appointments and making payments, he said. “They can still do very little on their phone in healthcare,” Cole said.

He also pointed to the need for more digital functions in other aspects of healthcare, since some providers still rely on faxes for functions such as obtaining prior authorization from payers for services.

“It’s still crazy to me that there are many, many providers you have to fax information to,” Cole said. “That’s got to change.”

Post-acute care

While there haven’t been many deals in the hospital sector yet this year, Enos said he expects to see more activity as hospitals may look to expand offerings in post-acute care.

“I still think there will be a lot of activity as hospitals try to broaden their footprint in the care continuum, particularly in the post-acute area,” Enos said.

Home health agencies and hospices are poised to grow in the coming years, according to a recent report in Trella Health. More patients are choosing to recover at home than in a long-term care facility after hospital stays. Hospices can be a less expensive alternative for those patients at the end of life.

There are “tremendous opportunities” for mergers and acquisitions in hospices, particularly as Americans are getting older, Cole said.

Hospital mergers

It’s certainly been a slow start for the year, but KPMG expects more hospital mergers to take place later in the year.

Larger health systems remain strong financially, even though the pandemic has hurt them to a degree. More importantly, some smaller hospitals and health systems are likely to find themselves needing to find a partner to keep afloat, said Ash Shehata, KPMG’s national sector leader for healthcare and life sciences.

“Those that struggle will likely be targets for acquisition,” he said.

However, he said hospitals need to find the right partner, such as a hospital system with a network of practices joining forces with an academic health system.

With hospitals paying more for labor and supplies, KPMG said in a recent report, “We expect a rise in hospital consolidation, restructuring, closures, and bankruptcies after a slow start in 2022.”

Related Videos
Image: Ron Southwick, Chief Healthcare Executive
Image credit: HIMSS
Related Content
© 2024 MJH Life Sciences

All rights reserved.