Healthcare Provider Market Trends in 2023

How will the healthcare provider services M&A market react to the current economic landscape as well as the tightening credit environment?  

BGL’s Healthcare Real Estate and Healthcare Provider Services teams recently partnered with VMG Health to take a closer look at this question and more during an in-depth discussion on trends across the healthcare market, offering a comprehensive view of today’s landscape.

Taking part in this conversation was a highly experienced and knowledgeable panel from BGL and VMG:

• Clinton Parker, Managing Director, BGL
• Sean Maynard, Managing Director, BGL
• J. Kyle Brown, Managing Director, BGL
• Kevin McDonough, Managing Director, VMG Health
• Victor McConnell, Managing Director, VMG Health

The participants opened the discussion by taking an overall look at the healthcare provider services M&A landscape in 2023. 

“Valuation, and subsequently deal activity, has been off a touch so far in 2023,” said J. Kyle Brown, Managing Director at BGL. “There’s over 70 assets led by private equity backed assets in provider services that were due to come to market in 2023. We see the back half of 2023 and into the first half of 2024 to be big for provider services”

Kevin McDonough, Managing Director at VMG Health added, “You’ve got upwards of $60 billion of “dry powder” that’s out there for private equity to invest in healthcare services, not considering the use of debt. Once you multiply that through the use of leverage, you’re talking about 3-4x that amount that is waiting to invest within healthcare services.”

With a clear opportunity for additional PE investment in the healthcare provider services space in the coming months, the participants broke down the state of the market for a variety of healthcare specialties, including:

• Musculoskeletal Medicine Market Trends – J. Kyle Brown and Kevin McDonough took a closer look at how a high yield per physician impacts valuations and the path to growth as well as other issues affecting this speciality.
• Cardiology Market Trends – Our team reviewed the market for this higher volume specialty that has seen a significant uptick in activity over the last half decade. 
• Urology Market Trends – Is there a supply problem in the urology market? Our panel took a closer look at what that means for valuations and activity. 
• Ophthalmology Market Trends – J. Kyle Brown and Kevin McDonough assess the impact of high deal volume from 2016-18 and how it may affect what comes to market in 2023-24.  
• Dermatology Market Trends – We checked in for a market update on one of the more mature specialties in retail medicine from an investment standpoint.  
• Gastroenterology Market Trends – Kevin McDonough covered another specialty with a longer history of investment and discusses how groups have been able to expand on ancillary opportunities as a part of a significant growth strategy for providers. 

By clicking on the links above, you can jump directly to the segments of the discussion focused on each of these specialties or you can access the full healthcare provider panel discussion video here.