During this session, leading private equity investors explored key drivers and trends across diverse industry subsectors. They examined how shifting regulations and the upcoming 2022 midterm elections may alter the deal landscape and mapped out strategies for adapting and thriving amid change. Panelists also offered their exclusive insights into emerging opportunities in health information technology (IT) and forecasted the next evolution of today’s hypercompetitive market.

Below are the top takeaways for McDermott and EY at the 2022 J.P. Morgan Healthcare Conference: Healthcare Private Equity Leaders Forum

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From a macroeconomic perspective, the US healthcare market has seen growth through the COVID-19 crisis because of unprecedented government intervention, a significant rebound in consumer spending (although with pockets of softness) and an outlook for historically high nominal growth as COVID-19’s impact recedes but price inflation takes center stage. Although healthcare spending and employment levels have largely returned to pre-pandemic levels, the spread of the Omicron variant poses a threat to this stability, and the labor supply faces serious challenges. Workforce shortages have yielded significantly higher rates of labor cost growth—particularly in post-acute care—helping to drive healthcare inflation. While rising inflation will not necessarily inhibit healthcare deal activity, if corporate interest rates increase, healthcare investments could be affected.

In this current economic environment, investors are paying attention to entities and innovations with the potential to relieve constraints on the healthcare system. Prominent [...]

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