Why PE should remain bullish on healthcare deals

In this episode, Jeff Woods, EY-Parthenon US Co-Head of Healthcare, explains why PE should remain optimistic about investing in the healthcare sector despite the short-term detriment of COVID-19.

Related topics Private equity Strategy Health

The assumption that the healthcare sector is “recession proof” has been debunked as the pandemic usurped traditional assumptions among both patients and investors. Now, there is heightened awareness of how patients access (or don’t access) the healthcare system after utilization plunged nearly 20%. According to EY-Parthenon research, 10% of Americans have decided not to access the healthcare system for the rest of 2020 or until a viable vaccine is available.

Despite the short-term impact of the pandemic, PE investors have been encouraged by recent return to volumes and are more optimistic now than they were in the spring.

The US payer mix is unique in a global landscape of government-sponsored healthcare systems. While there has not been a strong shift in favor of universal healthcare in the US, there has been a secular shift in healthcare expenditure from commercial to government that has accelerated due to rising unemployment caused by the pandemic. While the US healthcare market is ripe for efficiency gains, private equity (PE) can drive innovation in any healthcare market, regardless of the payer mix.

Shifting patient behaviors and preferences are accelerating experience-led transformation and inspiring an increasingly patient-centric approach, creating opportunities for PE to drive innovation and improve patient experiences.

The healthcare/technology deal environment continues to be very active. The pandemic has impacted the deal lifecycle in several ways, including valuations and timeline to exit. In addition, PE has looked to deploy digital across the portfolio to address access, engagement, navigation, care transitions, cost management and staffing.

Summary of the PE/healthcare landscape over the next three to five years:

  • Deal landscape remains very strong and is expected to recover to pre-COVID levels
  • 2020 deal volume will be down 15-20% from 2019 but the worst is over
  • Providers will be the largest deal category and healthcare/technology deals will be the second largest 
  • Private capital remains the fastest way to innovate
  • The healthcare sector will no longer be thought of as “recession proof”

For your convenience, full text transcript of this podcast is also available. Read the transcript

Presenters

Jeffrey Woods
EY-Parthenon US Co-Head of Health Care
Winna Brown
EY Americas Financial Accounting Advisory Services Private Equity Leader

Podcast

Episode 15

Duration 25m 00s

In this series

series overview
(Event List - Manual)

Why PE should remain bullish on healthcare deals

In this episode, our speakers explain why PE should remain optimistic about investing in the healthcare sector despite the short-term detriment of COVID-19.
Podcast

Episode 15

Duration
25m 00s

Presenters

Jeffrey M. Woods

EY-Parthenon US Co-Head of Health Care

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

Why PE must embed geostrategy to win in the market

In this episode, our speakers explore why PE must embed geostrategy in order to recognize unique opportunities and drive investment decisions.
Podcast

Episode 14

Duration
25m 17s

Presenters

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

How customer experience is driving digital transformation in PE

In this episode, our speakers explore how experience-led transformation is inspiring digitalization across the PE portfolio.
Podcast

Episode 13

Duration
25m 17s

Presenters

Sean Epstein

Senior Vice President and Global Head of SAP Private Equity & Mergers and Acquisition Programs

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

Why PE’s role in our economy and society is more important than ever

In this episode, our speakers explore the evolution of private equity and the role it will play in a post-COVID world.
Podcast

Episode 12

Duration
23m 00s

Presenters

Andres Saenz

EY Global Vice Chair – Industry Markets

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

How COVID-19 is transforming the PE operating model

In this episode, our speakers describe how COVID-19 is transforming operating models across the PE portfolio and beyond.
Podcast

Episode 11

Duration
29m 00s

Presenters

Tim Dutterer

EY-Parthenon Head of Private Equity

Gregory W. Schooley

EY-Parthenon US Value Creation Leader; Principal, Ernst & Young LLP

Why a post-pandemic supply chain will prioritize resilience over efficiency

In this episode, our speakers explain why a post-pandemic supply chain will prioritize resilience over efficiency.
Podcast

Episode 10

Duration
27m 00s

Presenters

Jeff Schlosser

EY US Supply Chain Transactions Leader

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

Why “cash culture” is a critical lever in today’s PE climate

In this episode, our speakers explore why freeing cash from working capital can allow PE to prolong sustainability, realize value sooner and invest earlier.
Podcast

Episode 09

Duration
27m 00s

Presenters

Sven R. Braun

EY-Parthenon Principal, Ernst & Young LLP

Nick Boaro

EY-Parthenon Partner, Ernst & Young LLP

How PE can manage COVID-19 tax implications in the US and Europe

In this episode, our speakers help PE funds and portfolio companies understand and manage the tax implications of recent coronavirus stimulus packages.
Podcast

Episode 08

Duration
25m 07s

Presenters

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader