A record 1,536 deals were reported in the healthcare sector last year, according to data shared this week by HealthCareMandA.com, published by Norwalk-based Irving Levin Associates.
The number of healthcare deals exceeded the the previous record set in 2015 by 1 percent, despite a dip in the fourth quarter, the website said.
However, the amount spent on the deals, $255.7 billion was 36 percent less than the $400.3 billion spent in 2015.
“Health care mergers and acquisitions were still riding the tide of low interest rates and higher-than-ever numbers of consumers covered by health insurance under the Affordable Care Act,” Lisa E. Phillips, editor of HealthCareMandA.com, said in a statement, adding that the election of Donald Trump doesn’t seem to have hurt the market. “We’ll see if 2017 can deliver the same level of growth.”
There were 940 deals in healthcare services and 596 in healthcare technology, comprising the 1,536 total deals.
In healthcare services, deal gains were reported in behavioral care, up 2 percent; home health and hospice, up 8 percent; physician medical groups, up 19 percent; rehabilitation, up 21 percent; and other, up 15 percent. Declines were seen in hospital deals, down 12 percent; labs, MRI and dialysis, down 21 percent; long-term care, down 6 percent; and managed care, down 53 percent.
Investor interest continues in post-acute healthcare sectors such as long-term care and rehabilitation, the report said, adding that behavioral care also received more attention last years. Deals for primary and speciality physician groups rose due, in part, to the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, the report said.
The report said signs point to rising M&A activity in the home health and hospice sector.
“With the election behind us, we expect home health and hospice M&A activity will increase, despite the headwinds of repeal and replace the ACA,” Phillips said in statement. “The push for care at home is just a train that will not stop.”
In healthcare technology, biotechnology deals were up 8 percent; eHealth deals rose 23 percent; medical devices dropped 1 percent; and pharmaceuticals dropped 9 percent.
The eHealth gains reflect more companies realizing the need for strong data analytics and revenue cycle management and pharmaceutical spending shifted to biotechnology as drug companies shopped for promising new drugs, the report said.
