The healthcare services sector saw relatively robust PE deal activity in 2022, but it wasn't immune to the broader economic uncertainty and increased capital costs.
Quarterly deal activity in 2022, while in line with pre-pandemic trends, has declined for four consecutive quarters, , according to PitchBook's Q4 2022 Healthcare Services Report. The number of deals completed in Q4 2022 was less than a third of 2021's average quarterly deal count.
With job openings increasing quickly, and hiring numbers remaining stable, labor costs are going up in the healthcare services industry, providing another reason for a decline in dealmaking.
Still, there is potential in 2023 for growth in the latter half of the year, according to PitchBook analyst Rebecca Springer. One of the segments that could lead this charge—and one partly responsible for the slowdown in 2022—is skilled care and behavioral health.
That segment has strong market demand as well as the potential to reduce care costs, making it an attractive area for dealmaking, according to Springer. However, staffing shortages have proven difficult to surmount and kept companies in the segment from growing in 2022 as much as they could have.
The market map below outlines the healthcare services PE ecosystem in the United States and Canada. Explore the skilled care and behavioral health segment by clicking on the colored tile.
To go deeper, read our Healthcare Services report. PitchBook subscribers can also explore the full market map with details on nearly 4,000 companies. Spotlight: Skilled care and behavioral health
-
ABA and pediatric therapy: These companies deal with therapy used to treat various developmental disorders, typically in treating autism in children.
-
Home health and hospice: This subsegment focuses on hospice care and home health for the elderly, those on Medicaid and children.
-
IDD Care: Companies that provide medical and other support services for people with developmental disabilities. Such services include, but are not limited to, home care, group homes and day care.
-
Infusion: Providers that administer intravenous or subcutaneous drugs or work with specialty pharmacies that provide such services.
-
Mental health and SUD treatment: This subsegment includes traditional talk therapy and inpatient psychiatric hospitals as well as everything in between.
-
Skilled nursing: Nursing homes and other facilities that offer both short-term and long-term care for adults as well as those recovering or rehabilitating from an injury or illness.