United States

Q4 2017 Health Care Industry Spotlight

INSIGHT ARTICLE  | 

Spotlight

Cybersecurity a growing focus

The complicated array of challenges inherent in HIPAA compliance regarding cybersecurity can be best tackled by key focuses on three things: people, process and technology, RSM industry professionals stress. Reviewing who has access, which systems are fully updated, and whether or not processes need to be revisited are priorities. HIPAA regulations are primarily centered on information governance; ensuring the security of interoperability between vendors and providers is critical, with an emphasis on recovery plans in particular.

Key findings

  • 2016 and 2017 see increased volume in mergers and acquisitions (M&A) in pure-play healthcare technology systems, although not as much as one may expect just yet.
  • Significant deal value—propped up by outliers—suggests cash-rich acquirers and avid bidding for top assets.
  • Consolidation in key niches still a driving trend, requiring close focus from key players, especially on the part of private equity (PE).
  • Macro factors such as aging populations, evolving regulations and advances in key technologies affecting both consumer interfaces and back-office functions will continue to foment consolidation.

Looking ahead

Consolidation and competition will continue to be primary characteristics across the entire health care market. Complicated dynamics related to pricey valuations will continue to prolong transaction durations in the market overall for buyers of all kinds, from PE investors to strategic acquirers. A few outliers will still emerge, however, as some acquirers look to tout their swifter closing times as an added attraction. PE dry powder will bolster bidding prices amid the health care middle market, while continued high costs and potential negative impacts to patient populations will exert pressure upon smaller health care providers.

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