Rising interest rates, elevated inflation, and economic uncertainty led to volatility in 2022, and many of these factors remain in place heading into 2023, reports Healthcare Appraisers. While inflation appears to have peaked and is trending lower, the full impact of the rapid rise of interest rates has yet to be felt throughout the broader economy. Heading into 2023, questions linger about the path ahead for interest rates, and whether the United States economy will enter a recession.
Driven primarily by private equity physician practice management (PPM) transactions, physician practices comprised 30 percent of total healthcare deal volume in 2022. Looking to 2023, several factors could affect deal volume, including higher cost of capital for private equity groups, economic uncertainty, and recent Medicare reimbursement cuts that could impact budgets for 2023 and lead to fewer health system acquisitions. However, many market participants expect physician practice deal volume to remain robust for a variety of reasons, such as the desire to consolidate within specific specialties, and the continued focus from health systems to expand their physician networks. Read more.
