April 2019

Healthcare Quarterly Earnings Call Synopsis – Q4 2018

We are pleased to present our Fourth Quarter 2018 review of the Healthcare Consulting and IT Services sector, which consists mainly of a mix of buyers providing management consulting, technology-enabled services, and technology platforms for the Healthcare Provider sector.

Key trends in this sector include:

1. Favorable Regulatory Outlook: The current U.S. Administration, including CMS and HHS, has signaled a favorable regulatory environment for the use of innovative technologies and continues to push the shift from a fee-for-service to a value-based care payment model, opening up opportunities for Healthcare IT companies to provide their differentiated offerings to companies undergoing their business model and operational transitions.
2. Healthcare IT and Consulting Companies Move to Recurring Revenue Models: Companies in the space are undergoing a shift towards offering more services associated with recurring-revenue streams including SaaS-based subscription models and ongoing managed services engagements. Companies employing this pricing and business model drive operating leverage and show significantly higher profitability.
3. Healthcare Executives Reinventing Patient Experience: As healthcare executives manage the path to accountable care and reinvent the patient experience, the biggest areas of investment by healthcare provider organizations continues to be value-based care delivery initiatives, patient engagement and care management, and enterprise digital. At the same time, healthcare executives are searching for ways to demonstrate a return on investment for IT technology, including the estimated $30b-plus related to EMR in 2018.