'Data is the new healthcare currency': 4 things to know on healthcare investor predictions in 2020

Health IT and revenue cycle management are two areas that will generate the most interest from investors, according the 2020 KPMG Health Care & Life Sciences Investment Survey, which was released Jan. 13.

"Strong investor interest in healthcare IT mirrors the realization that data is the new healthcare currency and that data is not useable without the proper IT in place," said Kristin Pothier, global and national strategy leader for KPMG's Healthcare and Life Sciences practice. "Our deal and strategy work fueled by our HCLS IT Center of Excellence allows our clients to diligence these businesses right and make raw terabytes of data come to life for immediate return."

KPMG surveyed 333 healthcare and life sciences investment professionals online in September and October 2019. Those who responded represented finance, strategy and C-level executives from corporations, health systems, private equity firms and investment banks.

Here are four things to know:

1. After health IT and RCM investments, which saw interest from 30 percent of respondents, drug makers are expected to see investor interest in 2020, with 24 percent of respondents indicating so. Hospitals and health systems only gathered 8 percent of interest.

2. A little more than half (58 percent) reported that cost consolidation and economies of scale were the drivers of merger and acquisition activity. This was followed by accretive acquisition strategies (34 percent).

3. Around a quarter, 23 percent, thought that the life sciences sector will be in a "bubble" for 2020. This is a drop from 2019 when 48 percent of investors said the sector was in a bubble. Thirty-nine percent of respondents said they though the entire healthcare sector could be considered a bubble.

4. When it comes to what could have negative impacts on investment activity in healthcare, 48 percent pointed toward the 2020 election. Forty-seven percent said the election could negatively affect life sciences investment.

To access the complete report, click here.

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