Generative AI, health IT to drive healthcare investing in '24, Bain says

Generative artificial intelligence and IT will be among the biggest drivers of healthcare private equity investments in 2024, Bain & Co. reported Jan. 3.

Despite higher interest rates and inflationary pressures, global healthcare private equity deals totaled $60 billion in 2023, Bain estimated.

"We suspect 2024 will be a year of playing catch-up, as buyers and sellers work toward bridging the valuation gap," said Kara Murphy, co-lead of healthcare private equity at Bain, in a Jan. 3 news release. "Innovation and technology will continue to be at the forefront of investment themes across the value chain."

Generative AI will be a focus of healthcare investors because of its potential to improve productivity, boost the patient and provider experience, and lessen administrative costs, the report noted. Big Tech companies have been partnering with health systems to deploy the technology.

Health IT, meanwhile, comes with lower risk but can still contribute to innovation and help buffer inflation, staffing shortages and reimbursement challenges, according to Bain. Health IT deals declined nearly a quarter in 2023 but still made up 10% of overall healthcare deal volume, with revenue cycle management, clinical workflows and patient engagement standing out as top priorities of providers.

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