CALIFORNIA - Private equity deal funding in healthcare has been increasing consistently during the past few years, even throughout the turmoil of the pandemic, but more recently this deal activity has been starting to slow down. According to global professional consultancy KPMG, it has decreased by 50 percent overall in the first quarter of 2022.¹ 

Nevertheless, the healthcare technology sector continues to be a bright spot. KPMG reported that it grew by 4 percent from last quarter, with certain areas such as behavioral health growing even more - up 17 percent compared to the previous quarter. The deal environment is usually a prognosticator of where people are placing their attention in the healthcare sector, and where investors think there are returns to be had. Currently, healthcare technology is expanding into spaces with a lot of unmet needs, such as women’s healthcare, elderly care, behavioral health, Medicaid, and socially driven medical issues.

Where is healthcare technology heading?

It is hard to discuss healthcare technology without mentioning the impact of telemedicine. One of the largest expansions of telemedicine occurred during the pandemic. The Centers for Medicare and Medicaid Services expanded coverage of telemedicine on March 6, 2020. A study published in Health Affairs which tracked the impact of this expanded coverage showed the number of patients with at least one outpatient telemedicine visit increasing by almost 3,000 percent. Those that used telemedicine the most frequently were also the most socially disadvantaged according to the Area Deprivation Index, and had a higher score on the Charleston Comorbidity Index - a measure of disease burden.

Those that used telemedicine the least were the elderly (those 85 and over had the lowest use) and those