As we step into 2025, the healthcare transaction landscape is poised for significant shifts. Nixon Peabody and BDO recently co-hosted a webinar to discuss the headwinds and tailwinds shaping healthcare transactions. Nixon Peabody partners Isaac Figueras and Jéna Grady, along with BDO’s Jonathan Mahan and Nick Muhich, provided valuable insights into the evolving market dynamics.
We’ve summarized the conversation below, and BDO has made a webinar replay available.
The impact of the new administration and anticipated changes in regulatory scrutiny
The webinar underscored the increasing scrutiny of private equity investments in healthcare. Prior to the change in administration, congressional leaders and federal agencies released reports in January 2025 analyzing private equity’s role in healthcare. Nonetheless, with President Trump now in office, the healthcare sector is bracing for the unknown regarding regulatory oversight at the federal level, with states potentially taking the lead in establishing laws to examine and potentially control private equity investment in the healthcare space (and, as a result, stakeholders having to be fully prepared to analyze many disparate state laws).
Jéna Grady highlighted the immediate impact of multiple executive orders, emphasizing the need for healthcare organizations and investors to stay agile and informed. The new administration's stance on AI regulation and data privacy will also be crucial in shaping the industry's future.
Isaac Figueras noted that this heightened healthcare regulation environment is prompting investors to explore less regulated areas like innovative medical devices.
Emerging growth opportunities
Technological innovation remains a key driver of growth in healthcare. The panel discussed the transformative potential of AI, telehealth, and remote monitoring. Jéna Grady pointed out that AI can address back-office inefficiencies, thus mitigating clinician burnout and enhancing patient care while raising concerns about data security and privacy. The use of AI in healthcare is expected to grow, but organizations must navigate the federal and state regulatory landscape carefully and closely due diligence vendors.
Financial considerations and market dynamics
Jonathan Mahan provided an overview of the financial headwinds facing the healthcare industry. High interest rates and inflation have tempered transaction volumes, but there is cautious optimism for 2025. The Fed's recent rate cuts and the rise of private credit are expected to stimulate deal activity. Mahan also highlighted the stabilization of margins in the nonprofit hospital sector, signaling a more favorable transaction environment.
Distressed assets and strategic transactions
The discussion also touched on the opportunities presented by distressed assets. With a significant number of healthcare-related bankruptcies in recent years, there is potential for strategic acquisitions. Jonathan Mahan emphasized the importance of due diligence and understanding why the assets are distressed before acquiring them.
Joint ventures and value-based care
Joint ventures are becoming increasingly popular as healthcare organizations seek to drive revenue and improve patient outcomes. Isaac Figueras highlighted the importance of clear governance structures and legal considerations in setting up successful joint ventures. Value-based care models are also gaining traction, offering opportunities for collaboration and innovation.
Conclusion
As we navigate the complexities of healthcare transactions in 2025, staying informed and adaptable is key. The insights shared by Nixon Peabody and BDO provide a roadmap for healthcare organizations to thrive in this dynamic environment. By leveraging technological advancements, understanding regulatory changes, and exploring strategic opportunities, key stakeholders in the healthcare sector can continue to evolve and grow.