Investors project that behavioral health will have the most investment of any medical specialty over the next 12 to 24 months.
That’s according to new data from KPMG’s 2023 Healthcare and Life Sciences Investment Outlook. Specifically, 20% of survey respondents said that behavioral health was the medical specialty most likely for investment, with another 19% noting that behavioral health was the second most likely investment.
Cardiology and orthopedics were the second and third highest projections for investments, respectively.
Investors foresee value-based care becoming a major driver in health care. The value-based care trend could impact the behavioral health sector.
“The long-term trend toward value-based care will continue to drive business model changes in some specialties,” the authors of the report wrote. “Across government and managed care payers — commercial and Medicare Advantage — primary care is leading the way, with nephrology and women’s health close behind. We also see growing interest in behavioral health, cardiology, and oncology.”
Across-the-board, investors project that medical physician groups will continue to face headwinds related to staff recruitment and retention, along with Medicare reimbursement rates. On the flip side, more practices are pushing staff to perform at the top of their license and training non-clinical workers to provide more support to clinical staff.
“Physician practices will continue to appeal to investors as care shifts to outpatient settings,” the authors wrote. “Scale will become more important in managing paperwork and negotiating with payers, and the long-term trend towards value-based care will drive more changes in business models. As in other subsectors, recruiting and retaining staff present challenges. Medicare’s sharp cuts in physician fee schedules could make some potential targets less appealing. We expect some consolidation, beginning with the lower middle market and specialties that are still relatively fragmented.”
Despite digital health’s somewhat tremulous 2022, survey responders still said they saw a growth opportunity in behavioral health tech.
“Virtual care remains vitally important to many patients and providers, many of whom now use blended virtual and in-person care models, and government and commercial payers
continue to reimburse for virtual visits,” authors of the report wrote. “We expect virtual care to continue expanding in behavioral health and other specialties that require less in-person intervention, and in rural and other remote settings where virtual care provides access not otherwise available.”
Last year, behavioral health tech investments were down by 56% year over year, according to Rock Health.
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