The elections could negatively disrupt investment in healthcare and life sciences more than the shift to a value-based payment focus this year, according to respondents to the 2020 KPMG Healthcare and Life Sciences Investment Outlook survey.
“When asked how the 2020 elections would impact investment, nearly half of our survey respondents expressed the opinion that it could cause a decrease (37%) or significant decrease (12%) in investment activity in 2020,” the authors of the 48-page report said. “This result represents nearly three times as many respondents in aggregate as the next highest negative disrupter,” a shift to a value-based payment focus in healthcare.
Results of the survey are based on responses from 333 healthcare and life sciences investment professionals who participated in an online survey conducted by the multinational professional services network in September and October.
Forty-nine percent of survey respondents said the elections would decrease investment activity in healthcare and life sciences, whereas 35% said they would have no effect, and 17% said they would increase investment activity.
By comparison, 17% of poll participants said the shift to value would decrease investment in healthcare and life sciences, 26% said it would result in no change, and 56% said the shift would increase investment activity.
“Barring any unforeseen catastrophe, and as long as the economy remains robust, we believe that investment activity is likely to continue to be relatively strong, perhaps to the summer and up until the elections,” the report authors said. “As reflected in our survey, we believe it’s possible that investment activity could moderate after the election, depending upon who is elected and what changes in healthcare and life sciences policy are contemplated by a new administration and the majorities elected to serve in the hundred 117th Congress.”
The biggest drivers of merger and acquisition activity in healthcare and life sciences, according to respondents, will be cost consolidation / economics of scale (58%), accretive acquisition strategies (34%), changing payment models (31%) and portfolio management and rationalization (28%).
