Key impacts to consider for 2024?

It’s too early to do a full look back and analyze 2023 to fully understand what impacts will be sustaining on our industry. We do know a few key events had major impacts. These include (1) less investment in early technology (as noted by a drop in venture capital funding); (2) war on two fronts; and (3) the continued need for new technology to be more cost efficient than ever before.

For mergers and acquisitions (M&A), we saw a healthy number of deals in healthcare. Not mega-size ones, but quite a number made 2023 an excellent year for sellers.

As we think ahead, in focus for 2024 includes:

1. Elections and the healthcare hot potato.

We know each election year brings interesting conversations relative to healthcare, especially related to drug prices and device costs. Hang onto your hat and keep doing the right things and this too shall pass!

2. Increase in M&A due to the dry powder and strategic valuations.

If you’re considering selling your business in 2024 (or know someone who’s thinking about it), this is a great time to “get in the game.” The two major reasons are (1) “dry powder” (the amount of money private equity firms have available to invest) has never been higher; and (2) strategic valuations in the public markets are close to all-time highs. These two factors lead seller valuations that’ll be competitive and in your favor!

3. Robotics and enabling technologies continuing to gain adoption.

Led by Intuitive Surgical, robotics has been one of the top trends in the last few years as players such as Medtronic and J&J are pursuing them in general surgery. Orthopedics is being led by Stryker’s Mako System and other fast followers (ZB, J&J, etc.).

In addition to robotics, enabling technologies complete the picture to enhance robotic solutions. For example, the ability for a surgeon to use robotics for the actual operation is enhanced with surgical planning software, computer-assisted navigation, intraoperative 2D to 3D imaging solutions, and more.

4. AI / ML continues to evolve.

It’s exciting to observe the continued innovation in the area of artificial intelligence and machine learning (AI/ML). The good news is the healthcare industry has been collecting huge amounts of data to provide more accurate clinical decisions. AI/ML tools are demonstrating the ability to improve patient outcomes. In some cases, AI/ML is outpacing payers’ ability to understand its benefits. For example, look at breast cancer. AI is now able to identify masses not visible to the naked eye, allowing for early detection and treatment. This leads to less cost to the system. So far, the impact of AI is understood for the patient and the clinician. The question of who pays for it is still a point of discussion for the payer, clinicians, and patients.

As we look forward, we encourage you to continue to innovate and the rewards will come.

About the authors: CEO Florence Joffroy-Black is a long-time medtech M&A and marketing expert. She can be reached at florencejblack@medworldadvisors.com. Managing Director Dave Sheppard is a former medical OEM Fortune 500 executive and an experienced medtech M&A professional. He can be reached at davesheppard@medworldadvisors.com. Value = Strategic Fit + Timing® is a registered trademark of MedWorld Advisors.

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