[co-author: Kathy Contratto of RSM US]

The next in our series of posts sharing key takeaways from panels at the Healthcare & Life Sciences Private Equity and Lending Conference is authored by our colleagues Brian King and Royce DuBiner, and Kathy Contratto of RSM US.

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Consolidation promises to be an ongoing trend in the medical device market in 2020. The industry appears focused on diagnostic imaging, telehealth, and wearable devices. According to experts who spoke on a panel at the 17th Annual Healthcare and Life Sciences Private Equity and Finance Conference on February 19 and 20, there could be significant market disruptions in the coming year as price transparency and Medicare-for-all continue to dominate policy discussions.

Experts included Kathy Contratto, Director, Healthcare Services, RSM; Matthew Evans, Managing Director- Healthcare, Monroe Capital; Stephen Morales, Senior Vice President, Marwood Group; and Dr. Dikesh K. Patel, Pharm.D., Supervisor, Pharmacy Team, RSM. The moderator was Phil Smith, Managing Director, Duff & Phelps.

Here are four key points from the panel discussion:

1. Market Consolidation. Consolidation remains a dominant trend in the medical device space. Experts emphasized increased activity in the diagnostic imaging space as well as wearable device technology. There has been a trend toward consolidation for the past few years, and experts anticipate the trend to continue.

2. Telehealth. New technologies continue to improve access to care via telehealth. Experts expect the flurry of activity surrounding new telehealth platforms to continue, as patients continue to become more comfortable with receiving their healthcare through telemedicine. Platforms like Teledoc allow patients to have access to specialists in minutes, and apps like Capsule promise to deliver drugs to patients with an Amazon-like business model. Companies like SpaRx allow patients to speak to a pharmacist in real-time via a kiosk and allow medications to be dispensed by a vending machine. Experts agree that they expect the market for wearable devices and novel telehealth platforms to continue.

3. Medicare-For-All. Experts expect policy discussions surrounding Medicare-for-all to have a substantial impact on the drug and device market. Significant uncertainty remains as to what effects the proposed Medicare-for-all would have on the market. Some proponents voice excitement in the increased coverage such a proposal would have, but others remain skeptical that such sweeping changes would receive Congressional approval.

4. Price Transparency. Regardless of the outcome of the 2020 presidential election, price transparency is expected to be at the center of the healthcare debate. Experts highlight the obvious concern that transparency efforts will likely have a negative effect on profit margins, and expect the market to respond to these pressures by finding ways to make operations more efficient. Whether we have a Republican or Democrat President in office later this year, there is certainty that price transparency will be a priority and first step toward putting the American patient in control.