Finance executives bullish on health IT investment in 2018

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Healthcare finance executives expect heavy investment in health IT and telemedicine in 2018. (Image: NiroDesign / iStock / Getty Images Plus)

Healthcare finance executives have lofty expectations for the health IT sector over the next two years, according to a new survey.

More than half of executives expect health IT and data to see “a lot” of investment activity in 2018 and 2019, outpacing other notable industries like pharma and biotech and health system operations. Eighty-five percent of respondents said health IT will experience modest or high growth in the coming years, according to a survey conducted by KPMG and Leavitt Partners that included feedback from 265 finance executives at healthcare corporations across the industry.

Source: KPMG/Leavitt Partners Survey

But 58% of respondents also said assets within the health IT sector were overvalued. An equal percentage of respondents expect health IT valuations to either increase or remain the same.

The survey revealed elevated expectations for the telemedicine market specifically, with 60% of respondents indicating telehealth valuations will increase over the next two years. More than 4 in 10 respondents said telemedicine will experience high growth. Interestingly, 53% categorized reimbursement in the sector as stable.

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"Health care stakeholders are anticipating accelerated investment activity in sectors that are enabling the transition from volume to value, such as digital technology, data analytics and outpatient services," Mike Leavitt, founder of Leavitt Partners and Chairman of Leavitt Equity Partners said in a release. "We believe this report can provide insights to executives and investors as they navigate in an evolving healthcare ecosystem."

Overall, more than one-third of respondents said the healthcare a life sciences markets are sitting on a moderate bubble, while 22% said the bubble is likely to burst.

Digital health investment set a torrid pace in 2017, outperforming last year’s total by the end of the third quarter. That investment comes despite a year full or regulatory uncertainty but bolstered by the ongoing march towards value-based care and a greater emphasis on consumerism in healthcare.