As we embark on a new year, our Industry Group leaders reflect on the changes spurred by 2020 — stories of novel products and services, shifting market trends, and new M&A strategies — and consider the implications for 2021. Access more industry perspectives in our related insights tab.
Despite the challenges of 2020, it turned out to be a great year for M&A in healthcare — much better than any of us could have predicted. And we're entering 2021 with a significant backlog, indicating that 2021 should be an even better year.
The first quarter of 2020 was mostly business as usual, and then COVID-19 hit. And despite the enormous need for and importance of healthcare services, we saw rapid action in March. Providers furloughed employees, restricted the number of patients they could see, and postponed all discretionary and elective procedures. Physical therapy, vision, dental, wellness, and even primary care providers saw an immediate and steep drop in revenue. Investors were as nervous as patients, avoiding the sector, and wondering how long it would take for volumes to rebound. But by the end of the summer, things had come roaring back, and we were back with a full slate of active deals — many more than we'd had during the dark days of June.
We're grateful for that, and for the systematic advancements made in the sector during 2020. Telehealth is a key example: Adoption grew dramatically, with more consumers trying this physically distanced delivery of health services out of necessity and discovering its benefits. Along the same lines, providers have gotten better at using technology to engage with patients, from scheduling to reporting test results, all in the name of reducing contact.
Operators shined right through the thick of things — making difficult decisions to ensure liquidity while focusing on delivering patient care at the core, and setting their businesses up for success in the post-COVID-19 world. It will be interesting to see how changes to clinical management and the patient experience persist post-pandemic, and particularly how waiting rooms, appointments, and patient interactions are handled. We're also watching the pharma space closely to see how the pressure to create a COVID-19 vaccine will yield broader benefits and opportunities.
So, overall, 2020 was undoubtedly a year of silver linings for healthcare and life sciences, and we're eagerly looking forward to 2021.
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