Health care companies are still attracting buyers, and those in the services sectors seem to be the hottest. Last month saw healthy deal volume, at 134 transactions. For a year that started slowly for health care mergers and acquisitions, March 2016’s deal volume is only 3% lower than the same month a year ago.

Industry sources have noted the dearth of deals across many industries going into March, even though some uncertainties that troubled markets earlier this year, such as China’s economic slow down, haven’t occupied center stage recently. Leverage is not an overwhelming concern, but credit has tightened over the past few months. And with the new, more onerous federal rules regarding tax inversions just issued on April 4, health care deal makers may decide to sit out a few months to gauge how the fallout will effect the healthcare market and valuations.

Health care services businesses are still popular. These sectors accounted for 60% of March 2016’s volume, with 80 transactions. That total is 7% higher than February, and even 5% better than in March 2015, when the momentum was building toward a record year in deal volume. Long-Term Care deals made up the bulk of services deals (at 27) and accounted for 20% of March 2016’s combined total. Far behind was the Pharmaceutical sector, which contributed 12% (16).

Digital health deals are on the upswing in 2016. Revenue cycle management (RCM) systems, which tie in to electronic health records and other data sources, are much in demand. At least seven deals in the eHealth sector have targeted RCM companies, compared with about a dozen in all of 2015.

Spending on health care transactions took a dive in March 2016, to $12.4 billion. That’s 77% lower than the $54.8 billion spent a year earlier, when AbbVie (NYSE: ABBV) announced its $21 billion deal for Pharmacyclics and OptumRx (NYSE: UNH) took out Catamaran Corp. for $12.8 billion. The largest deal in March 2016 was Canon Inc.’s (NYSE: CAJ) $5.9 billion acquisition of Toshiba Medical Systems (OTC: TOSYY).

It helps to look back a few years, to put this slow down in perspective. Hard to recall now, but the total spend on health care deals in March 2013 was just shy of $3.0 billion, on just 68 deals. The largest one that month? Valeant Pharmaceuticals (NYSE: VRX) paid $418 million cash for Obagi Medical Products. (At press time, Valeant won support from a majority of its lenders to waive default and ease some restrictions on its loan pact. The company is balancing a $32 billion debt load, and promised to pay a 50-basis-point fee to lenders that consented to the changes.)

Big deals aside, health care is still a market that investors want to play in, particularly private equity firms. Twelve of the 134 deals in March were made directly by PE firms, including Apax Partners, Audax, Bain Capital and Riverside Partners. Ampersand Capital made two exits, as well. At least 11 deals, all with long-term care targets, were made by REITs. And 109 of the 134 targets were privately held. It won’t be as much fun to watch the air go out of the M&A balloon in coming months, but the trends will always fascinate us. □