Earlier this month, more than 2,200 healthcare leaders convened for McDermott Will & Emery’s Healthcare Private Equity (HPE) Miami conference to discuss the evolving challenges and trends shaping the healthcare industry in 2025. For two days in the Miami sun, attendees were able to engage with insightful panels that covered topics ranging from how to navigate private equity investments to what the hot investment sectors are.
A plethora of topics were explored by panelists and perspectives, and although opinions varied on the trajectory of M&A activity in 2025, a prevailing sentiment of cautious optimism emerged… if investors play their cards right.
Several themes stuck out to the LevinPro HC team: the importance of work culture to retain employees, M&A trends shifting away from traditional healthcare models towards new models, and the Trump administration presenting uncertainty for the healthcare landscape.
One of the panels that stood out centered around how to combat the labor and physician shortage, focusing on creating a work culture that promotes accountability and responsibility. It should be noted that as media coverage of the conference the Levin team was bound by Chatham House Rule so will be referring to all panelists as anonymously as possible.
“Don’t assume that culture is static,” said one speaker, who is on the executive leadership team of an Illinois-based medical group. With this idea, the panelists addressed the need to create a work culture that shifts with the needs of the company as well as the employees. In doing so, physicians, and other healthcare providers, will have a stronger reason to stay at the company. Things like transparency from leadership, providing a stake in the company and never compromising quality of care were echoed across the panel as essential qualities to retain employees.
Another panelist expanded on this idea but spoke directly to the fact that top-tier talent is leaving the healthcare field, no matter the salary. While the labor shortage is not a new topic to many healthcare leaders and conferences, it was refreshing to hear the panelists speak to the idea that more than just money retains employees. “Providing not only a stable but a predictable income helps retain talent,” said a panelist, from a medical device manufacturer based in Colorado. A company that implements these strategies effectively will be better equipped to navigate potential challenges posed by tariffs and high interest rates.
And high interest rates were another major concern for many of the panels. “[I don’t] really see a low cost of capital coming back anytime soon,” said one speaker from a Boston financial services firm on a panel that focused on hot investment sectors, highlighting how the cost of capital is a concern for many speakers across the conference.
The speaker cited that part of the reason for this is that historical outlets that would relieve pressure for cost of capital can only relieve so much pressure. And limited partnerships are feeling that pressure. However, he remained optimistic that there would be more deals this year because there is a continuing shift away from traditional provider models towards commercialization models that will drive transactions.
This panelist, along with the other speakers, believe that the hot sectors currently driving transactions in the healthcare space are the ones that “go beyond the traditional payor models,” such as MedTech, pharma services and digital therapeutics.
One panelist from a New York-based private equity firm said, “Pharma services is an area of interest for investors because of drug pricing and regulatory risk. Currently, there are a lot of high-cost specialty medications being approved, which raises questions such as: Will insurers and patients be able to afford these medications? Does the infrastructure exist to deliver these medications? Will patients understand the economic value of these medications? All of this creates interest.”
However, he did note that despite these factors, there is uncertainty for how long the high demand will remain as investors may struggle to find companies that will foster the shift away from traditional provider models. Although, to be clear, nobody was saying that things like MedTech or pharma services will replace physicians from a patient’s perspective, there will always be a need for physicians, but rather that M&A volume is shifting to more technology-based sectors.
The final hot button topic that circulated throughout many of the different conversations was how the Trump administration could impact healthcare and healthcare M&A. The same panelist from the previously mentioned New York firm expressed less concern over conventional fears like Medicare or Medicaid Advantage cuts, viewing that as unlikely due to their essential nature and political sensitivity. Instead, he focused on unpredictable shifts, such as pricing regulations and policy changes.
“With any new administration, there’s always going to be a flurry of activity. So, try to minimize reimbursement risk across your portfolio,” he said. This speaker continued to suggest that companies, to manage stroke-of-the-pen risk, could focus on private pay businesses like MedTech that are not directly reliant upon reimbursement pricing. Overall, this speaker presented a message of ‘not putting the cart before the horse’ and to not stress before there’s something to be stressed about.
On the other hand, there were several panelists that expressed more concern with the new administration. A speaker from a New York venture capital firm highlighted the Trump administration’s rapid policy shifts posing challenges for investors. She even joked that advice she gave today may be moot by tomorrow. She also emphasized the need for risk management and strategic investment decisions to either adapt to or influence this fast-paced environment.
Another panelist from a Boston-based investment firm, believes that during the Trump administration there may be less enforcement of regulatory laws in the hopes of creating new business opportunities. This was met with a level of caution, which was shared amongst the panelists and the audience.
Overall, the conference underscored the resilience and adaptability of the healthcare sector, as well as opportunities for investors. As companies ready for a year of strong M&A activity, the HPE Miami conference may have provided (or altered) some strategies for navigating an evolving and uncertain regulatory and financial landscape.
