A look inside the shifting priorities in healthcare private equity and why operational execution is emerging as the industry’s next competitive advantage.
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For years, the healthcare private equity playbook looked fairly predictable:
Find a promising asset ✅
Structure the deal ✅
Grow the platform ✅
Exit at a higher multiple ✅
That formula hasn’t disappeared. But walking through the conversations at McDermott’s Healthcare Private Equity conference in Miami last week, it was clear the focus of the industry is shifting.
The talk wasn’t dominated by deal structures or clever financial engineering. Instead, panel after panel kept circling back to something far more practical: operational execution.
And operational execution today extends well beyond internal workflows. It includes the decisions organizations make about technology, vendor partnerships, and the broader operational ecosystem supporting the business. Healthcare companies rely heavily on outside vendors — for revenue cycle, technology platforms, administrative services, and increasingly AI-enabled tools. Yet those relationships are often managed as procurement exercises rather than as strategic operating decisions.
As several conversations at the conference suggested, deciding when to build versus buy, selecting the right partners, and managing vendors for performance can materially shape how well an organization actually runs.
A live poll during the conference captured the mood in the room. When attendees were asked what will most influence healthcare private equity performance over the next 12 months, more than half chose operational execution. Technology and AI adoption came in a distant second.
Poll results:
That result says something important about where the market is right now. Capital still matters. Strategy still matters. But increasingly, the differentiator is simpler than people might expect:
Can the organization actually run?
The deal market itself is also evolving. Due diligence timelines are getting longer, and buyers are digging deeper into operational performance before committing to a transaction.
At the same time, valuation gaps between buyers and sellers remain wide in many sectors. The result is slower deal velocity and more caution about when companies decide to go to market.
Several speakers pointed out that launching a sale process is a major lift for management teams. If the valuation isn’t there, the process can be distracting and exhausting without producing the desired outcome.
One panelist summarized the environment in a line that got a few knowing laughs in the room:
“Anyone can buy assets. It’s much harder to sell them.”
That reality is pushing organizations to focus much more seriously on operational readiness long before they consider an exit. For many companies, that readiness includes tightening operational processes, strengthening leadership teams, and gaining better control over the vendor and technology ecosystems that underpin day-to-day performance.
Another tactic gaining traction is something investment bankers described as soft market testing.
Instead of launching a full sale process, advisors quietly approach a small number of potential buyers with a simple framing: we’re thinking about doing something next year.
Those early conversations help gauge buyer appetite and valuation expectations before putting a company through the full process. In a market where timing and perception matter, that kind of quiet testing can be a useful signal.
One of the more interesting industry shifts discussed at the conference was the normalization of secondary buyouts.
A panelist joked that “coming to market a second time is the new black.” A decade ago, returning to market after private equity ownership sometimes carried a stigma. Today it’s increasingly seen as a natural step in the lifecycle of a healthcare platform.
That shift reinforces an important point: companies are being built for multiple ownership cycles, not a single transaction. Operational discipline matters even more when the asset may change hands more than once.
AI inevitably made its way into the conversation, though the tone was noticeably pragmatic. Most organizations are still experimenting rather than rushing into sweeping deployments.
The use cases getting traction are fairly operational: AI-supported front desk agents that help with scheduling and intake, recruiting tools that help screen candidates before human review, and automation that reduces administrative workload for staff.
The technology is interesting. But right now, most leaders are treating it as a tool for operational leverage rather than a wholesale transformation.
Hovering behind all of these conversations is the same long-term reality the industry has been talking about for years: demographics.
Roughly 11,000 Americans turn 65 every day. Demand for healthcare services will continue to grow, even as organizations face workforce shortages, cost pressures, and regulatory complexity.
Which brings the industry back to the theme that seemed to anchor nearly every panel discussion in Miami.
In the next phase of healthcare private equity, value creation will depend less on clever transactions and more on operational execution.
Deals still matter. Capital still matters. But the organizations that outperform will be the ones that know how to run.
And increasingly, that is where the real work begins.
Note: The conversations in Miami reinforced something we see repeatedly in healthcare organizations: value creation rarely happens in the boardroom alone. It happens in the operational decisions made every day after the deal is done.
