Healthcare Leaders Optimistic for 2022 Despite Staffing Challenges

According to Capital One’s annual healthcare corporate finance survey, after another COVID-19-focused year, healthcare leaders have an optimistic outlook for business performance at the onset of 2022. Over the next year, more than three-quarters (76%) of executives expect their businesses will perform better compared with the last 12 months, with just 2% expecting a drop in performance.

However, despite a positive outlook for the year ahead, leaders in the healthcare space remain concerned about staffing issues. Capital One’s survey found more than half (55%) of respondents consider recruiting and retaining employees to be the industry’s greatest challenge, followed by regulation and reimbursement (41%).

The study also found the biggest factors impacting recruiting and retaining employees include a lack of skilled applicants (27%), skilled applicants being outside of the pay range (22%) and competition from more flexible employers (20%).

“Despite continued pressures on the healthcare industry, it’s encouraging to see that most healthcare leaders are optimistic about business performance for the year ahead. However, that optimistic outlook may quickly change if leaders don’t prioritize finding solutions for recruitment and retention challenges,” Andrew Brode, head of healthcare corporate finance at Capital One, said. “As we navigate the ongoing pandemic, the ‘Great Resignation’ and a competitive job market, it’s critical that healthcare leaders strategically invest their time and resources to attract the right talent, or they may find their workforce isn’t equipped to deal with the expected growth their business is hoping to see in the next year.”

Additional findings from the survey included:

  • Nearly half of executives (49%) expect alternative site services (PPM, behavioral, urgent care, therapy) to have the most M&A activity over the next 12 months, followed by outsourced pharmaceutical services (33%) and post-acute services (SNF, IRF, home health and hospice) (31%).
  • Nearly half of the respondents plan to raise capital in the next 12 months. Of those that plan to raise capital, 32% plan on turning to private equity, 21% plan to utilize bank debt and 8% plan to use public equity or convertible bonds.

Capital One’s healthcare corporate finance survey was conducted during November and December and included 216 respondents from healthcare companies, primarily senior executives at pharmaceutical companies, healthcare IT and medical technology companies, hospitals, healthcare service providers and health systems.

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