Matt Wolf

And if the goal is to keep dollars coming in the door, it takes a special sort of culture and leadership and frankly, an investment to say, no, despite the potential short-term pain, we are exiting this segment. We are exiting this business. We are, you know, separating from these clients. It's a very difficult thing to execute on, even if we, we know and we, um, we view it.

The other element of the study that's been going on that I think is also really interesting is the sort of capital per employee. We looked at Russell 2000 companies, excluding financials and real estate. And what is sort of the capex per employee? And that has increased significantly as well. 2,940 grand per employee 2024, almost $330,000 per employee.

The other element of the study that's been going on that I think is also really interesting is the sort of capital per employee. We looked at Russell 2000 companies, excluding financials and real estate. And what is sort of the capex per employee? And that has increased significantly as well. 2,940 grand per employee 2024, almost $330,000 per employee.

We've seen sales per employee increase as well, well above GDP growth. So we're seeing investments in productivity. We're seeing these investments in complexity. to generate those returns. But the whole decision space around how do we manage this complexity, even if we know it's a problem, it's still a very complex problem to navigate in its own right. So it kind of makes your head spin, really.

We've seen sales per employee increase as well, well above GDP growth. So we're seeing investments in productivity. We're seeing these investments in complexity. to generate those returns. But the whole decision space around how do we manage this complexity, even if we know it's a problem, it's still a very complex problem to navigate in its own right. So it kind of makes your head spin, really.

But at least we sort of know where we stand, hopefully.

But at least we sort of know where we stand, hopefully.

Thanks, Scott. Matt Wolf. I lead the healthcare and private equity group for RSM. RSM is really the largest consulting firm focused on the middle market. I help lead our healthcare space there. And I'm also one of our healthcare senior analysts.

Thanks, Scott. Matt Wolf. I lead the healthcare and private equity group for RSM. RSM is really the largest consulting firm focused on the middle market. I help lead our healthcare space there. And I'm also one of our healthcare senior analysts.

So I spend a lot of my time working with our economists and other analysts to study what's going on in the macroeconomic environment and what's going on in healthcare and putting together our data-driven perspective on that to share with our clients or people serving our clients and really anybody who will listen to me. So excited for the conversation today.

So I spend a lot of my time working with our economists and other analysts to study what's going on in the macroeconomic environment and what's going on in healthcare and putting together our data-driven perspective on that to share with our clients or people serving our clients and really anybody who will listen to me. So excited for the conversation today.

Yeah, I mean, a lot of the same as Bart and Holly, and I'll add some numbers to it, right? Because I get asked all the times, I'm sure my colleagues on the panel do, of what do you think deal volume is going to be this year? What's it going to be next year? What is that going to look like? And I'm really more interested in the shape of it and what it looks like and what are we going to have?

Yeah, I mean, a lot of the same as Bart and Holly, and I'll add some numbers to it, right? Because I get asked all the times, I'm sure my colleagues on the panel do, of what do you think deal volume is going to be this year? What's it going to be next year? What is that going to look like? And I'm really more interested in the shape of it and what it looks like and what are we going to have?

And it's specifically a distinction between deals in providers, companies that take reimbursement risk, and don't, right? We're seeing this shift away, as Holly sort of alluded to and mentioned, of sponsors wanting to still invest in healthcare, but not in reimbursement risk. Right now, according to Bloomberg data, we have about $250 billion of dry powder in healthcare buyout funds in the U.S.

And it's specifically a distinction between deals in providers, companies that take reimbursement risk, and don't, right? We're seeing this shift away, as Holly sort of alluded to and mentioned, of sponsors wanting to still invest in healthcare, but not in reimbursement risk. Right now, according to Bloomberg data, we have about $250 billion of dry powder in healthcare buyout funds in the U.S.

These funds, you know, they'll invest in other industries too, but a stated interest in healthcare. They're raising another $140 billion of healthcare buyout funds over the next handful of years. And to Bart's point earlier, now we, according to some pitch book data I was looking at, 55% of private equity-backed healthcare providers have a five-year or longer hold period from their lead sponsor.

These funds, you know, they'll invest in other industries too, but a stated interest in healthcare. They're raising another $140 billion of healthcare buyout funds over the next handful of years. And to Bart's point earlier, now we, according to some pitch book data I was looking at, 55% of private equity-backed healthcare providers have a five-year or longer hold period from their lead sponsor.

So there's going to need to be a changeover. We've seen since the Fed started lowering rates in September that the actual private credit financing rates to get a deal done hasn't changed. The 10-year, 20-year has increased since September. The interest rates are not going to come down. The multiples are not going to go up.

So there's going to need to be a changeover. We've seen since the Fed started lowering rates in September that the actual private credit financing rates to get a deal done hasn't changed. The 10-year, 20-year has increased since September. The interest rates are not going to come down. The multiples are not going to go up.

These will be transacted, and we've seen in a lot of conversations I've had, deals we've seen of sponsors moving from provider deals, but they want to stay in healthcare, investing into health technology, healthcare services, healthcare consulting firms. They want a piece of that pie, but not the direct reimbursement risk. watching that shift, I think will be really interesting.