Industry Report: Health IT, Digital Health, and RCM Q3 2025 [LECO]

Key Report Highlights

• AI Becomes Core Healthcare Infrastructure
  Artificial intelligence is no longer experimental in healthcare—it’s now foundational. Large hospitals have near-universal AI adoption, especially in predictive diagnostics, ambient scribing, and revenue cycle management (RCM). Healthcare AI spending has tripled year-over-year, with most executives naming AI their top investment priority.

• Landmark Legislation Reshapes the Landscape
  The One Big Beautiful Bill Act (OBBB), passed in July 2025, mandates massive cuts in healthcare spending but also injects major funding into digital infrastructure and AI governance. It enforces Medicaid restructuring, introduces interoperability mandates (e.g., FHIR API adoption), and compels providers to invest in AI oversight and transparency tools.

• RCM Market Undergoes Rapid Consolidation and Automation
  Private equity continues to fuel a wave of consolidation in the RCM sector. Landmark deals include Carlyle’s LBO of Knack RCM and Audax & Parthenon’s $565M buyout of Elevate Patient Financial Solutions. Providers are automating claims, denial management, and patient billing to improve margins amid reimbursement pressure.

• Telehealth and Remote Monitoring Enter Hyper-Growth
  Remote patient monitoring (RPM) and therapeutic monitoring (RTM) usage has surged, with Medicare claims data showing multifold growth. One in four Americans is expected to use RPM services within a few years, fueled by AI-powered analytics and wearable tech that supports chronic care and behavioral health outside of traditional settings.
• Investment Momentum Remains Strong Despite Market Pressures
  Despite underperformance in broader healthcare equities, digital health investment remains robust. M&A activity is thriving, led by Patient Square’s $2.6B take-private of Premier and Waystar’s $1.25B acquisition of Iodine Software. VC-backed IPOs and late-stage financings for platforms like HeartFlow, Ambience Healthcare, and Strive Health underscore continued market confidence.

Lawrence, Evans & Co. is a national boutique investment banking and advisory firm specializing in M&A, capital raising, and restructuring services for middle-market companies. Founded in 2003 and headquartered in Columbus, Ohio, the firm provides tailored financial solutions across healthcare, transportation, business services, and real estate sectors.

With a focus on companies generating under $250 million in revenue or $15 million in EBITDA, Lawrence, Evans & Co. serves clients in healthcare services (including behavioral health, home health, hospice, HCIT, and physician groups), senior living, logistics, managed IT, and cyber services. The firm supports both buy-side and sell-side mandates, as well as complex financial restructurings and turnaround strategies.

Lawrence, Evans & Co. leverages deep sector expertise, an extensive network of capital partners, and a hands-on advisory model to deliver strategic outcomes. Securities are offered through M&A Securities Group, Inc., a member of FINRA and SIPC.

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