Providers: Sparks of Innovation in Primary Care, but Labor Tightens

In the face of Covid-19’s widespread upheaval, healthcare providers were forced to adapt in 2021. New care models and supporting businesses blossomed, leading to a record year for provider deals.

A convergence of market trends has caused primary care in the US to evolve. First, value-based payment models, typically centered on primary care due to its critical role in managing overall population health, are on the rise. Second, Covid-19 has accelerated the adoption of virtual care. And third, patients are taking a more active role in managing their health.

These dynamics have fueled primary care investments from a range of financial sponsors, hospitals, health plans, pharmacies, and mass retailers. Investors gravitated to primary care organizations that use technology to improve access and the patient experience, often in the context of risk-bearing, value-based payment models.