Inorganic revenue impact of recent M&A wave fades as HITS vendors move into 2017
Healthcare IT services (HITS) trailing 12-month revenue decelerated to 5.3% in 1Q17, from 6.8% in 4Q16, as the inorganic impact of acquisitions made by HITS companies since late 2015 has diminished significantly. Overall M&A activity among vendors covered in Technology Business Research, Inc.’s (TBR) Healthcare IT Services Benchmark also slowed, reducing the inorganic boost to average growth rates. Exacerbating the impact of acquisition-related factors on overall HITS growth was more cautious IT spending. Several HITS vendors reported clientele is more hesitant to spend due to post-election uncertainties surrounding the Affordable Care Act (ACA) and other regulatory-related elements.