“We’re predicting that 2026 will be a bit stronger than 2025 in terms of overall deal activity,” says Rebecca Springer, director of market development at Bailey & Company, a healthcare-dedicated investment banking group.

In a three-part installment of the “Corner Series Shorts” format, where McGuireWoods partner and host Geoff Cockrell dives into a narrower topic with experts, Rebecca shares her outlook on 2026.

What’s the next big wave in healthcare private equity investing? Healthcare consumerization. “That’s anything cash pay,” Rebecca explains. “Let’s avoid the reimbursement risk altogether and avoid most of the stroke-of-the-pen risk that we see across different healthcare sectors. Think plastics and concierge.” Rebecca offers a forward-looking perspective on other evolving theses, such as medical equipment services.

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This podcast was recorded and is for informational purposes only. By accessing this podcast, you acknowledge that Bailey & Co. makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of Bailey & Co. This podcast should not be used as a substitute for competent investment advice from a licensed professional or attorney in your state and should not be construed as an offer to make or consider any investment or course of action.

This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice

This is The Corner Series, a McGuireWoods series exploring business and legal issues prevalent in today's private equity industry. Tune in with McGuireWoods partner, Geoff Cockrell, as he and specialists share real world insight to help enhance your knowledge.

Thank you for joining another episode of The Corner Series. I'm your host, Geoff Cockrell, a partner at McGuireWoods. I'm thrilled to be joined by my longtime friend, Rebecca Springer. Rebecca is a director of market development at Bailey & Co after spending a long time as a journalist at PitchBook. And Rebecca really has her pulse on the finger of a lot of things in healthcare private equity. Over a few episodes, we're going to go through a number of discrete topics. So Rebecca, if you could introduce yourself and Bailey & Co, and then we'll jump into some discussions.

Sure. Thanks for having me, Geoff. Bailey & Company is one of the larger healthcare dedicated investment banking groups serving the middle market, 13 managing directors covering healthcare services, healthcare IT, payer services, and pharma services, MedTech life sciences, sell side advisory with enterprise values in the 50 to 500 range is typically where we play. My role leading our market development function focuses on developing proprietary in house research and sector strategy. And germane to this conversation involves bringing together what we're seeing in the market as a firm into a data informed and qualitatively informed view of where we think healthcare is heading and where we think the market's heading.

So Rebecca, for this episode, we're going to talk through new and evolving investor theses. One of my favorite pastimes. Getting ready for this episode, we were kicking around some and you always have your pulse on what is coming. Sometimes they're a little bit in the backwater, but they're going to grow in their significance. I've read all of your stuff on ICRA and other kind of areas that are a little bit nichey, but definitely a part of the landscape. From where we sit here heading into the beginning of '26, what new investment thesis or evolution of existing investor thesis do you see coming down the pike?

Yeah, one of my favorite pastimes as well. And I sit in a privileged seat for this, Geoff, where I get to collaborate with and speak with private equity investors who are pretty early on in their thesis development. And so, often here, early on in the cycle, as folks are beginning to focus more and more on a particular area. There are always these sort of waves of thesis development and interest that we see in the private equity world. We've certainly been in an employer health cost containment wave this year. We had pharma services a couple of years ago. Lots of focus on value-based care and digital health before that, site of care before that. You can sort of go back through the history. So we've been kicking around internally, what is the next big thing on the horizon?

I think there are clear signs, early signs, and there will continue to be signs of growing investor interest in what I'll bucket healthcare consumerization. On a sort of basic level, I think that's anything cash pay. So let's just avoid the reimbursement risk altogether and avoid most of the stroke of the pen risk that we see across a number of different healthcare sectors. Think plastics and concierge, right?

Or longevity related thesises.

Well, exactly. So then extend it one step further. And I think the bigger thing that's going on here is consumers, patients as consumers are in many cases looking for alternatives to the traditional healthcare system. And you can kind of think of it as a spectrum. I mean, on one hand, you have this enormous demographic wave pulling huge cost into the system, right? Chronic conditions, pharmacy spend, skilled nursing facilities, an aging population, absorbing a lot of resources from the healthcare system. On the other hand, you have folks who are finding that if they can access kind of alternative wellness preventative care and do so on a cash pay basis, that is sufficient for them in most cases if they're healthy and is also a sort of a lifestyle consumption category increasingly. So I think we have both things happening in the healthcare system at the same time. We've focused most of our investment historically on the high acuity, high cost side of the spectrum, but there is an evolving ecosystem of services, products, solutions on the alternative side of the system.

How big do you think that market is? Obviously, acute care drives a lot of cost in healthcare. People spending out of their pocket on things around the edges is definitely a market, but do you think it's a big one when you add up all the pieces?

It's potentially a large market and it's a growing one. It's one that is emerging in terms of what the models are. So think about concierge, think about functional medicine, think about compounded pharmacy products are often compounded, like HRT and TRT peptides. There's a growing list of technologies and treatment modalities that were developed for very specific therapeutic purposes that are now being used for general wellness, TMS, hyperbaric oxygen therapy, full body MRI, full panel blood work, SPRAVATO, continuous glucose monitors being used for fitness. You can sort of extend that list. And there are probably models that are emerging that we haven't quite pinpointed yet. But I think that the general theme holds, and the question is going to be for investors focused on this area, where are there assets of scale available and what are the revenue models that are most sustainable? How do you piece these things together? Is there a consolidation play? All of that is sort of in many cases to be determined.

Yeah. I'm seeing a lot of discussions take out of that lineup longevity businesses and everyone can see the super high profile influencer type models that flood your YouTube stream. Those kind of high influence doctors joining one of their programs is like crazy expensive, like $100,000, $200,000 a year, but there's not really a market yet for a version of that, that is not crazy expensive. And I think that that is going to consolidate into an actual viable business that is kind of cash pay, but more accessible for more people. I've talked to several people that are trying to put that deal together. And I agree that some version of cash pay that you had to pull together some of these strings could be very, very viable in scale and would be super interesting.

Yeah. The other dynamic that's worth watching here, and by the way, none of this is brand new, but I do think it's, again, a growing focus both for consumers and investors. The other dynamic to watch is the structure of employer health plans. We were speaking about this on our earlier short. High deductible, very prevalent at this point, and HSAs are growing in utilization and are something that the administration is interested in promoting the use of. HSAs, FSAs can be used for practically anything at this point, and there are models to enable that within the bounds of what's acceptable. But if you are looking at a $10,000 family deductible and paying cash for something using an HSA versus putting it through insurance, often it's more affordable to go the cash pay route. And so, I think that that's going to continue to drive a lot of this as well.

So consumer-driven spending, self-pay is one thesis. As you look into 2026, does your crystal ball see any other new evolving theses?

Yeah. Some of this is variations on an existing theme, but we're really interested in what's going to happen in medical equipment services. So the traditional play here is hospital imaging technology repair, pretty consolidated at this point. We think there are a number of ancillary and alternative plays on that core theme that could be really interesting for folks to look at, particularly in the lower middle market as some of these assets are smaller. But think about all of your ambulatory sites of care and the equipment, maintenance repair, and in replacement needs that those businesses have. So we'll be spending time in that category and publishing some research in the next couple of months here.

That's super interesting one. I've actually seen a couple deals and the discussions around them have been that a lot of that market has been dominated by OEMs. The analogy is like you buy the copier machine and then there's a service plan. So the OEM is kind of coordinating servicing that. And then after a certain point when you call the service people, they're trying to get you to buy a new copier. And if businesses can kind of break into that dynamic of servicing a lot of these fairly expensive pieces of equipment and peel some of that away from OEMs, I think there's real businesses that could provide a lot of value. I agree with that.

Yeah. And we think the legal and regulatory trends are trending in favor of sort of loosening the grip of OEMs in general. We think there's a demand for alternatives and there are a lot of, again, kind of highly fragmented standalone businesses that could potentially benefit from scale technology investment, wrapping related services together into a more of an end-to-end offering.

Rebecca, I think we'll end this short episode there. It'll be super interesting out at JPM to hear what people are kicking around. You're always welcome on this podcast. You're super smart and I love hearing what you're looking at, and we'll have to do it again later in the year.

Look forward to it. Thanks, Geoff.

Thank you for joining us on this installment of The Corner Series. To learn more about today's discussion, please email host Geoff Cockrell at gcockrell@mcguirewoods.com. We look forward to hearing from you. This series was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this series, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in this installment. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This series should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.

This podcast was recorded and is for informational purposes only. By accessing this podcast, you acknowledge that Bailey & Co. makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of Bailey & Co. This podcast should not be used as a substitute for competent investment advice from a licensed professional or attorney in your state and should not be construed as an offer to make or consider any investment or course of action.