Key Takeaways from 19th Annual McGuireWoods HealthcareGO Conference

McGuireWoods held its 19th annual HealthcareGO conference September l5-16 in Charlotte, North Carolina, bringing together leading healthcare and life sciences investors, lenders, executives and advisors. This article highlights key messages from discussions on the healthcare M&A landscape, life sciences investment trends, enforcement developments, behavioral health market maturation and the integration of AI into healthcare operations.

Evaluating the Future State of Healthcare

The organizations that treat AI as a reason to rethink the entire care model, not just to automate the existing one, will define the next decade of healthcare.

The HealthcareGO conference kicked off with a fireside chat framed around a mental leap to the year 2035, “What Went Wrong in Healthcare and Who Fixed It?” The conversation established two overarching themes for the conference: (1) current landscape of the healthcare system’s structural challenges, and (2) the need to “pace the frontier” by deliberately slowing AI development to ensure safety and human control in the face of trying to solve to those challenges. During a live poll, 86% of the audience reported using AI for a medical question before asking their doctor, underscoring how integrated AI is becoming in critical day-to-day decision-making.

The speakers, who included a clinician and health tech developer, noted that health systems, medical schools and payers continue to operate within a reactive, volume-driven model, despite a significant share of health systems operating at a loss. Despite consumer concerns about a shift toward impersonal healthcare services, medical education still weighs prospective students’ objective metrics (e.g., grades and standardized test scores) over their ability to communicate effectively and display empathy. The speakers also highlighted the evolution of executive priorities, with financial measures being prioritized above broader indicators of quality, access, patient experience and long-term outcomes.

The overarching takeaway from this discussion was that AI tools will be integral to the future of healthcare, but they should be deployed to resolve the burdens typically associated with patient care, rather than purely to increase efficiencies and bottom lines.

Healthcare M&A Landscape

Disciplined, and focused investing has replaced the sponsor-driven playbook of prior cycles. The best opportunities will be claimed by those who can demonstrate durability in a higher-rate environment.

The M&A landscape panel painted a picture of a market in uneven recovery. Buyer appetite remains strong, but deal volume has yet to return to peak levels. Add-on and tuck-in acquisitions are driving most of the M&A and finance activity, while new platform transactions remain scarce.

Panelists emphasized that the era of cheap credit is over, and that operational excellence is now the differentiator, as buyers demand high-quality management teams, diversified reimbursement, scalable infrastructure and clean earnings before leaning into a transaction. Premium assets in high-demand subsectors such as infusion, oncology and post-acute services continue to clear at full value, while transactions focused on acquiring dental, vision and veterinary care practices are seeing lower valuations.

On the financing side, both traditional bank lenders and private credit think there will be a slow recovery of debt financed healthcare transactions, but not a robust quick recovery as macroeconomic headwinds still persist. Asset quality is a fundamental focus of both private credit and bank lenders in evaluating debt finance transactions, which has resulted in more competition amongst lenders for the same transactions. Private credit has displaced a material portion of the traditional bank and syndicated lending in the lower-middle market, offering speed and flexibility with structures and some terms. Panelists did, however, note that the relative newness of private credit’s expanded role means its performance through a full credit cycle remains to be seen and that market participants are continuing to build out restructuring capabilities. Limited partners (LPs) are demanding a return to distributions over deployments, pushing sponsors toward differentiated value-creation plans rather than traditional roll-up strategies.

The regulatory environment is also reshaping deal geography, as some states have become red-light jurisdictions for many investors due to transaction approval delays, tightening corporate practice of medicine rules and management services organization (MSO) structural scrutiny. In addition, noncompete enforceability and physician retention remain critical considerations for long-term growth.

Life Sciences Investment Landscape

Investors should prioritize fundamentals over chasing the AI buzz.

The life sciences investment panelists reinforced that institutional capital continues to flow toward quality predictable assets. Private credit managers are favoring chronic-disease therapeutics and essential pharma services such as contract development and manufacturing organizations (CDMOs), commercialization platforms and clinical trial infrastructure. They cautioned that investors should look past the AI label now affixed to many companies, making an effort to distinguish between businesses in which AI is genuinely embedded in the intellectual property and those in which it amounts to little more than an enterprise license on a generative tool.

On the regulatory front, panelists noted that the FDA is stabilizing after a turbulent period, with newly installed center directors signaling a return to predictability and empowered review divisions. They cautioned, however, that the evolving policy landscape, including China-originated assets and outbound investment controls, remains a key risk factor for mid-market dealmakers.

Panelists observed that LPs across the industry are facing a liquidity squeeze, and they need distributions to meet their own obligations and fund new commitments. At the same time, the M&A thaw in biopharma, illustrated by large-cap acquirers pursuing disciplined, multi-structured deal programs, is creating new opportunities for well-positioned mid-market life sciences companies.

Compliance and Enforcement

Compliance infrastructure, proactive monitoring of AI and self-disclosure are no longer optional in this enforcement environment.

A compliance and enforcement fireside chat provided a rare inside look at the DOJ’s fraud enforcement overhaul. The conversation detailed the newly created National Fraud Enforcement Division, the first new division at the DOJ since the post-9/11 establishment of the National Security Division. The Fraud Enforcement Division consolidates white-collar fraud litigating units into a single entity, and DOJ leadership plans to roughly double that division’s prosecutor headcount over the next 18 to 24 months.

On the healthcare enforcement front, the new National Fraud Detection Center (NFDC), a centralized data repository, ingests reimbursement submissions from the Centers for Medicare & Medicaid Services (CMS) and state agencies in real time, using algorithms and analytics to identify outliers, spending anomalies and bad actors far faster than traditional whistleblower identification. Emphasis was placed on the NFDC surfacing high-quality case leads at a high volume, noting that while qui tam relators remain important, the government’s ability to independently and quickly detect fraud is fundamentally improving.

Separately, the DOJ rolled out a District Fraud Counsel program, embedding a dedicated fraud coordinator in each of the more than 90 U.S. Attorneys’ offices to improve cross-district coordination between Main Justice and local prosecutors. With respect to enforcement priorities, COVID-era fraud cases continue to work their way through the system under a 10-year statute, while newer investigations increasingly reflect the DOJ’s focus on reimbursement integrity and billing practices across a broadening range of healthcare services.

The discussion emphasized the significance of the DOJ’s reconstituted corporate enforcement policy, which applies uniformity across all divisions and prioritizes individual accountability. The policy now offers meaningful incentives for voluntary self-disclosure, full cooperation and timely remediation.

Behavioral Health and Substance Use

Behavioral health is transitioning away from a volume-driven model to an outcomes-driven investment thesis, in which clinical quality, operational discipline and community partnerships define the winners.

The panel focusing on behavioral health and substance use illustrated how the sector that has grown significantly over the past decade. Panelists described an industry increasingly prioritizing sustainable clinic-level margins, cash flow conversion and measurable clinical outcomes, building on the rapid growth phase that expanded access and established scale over the prior decade.

They noted that payers are increasingly pushing back on the access-at-all-costs approach that dominated the post-COVID era, demanding evidence of quality and patient engagement rather than simply network breadth. Multidisciplinary care models combining talk therapy, medication management and interventional modalities such as transcranial magnetic stimulation (TMS) are emerging as the investable standard, with data showing that patients who engage with multiple services achieve significantly better outcomes. At the same time, panelists cautioned against trying to be “all things to all people,” emphasizing that clinical quality suffers when platforms overextend, and that strong community partnerships with health systems and specialty providers remain essential.

On the growth strategy front, de novo expansion is proving more capital-efficient for well-run platforms with repeatable clinical models, particularly those in new geographic areas with established referral networks. State regulatory scrutiny, including California’s 90-day transaction review and tightening corporate practice of medicine rules, is adding complexity to deal structuring and sidelining less experienced investors, though panelists noted that well-prepared operators with strong compliance cultures continue to transact successfully.

AI in Healthcare

Healthcare organizations achieving increased success with AI are those that have established internal governance structures, mapped how their teams are already using the technology and have built deliberate, partner-informed roadmaps rather than treating adoption of AI resources as an ad hoc experiment.

A consistent focus of the conference was the accelerating integration of AI into healthcare operations. The AI in Healthcare panel drew a clear distinction among three categories of adoption: (1) administrative automation, (2) clinical prediction and (3) clinical care delivery. Current adoption is primarily concentrated in the first category, in which ambient scribes, voice agents and revenue cycle tools deliver measurable results.

Panelists emphasized that successful implementation demands operational change management, leadership buy-in across clinical and administrative teams, and a problem-first approach. The panel cautioned against the board-level pressure to adopt AI hastily, recommending a crawl-walk-run methodology that perfects one use-case before expanding.

With respect to the vendor landscape, panelists identified finding a partner that understands the nuances of a specific specialty as the most critical success factor. They encouraged providers to evaluate specific point-of-care AI solutions alongside platform-native offerings from electronic health record (EHR) vendors to ensure the best clinical fit, and carefully review contract terms before committing. They also emphasized the importance of governance guardrails when implementing AI tools in order to guard against “shadow AI,” which can risk exposure of protected health information (PHI) and financial data.

McGuireWoods invites you to continue the healthcare M&A and investing conversation by joining industry leaders as the Healthcare Private Equity and Finance Conference heads west in 2027 to the Arizona Biltmore.