Inflation, rising interest rates and uncertainty about changes to government heath programs could drag healthcare dealmaking in 2023, despite renewed interest in hospital and physician groups, according to an analysis the consulting firm PwC published Tuesday.

From May 2022 to May 2023, buyers invested $85.2 billion in 1,661 transactions for hospitals, health insurers, home health providers and other healthcare companies, PwC reports. The number of deals declined 4% and investment fell 15% compared to May 2021 to May 2022. Six large transactions worth more than $5 billion apiece accounted for more than half of the money spent on healthcare mergers and acquisitions during the more recent period, the report says.

Here are five trends highlighted in the PwC report:

Hospitals transactions pick up

Investment in hospitals increased 8% to $10 billion, with the total number of hospitals purchased rising by 6% to 70. Health systems acquiring facilities drove most of the activity, such as Charleston, West Virginia-based Vandalia Health spending $92 million to purchase a hospital from Franklin, Tennessee-based Community Health System in April. States resuming Medicaid eligibility checks after pausing reviews during the COVID-19 public health emergency could cause a short-term financial hits to hospitals heavily reliant on Medicaid reimbursements, representing an investment opportunity for distressed asset buyers, the report says.

Physician group deals grow

Spending on physician group acquisitions rose just 1% to $3.9 billion on 620 deals, which was 22% more than during the year-ago period. Private equity investors in particular have acquired and combined medical practices into multispecialty providers in recent years, but may be moving on to other areas, such as technology companies and firms that specialize in alternative payment arrangements.

Under current economic conditions, private equity buyers will shift their approach from direct buyouts to partnership models, according to PwC. Humana’s joint venture to build primary care clinics for Medicare recipients with private equity group Welsh, Carson, Anderson & Stowe is an example of such an arrangement.

Healthcare services attract investment

Investors poured $38.2 billion into 546 contract research organizations, ambulatory surgery centers, home infusion providers and medical office companies, as spending fell 10% and volume 6%.

Rehabilitation, home health deals falter

Buyers spent $1.4 billion on 61 deals for rehabilitation providers, a 59% decline in value and 24% drop in volume. Investment in home health and hospice providers dropped 33% to $12.5 billion. CVS Health’s $8 billion purchase of Signify Health represents the largest among the 102 deals in this sector.

Medicare Advantage changes push insurer deals

Health insurance transactions declined 6% to 44 and spending was unchanged at $6.4 billion. Insurers are likely to take advantage of the three-year phase-in of changes to Medicare Advantage risk-adjustment by investing in specialty benefit managers and technology tools that could reduce medical expenses, PwC predicts.