Four Critical Value Levers for Infusion Services

The infusion services sector has drawn steady private equity investment in recent years, driven by its promising growth potential and critical role in patient care.¹ However, as we find ourselves past the “gold rush” era, we know there is still great revenue opportunity for consolidation with strategic optimization. This is a pivotal moment in infusion services for providers and investors — not just to capitalize on a growing trend, but to identify long-term, sustainable opportunities to boost revenue and reduce costs.

Organizations excelling in the current market are those that have optimized four key operational areas: (1) analytics and data, (2) vendor negotiations, (3) specialty pharmacy insurance benefits and (4) revenue cycle management. These four value drivers enhance efficiency, reduce costs and improve financial performance while ensuring high-quality patient care.

Infusion Market Outlook and Key Considerations

Forecasting Market Growth:
Fragmentation and projected growth within the infusion therapy market offer great opportunity.

The U.S. home and alternate site infusion therapy market is highly fragmented, as 50% of the market is composed of 800+ independently owned practices.²
With a 7.3% projected CAGR (2024-2033), infusion therapy is expected to generate growth sustainably in the coming years due to increases in the aging population, prevalence of chronic illnesses and therapeutic innovations.^{3, 4}

In order to capitalize on these opportunities, private equity and organizational leaders need to look beyond traditional acquisition and consolidation activities. Support is needed to strategically align the organization and its processes to achieve full value.

Impact of Market Conditions:
Additionally, reimbursement under the 340B program will play a role in how the infusion therapy market evolves:

This program promotes growth within the market by increasing access and availability to IV therapy drugs, thus covering more patients.⁵
However, hospitals are attempting to maximize 340B discounts by acquiring physician practices and increasing patient volume.⁶

As a result, payors are looking to guide patients towards alternative care sites and away from hospitals, which are currently the primary sites of care for infusion therapy with 54% utilization.⁷

Evolving Preferences:
There is a rapidly increasing preference from both providers and patients to shift the site of care from traditional, high-cost settings to more comfortable, lower-cost settings.⁸ Receiving IV therapies in ambulatory infusion centers (“AICs”) includes significant benefits,⁹ such as:

Decreased length of stay
Higher quality and personalized care
Financial advantages (costs reduced by almost 50%), and
Decreased burden on human resources

The emergence of AIC facilities is creating new growth opportunities to increase service capacity and revenue, enabling the infusion therapy market to gain significant investor interest.

Four Critical Value Levers for Infusion Services

As the infusion services market matures, success hinges on more than just expansion — it requires strategic optimization. Providers and investors must refine their operations to unlock sustainable growth. Four critical levers that drive this transformation include:

Analytics and Data: Leveraging advanced analytics and data-driven insights is crucial for optimizing operations. Within the infusion space, organizations need to focus benchmarks and KPIs related to:

Referral Receipt to Scheduling Time
Referral Receipt to Care Provided Time
Medication Revenue Margins
Turnaround Time per Front-end Function (e.g., documentation review, insurance verification and benefits, authorization)
Initial denials and write-off adjustments

While these metrics are nothing new, how you interpret and use this information is critical to maximizing revenue. In today’s market, providers struggle with managing and digesting data into a format that provides key insights into root-cause issues impacting key components to revenue such as referral volume, referral conversion and payment.

Vendor Negotiations with Manufacturers and Distributors: Strategic negotiations with drug manufacturers and distributors can significantly impact cost structures. Providers who establish strong relationships and negotiate favorable terms benefit from reduced drug acquisition costs, improved supply chain reliability and access to specialized products. Organizations will need to manage their spend strategically and track discount programs. This includes 340B, Group Purchasing Organizations (“GPOs”) and additional locally negotiated rebate structures. This not only helps manage expenses but also ensures the availability of high-quality medications for patients.

Specialty Pharmacy Insurance Benefits: Navigating the complexities of specialty pharmacy insurance benefits must be viewed through two lenses: operational process and strategy. Specialty Pharmacy benefits can have significant impact to the bottom line of an organization. Providers will not receive the margins on the medications from this patient population, as those dollars will go to the designated pharmacy. It is important for patient care and referral relationships to provide the administration services, but it will still be critical to monitor and manage this payor grouping to minimize cost impact. Providers who excel in this area can improve patient adherence to treatment plans, enhance satisfaction, reduce administrative burdens and maintain referral relationships.

Revenue Cycle Management (“RCM”) Operations: Robust RCM operations are essential for maintaining financial health. This includes optimizing billing processes, reducing claim denials and accelerating reimbursement cycles. Obtaining prior authorizations and verifying eligibility/benefits, especially for higher financial classes, is crucial in the infusion space. Effective RCM strategies also involve continuous monitoring and improvement of revenue processes to ensure accurate coding, timely claims submission and efficient payment collections.

By focusing on these value-creation levers, infusion services providers can strengthen their competitive position, improve operational efficiency and achieve sustainable growth in an evolving healthcare landscape.

Looking Ahead

The infusion services sector remains a major component of the broader healthcare ecosystem and continues to show additional growth opportunity, given the upward trend of positive patient outcomes. Its evolution mirrors key healthcare megatrends, including the shift towards value-based care, outpatient services, digital health integration and cost efficiency. The sector’s mirroring of these trends while maintaining high standards of patient care underscores its enduring appeal as an investment opportunity.

As healthcare continues to evolve, the infusion services industry is well-positioned to capitalize on emerging opportunities driven by innovations in clinical care, technology and operational efficiency. For investors and healthcare providers alike, the sector offers a compelling blend of growth potential, operational resilience and alignment with the future trajectory of healthcare delivery. This dynamic landscape highlights not only the sector’s current strengths but also its capacity for sustained value creation in the years to come.

Footnotes:

1: “Infusion Therapy Market is Poised for Continued Growth,” ambwealth (October 2024).

2: Davis et al., “Private Equity Investment in Infusion Services,” Provident Healthcare Partners (Fall 2024).

3: “U.S. Home Infusion Therapy Market Size Projected to Hit USD 32.81 Billion by 2033,” Precedence Research (28 Feb 2024).

4: “Infusion Therapy Market Overview,” Mertz Taggart (2024).

5: Ibid.

6: Ibid.

7: Hooker et al., “Infusion Therapy Market Update: Perspectives and Research on the Infusion Industry,” Bourne Partners (7 Aug 2024).

8: Ibid.

9: Ibid.