Uncertainty over the outcome of U.S. health-overhaul efforts, along with the recession and tight credit markets, has caused delays in deal-making among health-care companies.

"There's certainly a pent-up demand," said Steven Elek III, PricewaterhouseCoopers' partner in charge of health-care transaction services.

Companies that provide managed care or other health services could see their business models and margins affected by changes resulting from the health-overhaul discussion. Small nonprofit hospitals, home-nursing companies and insurers that provide Medicare Advantage plans are among the areas primed for merger activity.

"There's been a clear hesitation by some of the larger strategic, typical buyers to do things right now until some of the Washington political dialogue has been resolved," said Marc Cabrera, managing director and head of health-care investment banking at Morgan Joseph & Co.

The deal flow hasn't entirely stopped, as the pharmaceutical industry has maintained a fairly brisk pace of large mergers and acquisitions, and some health-insurance and pharmacy-benefits management players have been planning or weighing deals.

Nonetheless, those who advise health-care companies on transactions such as mergers and acquisitions, private-equity investments and initial stock offerings say health-sector deal flow stumbled significantly last fall as the economy and credit markets seized.

Mergers and acquisitions of U.S. health-care companies came to nearly $160 billion last year, with 45% of the deals involving pharmaceutical companies, 36% biotechnology companies and 12% health-equipment and supply companies, according to Thomson Reuters.

In 2009 through late July, acquisitions of drug companies account for 89% of the more than $138 billion in health sector M&A deals, with fewer than $16 billion in total deals for medical-equipment suppliers, insurers, biotech businesses, hospitals and other concerns, Thomson Reuters reported.

With the slight loosening in capital markets, Elek said, there has been increased activity, though "there's still a significant amount of pent-up demand," from the middle market to multibillion-dollar potential transactions.

"We see a lot of our health-care, particularly hospital, clients taking a wait-and-see attitude," Elek said. "To the extent health reform ultimately passes and we know what shape it's going to take, it'll bring certainty to the market, and with that certainty, it'll lead to opportunities."

Some hospitals, particularly small nonprofits hurt by the credit crisis, are looking to be acquired or enter into ventures with stronger health systems in their areas, Elek said.

"Well-financed for-profit systems will have opportunities in the market," he added.

Once health-overhaul and related reimbursement questions are settled, Cabrera said he expects to see increased M&A activity among managed-care companies selling Medicare Advantage plans.

"That's been a very hot sector because it's been very profitable," Cabrera said. "I think there will be acquisition interest" and smaller companies looking to be sold.

Bigger players like UnitedHealth Group Inc. (UNH), Humana Inc. (HUM) and WellPoint Inc. (WLP) could be buyers, he said, adding that he was encouraged by UnitedHealth's plan to buy the northeastern U.S. subsidiaries for Health Net Inc. (HNT), which includes a Medicare component.

Cabrera, whose company provides corporate-financing services to mid-market companies, also said he expects increased M&A activity among home-nursing companies. He noted "a tremendous amount of activity" in the home-health business until last September.

Once the protocols governing the health-care information-technology infrastructure are further clarified, there could be deal activity in that industry as well, Cabrera said.

Venture and private-equity investors are interested in the sector, he said, and companies such as Allscripts-Misys Healthcare Solutions Inc. (MDRX) and Cerner Corp. (CERN) could emerge as acquirers.

-By Dinah Wisenberg Brin, Dow Jones Newswires; 215-656-8285; dinah.brin@dowjones.com