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Thank you for visiting Healthcare Banker a news aggregator of middle market Investment Banking activities in the Healthcare and Life Science Industries. This site addresses current affairs and other relevant topics dealing with Mergers, Acquisitions, Start-Ups, Capital Raises, Private Placements, IPO's, Lending and other aspects of Corporate Finance related to Healthcare Services, Healthcare IT, Medical Devices, and Life Science Businesses.

Wednesday, June 7, 2017

Q1 2017 Healthcare Services M&A Pulse - Volume, Value, Multiples

Healthcare Services Continues To See Elevated Activity  

While debate continues over the repeal and replacement of Obamacare, the US Health Services industry continues to be a hotbed of activity as Q1 2017 deal volume ticked up by 0.9% and 2.6% over prior year and prior quarter. Deal value however saw a sharp decline primarily as reporting for this sector was not as forthcoming with $7.9 billion disclosed, resulting in a decline of 49.3% and 58.2% over prior year and prior quarter. The shift towards value based reimbursements continues to have an effect on health systems M&A activity as they look to exercise more control over referral streams and ancillary services. This was evidenced by the 48 transactions among Physician Groups which experienced the greatest deal volume growth of 109% and 78% over prior year and prior quarter.

Thursday, May 4, 2017

Healthcare Deals Report: Looking Forward

VMG’s Health Care Transactions and M&A Report: 2016 Trends and 2017 Expectations

(from VMG Health

Health care M&A activity continued its half-decade long growth trend in 2016. Though the dollar value of total deals decreased relative to 2015 due to a spike in managed care megadeals in 2015, when excluding 2015, the dollar value of deals has continued to increase annually since 2012. The increase in both volume and value of health care M&A activity is driven by changing technology, an aging population, an increase in the number of insured people through the Patient Protection and Affordable Care Act (ACA), and the implementation of valuebased payments and alternative payment models. Taken together, these factors have driven providers to consolidate in an effort to take advantage of the economies of scale necessary to meet the goals of the “triple aim,” namely, increase service offerings and access to care, decrease cost, and improve the quality of care.

Wednesday, March 15, 2017

Hospital Acquisition Of Physician Practices: Things To Look Out For

3 hidden costs hospitals should consider when acquiring physician practices

(from Becker's Hospital) 

Consolidation has been increasing across the healthcare industry, and it's not just hospitals acquiring other hospitals. Hospitals are also increasingly acquiring physician practices.
A recent study by Avalere Health revealed hospital ownership of physician practices jumped 86 percent between 2012 and 2015. The study also found 38 percent of physicians were employed by hospitals in July 2015.
With this trend comes a myriad of challenges for hospitals and physicians, according to Heather Delgado, a partner and member of the healthcare department at the law firm of Barnes & Thornburg.

Monday, February 20, 2017

Q4 2016 Healthcare Services M&A Pulse - Volume, Value, Multiples

2016 Ends Strong Despite Lower Volume & Values

M&A activity in US Healthcare Services remained strong in 2016 when compared to other industries, despite seeing lower year over year deal values and volume. 

Overall deal volume in 2016 was slightly lower (1.4%) then in 2015, while deal value was significantly lower (59.6%) primarily as a result of several large 2015 Managed Care deals. 2016 Q4 was basically flat vs. Q3 with little movement both up and down on deal volume (1.3%) and deal value (-8.7%). 

The Affordable Care Act (ACA) continues to have a significant influence in Healthcare Services M&A driving both vertical and horizontal integration, as the shift from traditional fee-for-service reimbursements moves towards value-based payment models, spurring consolidation and resulting in larger but fewer players in the industry. 

However, despite the new administrations promise to repeal and replace the ACA the shift towards value-based care is not intrinsically tied to it, thus Healthcare Services transaction activity should remain strong in 2017 as payers and providers look to provide care at a lower cost with better outcomes.

Thursday, January 26, 2017

2016 Big 5 Healthcare Services Transactions

The 5 biggest health services M&A deals of 2016

The number of healthcare services deals only decreased slightly in 2016, but the overall value of healthcare transactions last year was significantly lower than in 2015. However, there were still many transactions exceeding $1 billion, according to a recent PwC report. 
There were 939 healthcare services transactions in 2016, down from 952 deals in 2015. In both years, long-term care had higher deal volume than any other subsector. 

The healthcare services transactions reported in 2016 had a total value of $71.7 billion. That's down significantly from 2015's total deal value of $177.5 million. The decline in total transaction value is largely attributable to fewer megadeals — transactions exceeding $1 billion — in 2016. There were 14 megadeals in 2016 compared to 18 the year prior.

Friday, December 9, 2016

Hospital M&A Lowering Prices, But Not For All

Value-Based Care, Price Transparency Drive Hospital Mergers

(from RevCycle Inteligence)
A HFMA report stated that value-based care and price transparency will add value to hospital mergers, including lower prices for consumers.

Healthcare system and hospital mergers will likely increase as new value-based care models emerge, according to a recent Healthcare Financial Management Association (HFMA) report. But the rise in value-based reimbursement and price transparency will improve value of the mergers to consumers.

Some healthcare system and hospital mergers have increased prices for consumers because the merged organizations have greater market share. However, the HFMA report indicated that risk-based reimbursement contracts and healthcare consumerism will incentivize merged entities to lower prices.

Thursday, November 10, 2016

Q3 2016 Healthcare Services M&A Pulse - Volume, Value, Multiples

Volume Down, Values Up

Based on available data, Q3 2016 M&A activity in the US healthcare services industry saw a decline in deal volume and an increase in deal values when compared to Q2 2016. Overall YTD M&A activity in this sector remains frothy and on-par with the record breaking numbers that were seen in 2015. However, with the US presidential elections in the rearview mirror and president elect Trump promising as part of his campaign platform to repeal and replace “Obamacare”, the healthcare services industry could be headed into rough waters that could dampen activity as we look to close out Q4 2016 and into 2017.