Healthcare M&As to surpass 2010 deals, fueled by reform

CAL/AAEM News Service calaaem.news.service1 at gmail.com
Tue Nov 15 17:03:07 PST 2011


Description: Description: Description: Description: CAL/AAEM: California
Chapter of the American Academy of Emergency Medicine

November 2, 2011

 

Healthcare M&As to surpass 2010 deals, fueled by reform 

 

FierceHealthcare
<http://www.fiercehealthcare.com/story/healthcare-mas-surpass-2010-deals-fue
led-reform/2011-11-02?utm_medium=nl&utm_source=internal> 

 

 

 

Deals between buyers purchasing physician practices--many of them
hospitals--doubled in the third quarter year-over-year, according to
healthcare research firm Irving Levin Associates, reports American Medical
News. The number of increasing transactions is largely attributed to
healthcare reform, according to the report.

 

Physician practice deals are the third most active types of mergers and
acquisitions, following medical devices and long-term care industries, notes
amednews. Physician practice mergers and acquisitions totaled 25 deals in
the third quarter, slightly down from the 27 reported deals in the second
quarter, according to the report.

 

Hospitals saw 16 M&As this past quarter, half of the 31 deals in the second
quarter.

 

Despite some reports, healthcare M&As are poised to continue, according to
Irving Levin Associates. In fact, the fourth quarter is expected to bring in
$20 billion in deals and surpass last year's amount of transactions.

 

Healthcare M&As in Q3 totaled 217 transactions this year, estimated at $58.4
billion. Overall, deals totaled 704 transactions in 2011, estimated at
$185.6 billion.

 

However, at last month's 16th Annual Wall Street Comes to Washington
Conference, experts noted that more hospitals are entering into employment
arrangements with physicians instead of acquisition deals.

 

"There's less acquisition of practices, less acquiring and paying physicians
good will for actually buying their practice, and more just pure employment
arrangements," said Gary Taylor, managing director of financial conglomerate
Citigroup. "[T]here's a defensive strategy. Because we are in a recession,
patient volumes, inpatient admissions, outpatient visits have slowed," he
said. "... If you actually employ the physician, you're going to end up
getting the bulk of their admissions and outpatient business."

 

 

 

Marcus Williams &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service

 

 

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