It has been widely reported that healthcare mergers and acquisitions are off to a strong start this year after ending a record-breaking year in 2017. In fact, the healthcare press this year has been replete with articles extolling the “good news” about healthcare investment and transaction activity. For example:

  1. As reported by Kaufman Hall, the number of “hospital and health system transactions announced in 2017 totaled 115, up 13% over 2016 and the highest number recorded in recent history.” Kaufman Hall, “2017 in Review: The Year M&A Shook the Healthcare Landscape,” January 29, 2018;
  2. According to data from Bloomberg, the total deal value of healthcare transactions announced in the first quarter of 2018 is approximately $156 billion. “Health-Care M&A Balloons in Busiest Start in More than a Decade,” by Manuel Baigorri (March 28, 2018) (https://www.bloomberg.com/news/articles/2018-03-28/health-care-m-a-booming-in-busiest-start-in-more-than-a-decade). Not surprisingly, Bloomberg’s transaction value data also shows that first quarter 2018 is the busiest first quarter in more than ten years; and
  3. As reported last month by Forbes in, “Why Private Equity Loves Retail Healthcare from 2012 to 2017,” Nirad Jain, Kara Murphy and Jeremy Martin, April 4, 2018, https://www.forbes.com/sites/baininsights/2018/04/04/why-private-equity-loves-retail-healthcare/#4883ce071924, “From 2012 to 2017, the number of deals involving retail health companies—those that operate freestanding health-related outlets like dental clinics or urgent care facilities—has soared, increasing at a compound annual rate of 34% in the North American market.” Citing, the Bain & Company’s Global Private Equity Report 2018 (http://go.bain.com/global-private-equity-report-2018.html), the authors write that the growth in retail healthcare transactions is, in some significant part, a function of the fact that, “retail health is a fragmented, high-margin sector with strong growth characteristics. In a sea of high prices, it still offers targets at reasonable multiples and many opportunities to unlock substantial value.”


Continue Reading The Shape of Healthcare: Blockbuster Mergers, Retail Healthcare, and Marcus Welby, M.D

San Francisco (Tuesday, January 9, 2018): Day 2 of the 2018 JP Morgan Healthcare Conference provided concrete examples of the trends that have been discussed in recent years – the impact of shifting healthcare delivery modalities on hospitals, the opportunity for retail medicine, the need for more effective management of chronic conditions and the increasing relevance of the Chinese markets. While some attendees complained about a lack of blockbuster announcements, today’s presentations were intriguing as an example of how the consulting and conference recommendations of the 2010 – 2014 period now are being played out in the real world of healthcare today. As the CEO of Advocate Health Care said, with tongue in cheek and quoting Game of Thrones, “Winter is coming….” and healthcare delivery will become even more difficult. There also was cause for optimism as well, as we saw multiple vibrant strategies for growth, including a continuing shift to value-based and risk-based reimbursement structures.
Continue Reading Notes on Day 2 of the JP Morgan Healthcare Conference