Your Primer to Healthcare Mergers and Acquisitions

Author: Tom Schramski

Healthcare Sectors, Market Trends
6 Reasons Why “The Outpatient Way” Will Continue To Lead Healthcare in 2019

For more than a century, American healthcare has been focused on inpatient or hospital care as the most appropriate location for necessary medical interventions. However, in the past decade this approach has come under assault. According to Modern Healthcare, hospital admissions and inpatient days have declined steadily since 2008. What’s fueling this change? These are a few of the reasons.

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Exit Planning
There Are No Unrealistic Expectations

There is an unfortunate term in the world of healthcare M+A intermediaries when they discuss a difficult, or even disastrous, transaction attempt: the “unrealistic expectations” of a potential seller. It is not uncommon for advisors to blame a failure on the seller’s resistance to adopting transactional expectations more in line with the “real world.” In my experience, this reaction misses the point and is a disservice to the client.

A more self-observant perspective considers the following...

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Exit Planning
8 Practical Strategies To Maximize Your Healthcare M+A Success

There is quite a bit written about the failure of mergers and acquisitions (M+A) activity, occasionally even competing with President Trump’s tweets. The reasons are as numerous as the transactions themselves, while the analyses tend to focus on sexy megadeals and the related personal intrigue of fractured family relationships (the sizzle that is apparently attractive in today’s deal world).

By comparison, a focus on what really drives value in lower middle market healthcare transactions is lacking. You don’t read about it in the statistics and you rarely hear a success story of how an organization built sustainable value over time, to the benefit of the owners, employees and customers. Fortunately, there are many success stories based on consistent strategies that healthcare entrepreneurs use to complete transactions.

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Healthcare Sectors, Market Trends
7 Insights On Why I/DD M+A Has Just Begun

Just 50 years ago nearly 200,000 people with I/DD were locked up in large institutions across the US. Today, about 27,000 people with I/DD live in such environments, including skilled nursing facilities (SNFs) and other similar institutions. This exodus into our communities has dramatically improved the lives of people with disabilities, as well as their families. It has also created a dynamic marketplace for the organizations providing services and supports to these same people.

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Market Trends
9 Factors That Are Accelerating Consolidation In US Healthcare

You cannot escape it, not if you have eyes and ears. The US healthcare market is obsessed with consolidation. Optum (insurance) has acquired Surgical Care Affiliates (ambulatory surgery centers), Cigna (insurance) intends to take over CVS (retail pharmacies) and Express Scripts (pharmacy benefits management), and DaVita (kidney care) now runs The Everett Clinic (physician network). To add to the mania, Amazon, Berkshire Hathaway, and JP Morgan Chase intend to form their own healthcare insurance company. Why now?

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Healthcare Sectors, Market Trends
5 Reasons Why Consumer Direction Is The #1 Factor In The New I/DD Marketplace

In its purest form, consumer direction means that people have significant decision-making control over the services and products they receive. Most people believe this is a right that we can exercise in whatever marketplace we enter – buying a car, choosing where we attend college, shopping for groceries and so on. We also understand that while there may be obstacles, especially financial limits and resource availability, we are free to challenge them as we choose.

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Healthcare Sectors, Market Trends
6 Reasons Why SUD Referrals Are Headed The Outpatient Way

Nearly 50 years ago, Anais Nin wrote that “we don’t see things as they are, we see things as we are.” Her observation about human projection fits well for the Substance Use Disorder (SUD) market, where we are in the midst of continuing evolution. One of the most significant changes is the shift away from large inpatient facilities that rely on extended occupancy to outpatient options that have become the bedrock for all SUD intervention. Words such as “treatment” and “recovery” at one time were synonymous with “inpatient treatment.” But that association has definitely changed.

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Market Trends
Trends Are A Dime A Dozen, High Value Healthcare Companies Are Not

The language of today’s healthcare marketplace is infused with the word “trends” – reimbursement trends, trends in innovation, managed care trends, and trends of EBITDA multiples for acquisitions in healthcare. We seemingly cannot escape the self-delusion of perfect timing and prediction.

Leaders of the most successful healthcare companies recognize that trends are important. However, they primarily focus on building sustainable value that is relatively independent of trends, by consistently delivering the kind of results that partners, investors, and buyers appreciate.

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Exit Planning
7 Ways Buyers Can Easily Blow Healthcare Transactions

Much of the literature on failed healthcare transactions focuses on seller-related problems – unrealistic expectations, poor margins, a troubled market, and even fraudulent financial reporting. But it takes two to tango and buyers have their role. Sometimes, they lack other-awareness in the following ways.

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Healthcare Sectors, Market Trends
6 Directions For The New Addictions Rx Marketplace

Nearly 50 years ago, Anais Nin wrote that “we don’t see things as they are, we see things as we are.” Her observation about human projection fits well for the addictions treatment market where we are in the midst of continuing evolution. One of the most significant changes is the shift away from large inpatient facilities that rely on extended occupancy to outpatient options that, until recently, were believed to be the bedrock of all addictions intervention. In fact, words like “treatment” and “recovery” were sometimes synonymous with “inpatient treatment.”

Today’s shift toward outpatient treatment is part of a new healthcare vision and is based on the following.

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Healthcare Sectors, Market Trends
7 Faces Of The Coming I/DD Revolution

During the past 50 years, we have experienced profound change in the services and support for people with intellectual/developmental disabilities. Many large, costly, and dehumanizing institutions have closed, while community supports promoting inclusion and self-direction have blossomed across the country. As a result, people with disabilities are living longer than ever, with a higher quality of life. There has been great progress, yet there is still ample room to improve.

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Market Trends
5 Mind-Blowing Scenarios Of The New Healthcare Marketplace

Amid the unknown of public healthcare financing, our new healthcare marketplace is rapidly evolving. This transformation is fueled by several interrelated developments.

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