May 21, 2019

May 20, 2019

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Six Trends Impacting Health Care M&A in 2016

From hospital expansions with large insurance deals to physician group consolidation, the continued outlook for health care mergers and acquisitions in 2016 is expected to be rampant. The following six factors will likely be present in the health care M&A landscape in 2016:

  1. Hospital growth. Expect to see more hospital expansion and consolidation as a means of neutralizing the bargaining that power payers have garnered through large insurance deals.

  2. Physician group alignment. Like hospitals, large physician groups are consolidating, exemplified by DaVita Healthcare Partners plan to acquire The Everett Clinic, a 500-physician group.

  3. Hospital merger challenges. The uptick of health care M&A has caught the attention of the Federal Trade Commission (FTC), and it’s not afraid of a challenge.

  4. The impending Advocate/NorthShore merger. Perhaps the best example of #3 above, the Illinois health systems are at odds with the FTC over the current market and how much market share the combined entities would control if the deal comes to fruition.

  5. Physician group mergers examined. Health systems are not they only ones under scrutiny by the FTC. The regulator is also keeping a pulse on physician groups. The concern lies in the combination of hospitals and what is believed to be anti-competitive combinations of physicians.

  6. Private equity investment. Despite the slowdown in the stock market, expect private equity firms to continue to invest in health care, particularly in services lines like dermatology, radiology and anesthesia.

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About this Author

Roger D. Strode, Foley Lardner, health care business transactions lawyer, mergers and acquisitions attorney
Partner

Roger Strode is a partner and health care business lawyer with Foley & Lardner LLP where his practice focuses on health care business transactions, including mergers, acquisitions, corporate restructurings and joint ventures, general corporate matters and health care regulation. His experience includes the representation of institutional health care providers (hospitals, health systems and integrated delivery systems), large physician groups, specialty providers (ASC development organizations), health care private equity firms and industry consultants. Mr. Strode is...

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