The Health Care M&A Monthly: The Market for Medical Groups -
Is It 1997 All Over Again?
Physician medical groups are back on the mergers and acquisitions radar. Last year, 68 acquisitions of doctors’ practices were made public, the most prominent being the $4.2 billion takeover of HealthCare Partners by DaVita, Inc. (NYSE: DVA) in May. While that deal volume was down significantly from the 108 deals announced in this sector in 2011, health care industry observers agree that the pace of consolidation is accelerating as the deadline for implementation of the Affordable Care Act looms.
The January 1, 2014 deadline is making for some strange bedfellows, and reminding more than a few investors of a similar boom in physician medical group acquisitions, back in the 1990s.
“You’ve got insurance companies trying to build out networks of providers so they can try to control costs. You’ve got providers trying to understand better risk. You have both folks trying to partner with physicians, because physicians ultimately control costs,” said Charles Ditkoff, senior advisor to Marwood Group and Alvarez & Marsal, speaking at the AGC Healthcare Conference in January........Want to read more? Click here for a free trial to The Health Care M&A Information Source and download the current issue today