Literature Review

Martis Capital rumored to purchase Three Oaks Hospice’s in $150m deal Hospice News; by Holly Vossel; 10/18/24 The private equity firm Martis Capital may soon acquire Dallas-based Three Oaks Hospice for a price tag ranging from $150 million to $160 million. Rumors of the potential sale appeared today in an Axios report, in which unnamed sources reportedly confirmed the deal. The Nashville-based investment and management company Petra Capital currently owns Three Oaks Hospice, which reportedly generates between $10 and $13 million in EBITDA, Axios indicated. Rumors that the hospice was considering a potential sale were first reported last month by the website Ion Analytics. The private-equity backed company provides hospice, palliative care and bereavement services across 28 locations in seven states. 

Minnesota-based Saint Therese to acquire St. Mary of the Woods Senior Community in Avon, Ohio AP; by Barb Hemberger; 10/15/24 Continuing to build its footprint in the Midwest, Saint Therese, an aging care and services leader based in the Twin Cities, today announced it will acquire St. Mary of the Woods in Avon, Ohio, near Cleveland. The transition of ownership is expected to occur on December 1, 2024. This is the second acquisition for Saint Therese in two years and the second in the region, following the purchase last year of IHM Senior Living Community in Monroe, Michigan. ... Saint Therese at St. Odilia in Shoreview specializes in hospice and palliative care. Saint Therese is a nonprofit, 501(c)(3) senior care organization. 

FTC finalizes premerger rule: 9 things to know Becker's Hospital Review; by Alan Condon; 10/10/24 The Federal Trade Commission voted 5-0 to finalize changes to premerger notifications under the Hart-Scott-Rodino Act, which requires organizations to report large transactions to the FTC and Justice Department for antitrust review. "Premerger review is a critical task for the antitrust agencies and to do it well, we need information about each deal's potential antitrust risk," Shaoul Sussman, associate director for litigation of the FTC's bureau of competition, said in an Oct. 10 news release. "This rulemaking is a much needed update to address changes in the marketplace that have undermined the agencies' ability to detect and prevent illegal mergers, while at the same time creating a more efficient review process. Nine things to know: [Click on the title's link for this list.]

National Health Investors announces $121.3 million acquisition, largest deal since 2020; pipeline at $305 million McKnights Senior Living; by Lois A. Bowers; 10/10/24 National Health Investors is acquiring a portfolio of 10 assisted living and memory care communities in North Carolina for $121.3 million in what the real estate investment trust says is its largest deal since 2020, the year the COVID-19 pandemic started. The Murfreesboro, TN, REIT announced the transaction Thursday morning in a business update. The properties, which have a combined 522 units, will continue to be managed by Spring Arbor. NHI says that the portfolio bears “no material impact” from Hurricane Helene.

Inside palliative care at Contessa’s Health System joint ventures Hospice News; by Jim Parker; 9/27/24 Contessa, the innovation and high-acuity arm of Amedisys Inc. has made large investments in expanding access to palliative care, particularly through joint ventures with health systems. Amedisys acquired Contessa in 2021 for $250 million. The subsidiary’s specialty is high-acuity care in the home, including hospital-at-home and skilled nursing facility-at-home programs, but in recent years it has also leaned hard into growing its palliative care business. For now, Amedisys shows no signs of slowing down on palliative care. Expanding palliative care relationships and joint venture partnerships is a priority for 2024, the Louisiana-based home health and hospice provider indicated in a filing with the U.S. Securities and Exchange Commission (SEC) earlier this year. 

Hospital mergers and health care price increases: A primer for reporters Association of Health Care Journalists (AHCG); by AHCG Staff; 9/24/24 Hospital mergers — market consolidation — can lead to health care price increases of anywhere from 3% to 65%, according to a 2022 RAND Corporation review. The FTC’s director of the Bureau of Economics has said hospitals that merge may charge 40% to 50% more than if they hadn’t merged. Mergers can also result in layoffs and lower tax revenues and have a negative impact on patient care by reducing access to some health care services. With so much research confirming negative effects and as health care prices continue to rise, what — if anything — can be done to slow market consolidation and/or reduce the harms to patients and local economies?

State scrutiny pf UnitedHealth Group-Amedisys deal pushes timeline back further Home Health Care News; by Audrie Martin; 9/19/24 UnitedHealth Group’s acquisition of Amedisys is still pending. That could be due to a variety of factors, but one is clear: the Oregon Health Authority’s (OHA) ongoing review, which is expected to continue until at least the end of November. OHA’s Health Care Market Oversight (HCMO) program reviews health care business deals to ensure they do not harm the state’s citizens or communities. In July, both UnitedHealth Group and Amedisys submitted responses to the OHA’s request for information. The authority is still seeking public comments on this matter. In addition to the issue in Oregon, the deal has faced scrutiny from federal antitrust regulators, including the U.S. Department of Justice (DOJ).

Private Equity's impact on hospice care: The good, the bad, and the ugly of private equity TCN Talks - Teleios Collaborative Network; by Chris Comeaux; 9/18/24 In this episode, Private Equity's Impact on Hospice Care, The Good, the Bad, and Ugly of Private Equity, Chris interviews Laura Katz Olson, a professor of political science at Lehigh University.  It’s a fascinating discussion based on Laura’s book Ethically Challenged. During their conversation, they delve into the impact of private equity in the healthcare industry.  Private equity firms prioritize making oversized profits and have a short-term focus, often selling companies within six years, relying heavily on debt financing and putting the burden of servicing the debt on the acquired companies.  Leaving a company worse than when the started is the opposite of what leadership is supposed to do for any organization, especially one with such a critical mission. Editor's note: TCN /  Teleios Collaborative Network sponsors our newsletter. 

Antitrust lessons for healthcare roll-ups – and everyone else Competition Policy International - CPI Columns US & Canada; by Lauren F. Dayton & Swara Saraiya; 9/12/24 ... The practice described in the U.S. Anesthesia Partners suit, known as a “roll-up,” is a common strategy employed by private equity firms through which smaller businesses in adjacent markets are acquired and consolidated. Large healthcare networks acquire smaller practices for similar reasons. That consolidation enables companies to build a greater presence, operate more efficiently, and can allow them to attract better talent. But that same consolidation can also create the risk of anticompetitive effects. The FTC’s suit is noteworthy because federal competition regulators have historically focused on the companies themselves, not their financial sponsors. The case is in step with statements by competition regulators about increased scrutiny of the healthcare industry, and of acquisitions by private equity firms, in particular. ...

Mercy acquires Ascension hospital Becker's Hospital Review; by Alan Condon; 9/10/24 St. Louis-based Mercy has acquired Ascension's Via Christi Hospital in Pittsburg, Kan. The acquisition includes the hospital, its locations and related physician practices, but excludes Ascension Living Via Christi Village facilities and operations. The deal officially closed Sept. 1. Mercy, a 45-hospital system, now has three hospitals in Kansas: Mercy Hospital Pittsburg, Mercy Hospital Columbus and Mercy Specialty Hospital-Southeast Kansas in Galena. It also operates two primary care clinics in Pittsburg. "Whenever Mercy joins a new community, we want to hear from that community about what we can do to improve care and access for patients," Jeremy Drinkwitz, president of Mercy Joplin communities, said in a news release. "We want to ensure we are providing the right care where it's needed so patients can stay close to home. We'll be looking for the best ways to grow the already great services in place." 

Enhabit foresees smooth sailing on near-term hospice growth Hospice News; by Jim Parker; 9/5/24 Enhabit Inc. expects consistent hospice growth even as it contends with payer and reimbursement headwinds for its home health business. The home health and hospice provider recently terminated its home health contract with the Medicare Advantage payer UnitedHealthcare, a subsidiary of UnitedHealth Group, citing nine months of unsuccessful negotiations. In addition, Enhabit and the rest of the home health industry are facing a potential 1.7% rate cut from the U.S. Centers for Medicare & Medicaid Innovation’s proposed 2025 payment rule. Meanwhile, Enhabit’s hospice segment continues to grow sequentially.

Healthcare private equity transactions under scrutiny: Midyear review Healthcare Business Today; by Editorial Team; 9/4/24 Highlights

Private equity ownership of US hospice centers boomed in recent years – studyThe Guardian; by Jessica Glenza; 9/3/24Investors spent about $1tn buying healthcare facilities over last decade, leading to reports of worsening patient care. Private equity investors are increasingly buying up hospice centers – healthcare facilities meant to focus on pain relief and emotional support for people near the end of their lives. The new study was published in the journal Health Affairs [Private equity acquisitions of hospices are increasing; Ownership remains opaque, by Melissa D. Aldridge, Lauren J. Hunt, Zelle Halloran, and Krista L. Harrison] and provides more evidence of how private equity have acquired firms using often sophisticated and opaque ownership structures. Although for-profit ownership is not new in US healthcare, the surge of private equity ownership is. Such investment groups have spent an estimated $1tn over the last decade, buying up hospitals and doctors’ offices.