Literature Review

Protecting patients and society in an era of private equity provider ownership: Challenges and opportunities for policyHealth Affairs; by Christopher Cai, Zirui Song; 5/24Private equity (PE) acquisitions in health care delivery nearly tripled from 2010 to 2020. Despite concerns around clinical and economic implications, policy responses have remained limited. We discuss the US policy landscape around PE ownership, using policies in the European Union for comparison. We present four domains in which policy can be strengthened.

Why Optum thrives where other companies failed Becker's ASC Review; by Patsy Newitt; 8/16/24 UnitedHealth Group's Optum, parent company of Deerfield, Ill.-based ASC chain SCA Health, has seen massive growth in the last few years as other big healthcare networks face obstacles in reaching large-scale profitability. ... A key to Optum's success is its affiliation with a large insurance business. The Journal pointed to the "several financial incentives for an insurer to own a health provider, including that it pays itself." ... And Optum keeps growing. The company spent $31 billion on acquisitions in the last two years, The Oregonian reported May 13. ... UnitedHealth Group is facing scrutiny regarding the Change Healthcare ransomware attack in February. The attack delayed payment and claims processing for healthcare providers around the country, as UnitedHealth subsidiary Change Healthcare handles an estimated one in three healthcare transactions.

4 health systems shrinking their hospital portfolios Becker's Hospital Review; by Alan Condon; 8/14/24 Merger and acquisition activity is picking up steam this year after a decline in deal volume during the pandemic, with some large health systems reorganizing their portfolios and offloading hospitals in various markets. Four health systems that have sold or plan to sell multiple hospitals this year:

The billion-dollar DFW healthcare company you haven’t heard of D Magazine; by Will Maddox; 8/16/24 Addus HomeCare has had a busy year. The publicly traded home care, home health, and hospice company employs more than 30,000 people across 214 locations and 22 states, providing care to nearly 50,000 patients. This year, the company has quietly cleared nearly $400 million in acquisitions as it ramps up its presence in Texas and around the country.

On-demand talent can push key objectives forward amid an increase in M&A deals Forbes; by Sunny Ackerman; 8/14/24 As we settle into the latter half of 2024, mergers and acquisitions and other business transformation initiatives are likely to be top of mind for many business leaders. Consider EY’s May 2024 “Deal Barometer,” which predicts that in the United States, “corporate M&A deal volume will increase 20%.” The firm also estimated that M&A deal volume will increase by 16% in the private equity world. ... Given the projected increase in M&A deal activity, I expect to see an increased need for on-demand talent in 2024 and beyond to push key objectives forward, executing strategic goals to close deals and facilitate seamless transitions post-closure. ...

Hospital assets before and after private equity acquisitionJAMA; by Elizabeth Schrier, Hope E M Schwartz, David U Himmelstein, Adam Gaffney, Danny McCormick, Samuel L Dickman, Steffie Woolhandler; 7/24Private equity firms spent $505 billion on health care acquisitions between 2018 and 2023. Financial infusions may augment resources for care. However, firms have sometimes sold acquired hospitals’ land and buildings, repaying investors with proceeds and burdening hospitals with rent payments for facilities they once owned. We assessed changes in hospitals’ capital assets after private equity acquisition. After private equity acquisition, hospital assets decreased by 24% relative to that of controls during 2 years. Private equity acquisitions appear to have depleted, rather than augmented, hospital assets. Although funds from asset drawdowns might be redeployed to enhance care or efficiency, previous studies suggest such effects may not occur.

R1 RCM to be acquired by TowerBrook and Clayton, Dubilier & Rice for $8.9 BillionTowerbrook press release; 8/1/24R1 RCM Inc. (NASDAQ: RCM) (“R1” or the “Company”), a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers, today announced that it has entered into a definitive agreement to be acquired by investment funds affiliated with TowerBrook Capital Partners and Clayton, Dubilier & Rice, in an all-cash transaction with an enterprise value of approximately $8.9 billion.Publisher's note: Both TowerBrook and Clayton, Dubilier & Rice are active in the hospice private equity space.

New proposed federal legislation takes aim at concerns regarding perceived “looting” of health care systems by private equity investors JDSupra - Epstein Becker Green; by Melissa Jampol, Enrique Miranda, Kathleen Premo; 7/26/24On June 11, 2024, U.S. Senators Ed Markey and Elizabeth Warren from Massachusetts, introduced proposed legislation titled The Corporate Crimes Against Health Care Act (“CCAHCA”), aimed at addressing a perceived “looting” of health care systems by for profit private equity investors. According to Sen. Warren, the bill was introduced to “root out corporate greed and private equity abuse in the health care system,” “prevent exploitative private equity practices,” and to specifically ensure that actions such as “looting” do not happen again by addressing trigger events and targeting real estate investment trusts. ... Finally, the CCAHCA would require health care entities, including, but not limited to:  ... a hospice program, a home health agency, ... to publicly report to the Secretary of Health and Human Services on an annual basis: (i) transactions entered into ... [Click on the title's link to continue reading.]

Humana to takeover 23 Walmart Health locations with new CenterWell senior care clinics. Here's where Louisville Courier Journal; by Olivia Evans; 7/25/24 Humana, the Louisville-based health insurance giant, has announced its health care services branch of the company, CenterWell, will open 23 senior primary care centers in Walmart Supercenters. The centers will operate under the CenterWell Senior Primary Care and Conviva Care Centers brand names, according to a press release from Humana.

Senior living and care on track to set mergers and acquisitions record McKnights Senior Living; by Kathleen Steele Gaivin; 7/18/24 Mergers and acquisitions involving senior living communities and skilled nursing facilities set a new quarterly record of 183 publicly announced transactions in the second quarter, and when annualized, the sector is on track to set a new yearly record as well. That’s according to data released this week by LevinPro LTC. The number of mergers and transactions in the second quarter was 21% higher than the 151 transactions recorded in the first quarter and 49% higher than the 123 deals in the second quarter of 2023. 

Palliative provider Thyme Care secures $95M in funding round Hospice News; by Jim Parker; 7/17/24 The oncology-focused value-based enabler Thyme Care has completed a $95 million funding round that includes $55 million in equity funding. The company offers palliative care in addition to other services. In May, Thyme Care launched a new palliative care telehealth offering, branded as Enhanced Supportive Care. Thyme Care will use the new infusion of investment dollars to expand to new geographies, build new partnerships with oncologists, primary care practices and health plans, according to a press release.

Primary, palliative provider HarmonyCares gains $200M investment Hospice News; by Jim Parker; 7/9/24 The home-based care provider HarmonyCares, a leading provider of value-based in-home has secured $200 million in a new funding round. HarmonyCares offers palliative care, home-based primary care, home health, hospice, radiology and other services to more than 70,000 patients in 15 states through value-based partnerships with Medicare Advantage plans and Accountable Care Organizations. ... The company plans to use the infusion of capital to expand to new geographies and develop new technologies designed to improve clinical outcomes and patient satisfaction, according to a statement. The funding round was led by General Catalyst, McKesson Ventures and an unnamed large national payer. Other participants included K2 HealthVentures, Rubicon Founders, Valtruis, HLM Capital and Oak HC/FT.

Why one hospital merger stands out among the rest Becker's Hospital Review; by Andrew Cass; 7/3/24 Two rival hospitals in Terre Haute, Ind., seeking to merge are the first to test the state's certificate of public advantage (COPA) law, The Washington Post reported July 3. Five things to know: