Kaufman Hall’s Post

#healthcareleaders, #healthcareinnovators, #medtech- This is exciting news from Vizient, Inc that could have far reaching impacts not only for healthcare providers. The potential to provide differentiated data assets/consulting opportunities for healthcare suppliers to identify new ways to partner to improve healthcare! #futurefocused

In Q1, Amplifon acquired 75 additional locations across North America, growing their portfolioto 400 MiracleEar clinics in the US. On top of this, their CEO announced: “we are accelerating the pace of our bolt-on acquisitions” In their recent update. Their mass consolidation of practices suggests they’re only just starting, and given the dominance that private practice has on unit sales, their #1 objective is likely to wrestle control. If you own a private practice, here’s 3 things to consider to play David vs Goliath. #1 - have a very sharp value proposition - if you’re hiding behind the widget and tell the story that you’re a great place to buy “hearing aids” - then you’re running a dangerous apples vs apples comparison where they have the economies of scale that you do not. #2 - don’t get caught in the race to the bottom - when markets become competitive, the natural tendency is to lower your prices. It’s a trap, instead focus on using the extra margin on experience and messaging. #3 - you won’t out-market them, they’re marketing teams payroll is likely more than your overall revenue. Instead, market your strengths that they cannot touch (local, community focused, expertise, long-standing local reputation, independence #hearingcare #audiology (Written on my phone - and Apple Intelligence isn’t yet launched to re-write, proof and perfect it for me 😂)

Who polices hospitals merging across markets? States give different answers. St. Louis’ largest health system, BJC HealthCare, plans to merge with Kansas City’s second-largest, Saint Luke’s Health System, uniting more than 28 hospitals on both sides of Missouri by the end of this year. The merger, which would span markets 250 miles apart and include facilities in neighboring Kansas and Illinois, is just one of the latest in a quickly consolidating hospital industry. Cross-market deals accounted for more than half of all hospital mergers and acquisitions during the last decade, according to a paper from experts on antitrust law. Today, nearly 60% of health systems operate multiple hospitals in different geographic markets. Not only are such deals more common, they can increase costs for patients. Merged hospitals in the same state but in different markets raised prices as much as 10% compared with other hospitals, researchers found after analyzing past deals. A separate study found stand-alone hospitals raised prices 17% after they were acquired by a hospital company in another market. Read more in the following 9/28/2023 link:

Earlier this week, I presented to the Colliers Healthcare | U.S. team on trends we are seeing in the health care industry. My talking points are below. 1.     Inflation is beginning to cool off, which could result in lower interest rates. The closer inflation gets to 2%, the more likely the Fed will cut interest rates later this year and hopefully throughout 2025. Lower interest rates will drive transaction activity. 2.     State legislators and state attorneys general are looking for ways to regulate the acquisition of health care facilities and health care companies by private equity firms. California and Minnesota have proposed legislation on this point. 3.     Retailers are beginning to pull the plug on retail health clinics. Dollar General, Walgreens/VillageMD and Walmart have terminated or reduced the scope of their retail health initiatives. The economics either don’t work or the juice isn’t worth the squeeze. Retail pharmacy giants are also pruning their real estate portfolios. Mail order pharmacy services are having an impact on the retail pharmacy business. 4.     The FTC and certain state agencies are looking for ways to outlaw non-compete agreements and impose greater restrictions on corporate mergers, including health care mergers. 5.     Certificate of need reform continues to make headlines. An interesting challenge to Iowa’s CON law is making its way through the courts. Kentucky has an open forum scheduled this week to get feedback on its CON law. GA, NC, SC, and TN have made changes to their CON laws. 6.     Joint ventures are the future of health care. A number of specialty health care facilities (ASCs, behavioral hospitals, cancer centers, IRFs, etc.) are being developed across the country right now. Many are operated/leased by joint venture entities made up of two or more providers. 7.     Independent physician groups (ortho, neuro, eye and primary care docs) are still developing new MOBs. These projects are often smaller and involve the physician groups taking an ownership interest in the project. 8.     Health systems that occupy 75% or more of core MOBs are looking for ways to buy the assets in order to reduce their operating costs. I want to thank Kelly Wiencek and Shawn Janus for the opportunity to present!

🎉 Our latest blog post, Strategic Acquisitions: Revitalizing Distressed Hospitals for Economic and Community Health, is LIVE! 🌟 #AxysPointInsights   Recently, we had the privilege of collaborating with a healthcare management group on the successful turnaround of distressed hospitals. This experience showcased the viability and immense potential of such strategic investments. This blog looks into the potential of acquiring distressed hospitals in a post-pandemic world. As financial pressures mount, these strategic acquisitions emerge as a promising avenue for economic value and enhancing community health.    📈 Economic Rationale and Financial Opportunities:  We explore the strategic benefits of lower acquisition costs, which allow for significant investments in critical improvements and technology upgrades, paving the way for increased operational efficiencies and profitability.   💡 Technological Advancements:  Investing in cutting-edge technology and infrastructure revitalizes the day-to-day operations of hospitals, improving service quality and expanding patient base, which in turn drives revenue growth and establishes a competitive edge in the healthcare market.   🔄 Operational Efficiencies and Streamlining:  Our post details how streamlining processes and adopting lean principles can drastically cut costs and enhance service delivery, ultimately benefiting patient care and hospital performance.   🔍 Strategic Financial Analysis:  We emphasize the importance of rigorous financial analysis before acquisitions to ensure informed decision-making and effective turnaround strategies. #HealthcareInnovation #HospitalManagement #StrategicAcquisitions #CommunityHealth #AxysPointConsulting

🤝 Breaking Down the Massive Henry Ford-Ascension JV 🗣️ Henry Ford Health and Ascension Michigan are planning to merge, creating a $10.5B healthcare juggernaut. This consolidation is not just a sign of the times, but a significant movement in the healthcare landscape of Michigan and potentially beyond. 🔎 With the healthcare landscape continually transforming, we're seeing leading entities opt for strength through collaboration. The implications of this JV are profound. The consolidation stands poised to redefine patient care paradigms, workforce structures, and Michigan's healthcare market dynamics. 📈 The unified system will comprise over 33,000 employees, 17 hospitals, and upwards of 200 outpatient centers, as detailed by @ronsouthwick . Such scale offers potential for streamlined operations and increased bargaining power with suppliers and payers 🔮 Consolidation trends underscore a deeper narrative within healthcare. As the shift from fee-for-service to value-based care intensifies, collaborations like this could be the blueprint for delivering holistic, coordinated care. Additionally, in a bid for financial robustness post-pandemic, and with regulatory landscapes nudging for shared compliance responsibilities, we might witness more of these large-scale unions. 🚀 Such mergers open up numerous investment and partnership opportunities. The synergies could lead to streamlining of operations, tech integrations, and new avenues for innovative healthcare solutions. 🌎 What do you think will be the most significant impact of this JV on Michigan's healthcare landscape. Could this be the precursor for a nationwide trend of similar mergers? #healthcare #mergers #jointventure #privateequity

Today in #𝗠𝗲𝗿𝗴𝗲𝗿𝘀𝗮𝗻𝗱𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻𝘀 𝗠𝗼𝗻𝗱𝗮𝘆, I'm revealing why both #PEfirms and #portfolio company leaders are in "𝗮𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 𝗮𝗳𝘁𝗲𝗿𝘀𝗵𝗼��𝗸"... and can lead to longer than desired holding periods (over 5 years) for PE firms. A client of mine in the Ed Tech space was approached by a couple of PE firms as her business approached the $1mm revenue mark. While this is rather unusual, her business reveals a lot of growth potential and is in a desirable sector. However, she resisted for two reasons: 1. Her business valuation will be much stronger in a couple of years. 2. She recognized the change in status and income post acquisition would not be desirable once the initial payout was made. PE Hub, for example, reports this being a big factor in the healthcare, and more specifically, dental practice, sector. “The dynamic with physician practice management deals is, when physicians sell to a PE manager, there is a transition of economic models where they go from owners to employees, and now there is a need to incentivize them to stay.” “For practice owners, when they first sell to PE, there is a big payout up front, but the trade-off is after that they are salaried and making less annually than they did as owners, at least at first.” According to a few of my founder/business owner friends, they report feeling similarly. This is why peers and professional advisors like fractional execs experienced in M&A and portfolio companies can be so helpful to business owners in truly understanding the realities of being acquired by PE firms. Not all PE firms are created equal. Some will be more operationally involved in incentivizing the leadership to stay vs. the rip and replace approach PE has a reputation for. On the other side of the coin are the customers and clients of the business. They too feel "acquisition aftershock." When a business like a dental practice or an accounting firm is acquired by PE, and the mentality suddenly is significantly less around customer relationships and service and more on cost cutting, a strong customer base can slip away very quickly, further causing a delay in a business exit for PE. #VistageLosAngeles #postacquisition #fractionalexecutives

Will health system M&A soar or dive? “I believe that over the next three years, the landscape of acquisitions, divestitures and joint ventures will continue to reshape the healthcare industry," said Dennis Sunderman, system director of HR M&A, non-employee and provider services at CommonSpirit Health, told Becker's. “Current and proposed legislation, the continued evolution of ownership groups, nonprofit, for profit, and private equity, and the drive to hire and retain exceptionally talented teams, will lead to new innovations and an enhanced focus on the associates affected by the transaction." (Full article below): #mergersandacquisitions #healthcareindustry

One aspect of private practice that I rarely see discussed is this: A physician's default behavior has NEVER been to build a private practice from the ground up. Private practices have ALWAYS been bought and sold. There was never a 1:1 ratio between the number of new practices built and the number of practices purchased each year. The new physician would either purchase or join an existing practice and modernize it with new technology, implement more efficient operations, and maintain its market share. Because of hospital and private equity mergers and acquisitions, the pipeline to private practice ownership was severed. The practices that physicians used to purchase or buy into were no longer available because they had been sold and acquired by corporate entities, which ultimately shifted the physician market from being primarily self-employed to where we are today, where the majority of physicians are employed by those corporate entities that consolidated the market 20 years ago. When you zoom out and look at the problem of private practice, it's clearly an infrastructure problem, not a problem of motivation or market TAM. Physicians are highly motivated to be independent. They are unable to do so due to a lack of infrastructure. No tech solution has productized the end-to-end process of setting up a private practice, and I'm not just talking about practice management or EHRs. Which do absolutely nothing to promote the creation of new practices. I'm referring to incorporation, finances, finding an office to rent or buy, locating a practice that is willing to sell, and obtaining a loan to purchase the practice or build a new one. This is infrastructure. The absence of infrastructure that facilitates practice independence limits physicians' ability to build practices from the ground up. This limits access to care (e.g. rural and inner city communities), and drives up costs due to consolidation and a lack of local independently owned practice options. At Ease, this is the problem we are solving and the infrastructure we are building to support the next generation of private practice owners. ----- Hi, I'm Dr. Mario Amaro, Founder and CEO Ease, and I talk about all things starting, running, and growing a private practice with AI. Follow me, if you are planning to start one or are currently figuring out creative ways to grow one. #PrivatePractice #SelfEmployment #HealthcareOnLinkedin #HeyEase #IndependentTogether

When a hospital acquires another hospital in the same market, federal regulators have challenged this type of merger, knowing that stifling the competition could negatively impact patient care. But when a hospital acquires another hospital in another market, federal regulators have not challenged this type of merger. This article walks through 3 hospitals who acquired hospitals in a different market, and what the outcomes were. #healthcare #mergersandacquisitions