Literature Review

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.

Hospice of the Western Reserve Acquires Hospice of North Central Ohio Longview News-Journal, Cleveland, OH; by Hospice of the Western Reserve; 8/1/24 Hospice of the Western Reserve (HWR), a premier provider of hospice and palliative care services in Northern Ohio, has completed its acquisition of Hospice of North Central Ohio (HNCO) effective today. This strategic alliance aims to expand access to high-quality, comprehensive end-of-life care across a broader region. The news follows a February 2024 announcement that the two community-based, nonprofit agencies had entered a management services agreement, allowing HWR to begin a due diligence process in preparation for the full transition. The acquisition comes because of increased competition within the HNCO service area, economic challenges, and a need to stabilize and ultimately grow the organization. 

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.]

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. 

20 massive physician group deals shaping the industry Becker's ASC Review; by Patsy Newitt; 7/12/24  Facing increasing obstacles to access economies of scale, including rising practice costs and decreasing reimbursement, physician groups are increasingly consolidating.  Here are [several of the] 20 physician group deals [listed that have been] shaping the industry since 2022:

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.

Cooper University Health acquires New Jersey system Becker's Hospital Reivew; by Alan Condon; 7/1/24 Cooper University Health Care on July 1 completed the acquisition of  Cape May, NJ-based Cape Regional Health System. As part of the closing, Cape Regional Medical Center has been renamed Cooper University Hospital Cape Regional. The combined health system comprises two hospitals with more than 900 beds, 130 ambulatory sites and almost 11,000 employees, including over 1,000 physicians. It is projected to have revenue exceeding $2.2 billion a year. The transaction unlocks significant growth opportunities, particularly in the outpatient market, as healthcare continues its shift away from inpatient settings, Camden, N.J.-based Cooper CFO Brian Reilly told Becker's. 

Midland Care Connection and VNA KC form innovative partnershipPress release; 7/1/24Topeka, KS - Effective July 1, 2024, the Visiting Nurse Association Kansas City (VNA KC), one of the oldest home health agencies in the nation, will affiliate with Midland Care Connection. This partnership aims to create a more robust regional continuum of care.

Ascension selling spree continues Becker's Hospital CFO Report; by Alan Condon; updated 6/25/24 St. Louis-based Ascension continues to improve its operating performance and aims to ensure long-term sustainability for the health system on the back of a $3 billion operating loss in fiscal year 2023. ... Part of Ascension's turnaround strategy has also revolved around strategic transactions that reorganized its portfolio. The 139-hospital system has offloaded several key assets and hospitals in the last three years, with more deals in the pipeline.  Nine transactions to know: [Click on the title's link for details.]

Risant Health plans to acquire North Carolina system Becker's Hospital Review; by Alan Condon; 6/24/24 Risant Health, a nonprofit formed under Oakland, Calif.-based Kaiser Permanente, has signed a definitive agreement to acquire Greensboro, N.C.-based Cone Health. The news comes less than three months after Risant acquired its first health system, Danville, Pa.-based Geisinger Health. If the transaction closes, Cone Health will operate independently as a regional and community-based health system under Risant, which supports organizations with technology and services to improve outcomes and lower care costs in diverse business models. 

Novant scraps $320M hospital deal with CHS Becker's Hospital Review; by Alan Condon; 6/18/24 Winston-Salem, N.C.-based Novant Health has called off its planned $320 million acquisition of two North Carolina hospitals from Community Health Systems after an appellate court granted the Federal Trade Commission an emergency injunction blocking the deal. In a 2-1 decision, the 4th U.S. Circuit Court of Appeals said it would allow the FTC to prevent the two-hospital acquisition from proceeding until its appeal is resolved. ... The FTC argues that the transaction would "irreversibly consolidate the market for hospital services in the Eastern Lake Norman Area in the northern suburbs of Charlotte."

Revenue pressures driving home care consolidation, private equity’s growing influence, provider group saysMcKnight's Home Care; by Adam Healy; 6/11/24Pressures such as insufficient government reimbursement and rising Medicare Advantage penetration are contributing to consolidation in home care and hospice, LeadingAge told regulators last week in response to a February request for information surrounding healthcare market competition. “Sustainable fee-for-service rates that cover the continually rising costs of delivering care are of critical importance,” LeadingAge said. “Outside revenue pressures such as lower reimbursement rates from managed care plans, reduced units of service through accountable and managed care organizations, and an increasing need to be an organization of a certain size in order to contract with managed care organizations and accountable care organizations are also factors that drive consideration of consolidation options.” One particular concern, LeadingAge noted, is the growing investment in healthcare by private equity firms. Private equity firms have driven a significant share of home care and hospice consolidation in recent years. PE firms had a hand in 35 home health deals, 15 personal care deals and 13 hospice deals last year, according to a recent report. And studies have shown that patients receiving care from PE-owned providers may experience worse health outcomes than patients at nonprofit agencies.

Northrim Horizon completes acquisition of Noble HospiceInvestors Observer; PR Newswire; 6/11/24Northrim Horizon L.P. ("Northrim"), an Arizona -based permanent capital investment firm, today announced its acquisition of Noble Hospice and Palliative Care ("Noble" or the "Company"), a leading provider of hospice services in Arizona. Noble becomes Northrim's fourth acquisition in its broader platform offering a full spectrum of essential home care and hospice services across Arizona.