Literature Review

Report adds to scrutiny of private equity-owned hospitalsModern Healthcare, by Mari Devereaux; 1/16/24Lifepoint Health and ScionHealth's ownership by Apollo Global Management is the focus of a report by a nonprofit formed to hold private equity buyers accountable for the impact their acquisitions have on services and communities.

PE firms adapting hospice 'roll-up' strategies Hospice News, by Jim Parker; 1/8/24Private equity firms in the hospice space are adapting their “roll-up” strategies as economic uncertainties persist. Roll ups are a common approach to private equity investment. This occurs when a firm buys a larger platform company and then gradually acquires smaller organizations to foster growth.

To affiliate or acquire: Trends in nonprofit hospice consolidationHospice News, by Jim Parker; 1/5/24Recent years have seen an uptick in consolidation activity among nonprofits in the hospice space. Increasingly, nonprofit s are pursuing acquisitions and affiliations, as well as forming regional collaboratives. To achieve these kinds of growth, hospices must consider whether they should affiliate or buy another company outright. Each approach comes with benefits and risks.

The Wall Street Journal: Exclusive: Cigna nears deal to offload Medicare businessThe Wall Street Journal, by Laura Cooper, Anna Wilde Mathews and Lauren Thomas; 1/3/24Cigna is in advanced talks to sell its Medicare business in an about-face for the health-insurance giant, which had been expanding its footprint in the fast-growing sector. Cigna, which has been running an auction for the business, known as Medicare Advantage, is now in exclusive talks to sell it to Health Care Service Corp. for between $3 billion and $4 billion, according to people familiar with the matter. Editor's Note: Access to the full article requires a subscription to The Wall Street Journal

West Monroe’s 3 healthcare outlooks for 2024: AI, cost pressures, dealmakingMedCityNews, by Marissa Plescia; 12/29/23 In a recent report, consulting firm West Monroe laid out three trends for the healthcare industry to watch out for:

Serious Medical Errors Rose After Private Equity Firms Bought HospitalsNew York TimesDecember 26, 2023The rate of serious medical complications increased in hospitals after they were purchased by private equity investment firms, according to a major study of the effects of such acquisitions on patient care in recent years. The study, published in JAMA on Tuesday, found that, in the three years after a private equity fund bought a hospital, adverse events including surgical infections and bed sores rose by 25 percent among Medicare patients when compared with similar hospitals that were not bought by such investors. The researchers reported a nearly 38 percent increase in central line infections, a dangerous kind of infection that medical authorities say should never happen, and a 27 percent increase in falls by patients while staying in the hospital. 

Hospital merger activity to increase in 2024Modern HealthcareDecember 26, 2023Hospital merger and acquisition activity is expected to increase next year as hospitals manage financial pressure, competitors combine and insurers grow. ... The number of announced hospital deals through the third quarter rose by more than 50%, to 53 proposed transactions from 35 last year, according to data from consultancy Kaufman Hall. Deal activity was particularly pronounced among midsized health systems ranging from $1 billion to $5 billion in annual revenue. ... Nearly 40% of the 18 proposed hospital deals announced in the third quarter were driven by financial distress, according to Kaufman Hall. 

Froedtert, ThedaCare to launch combined system Jan. 1Becker’s Hospital ReviewDecember 19, 2023Milwaukee-based Froedtert and Neenah, Wis.-based ThedaCare have finalized their merger agreement and will launch as a combined 18-hospital system Jan. 1.

Brandywine Living acquired by Retirement Unlimited Inc.McKnight’s Senior LivingDecember 20, 2023Mt. Laurel, NJ-based Brandywine Living’s senior living management platform is being acquired by Roanoke, VA-based Retirement Unlimited Inc., RUI announced Wednesday. Following the transaction, the combined company will consist of 59 communities with more than 6,739 independent living, assisted living and memory care units. 

ProPublica Adds Ownership Information to Our Nursing Home DatabasePro PublicaDecember 20, 2023The quality of care that residents receive in a nursing home can be profoundly affected by who owns it, studies have shown. It’s not always clear who should be held accountable, though: Many nursing homes are owned by companies that are owned by other companies, obscuring who has the ultimate decision-making power. ... To help navigate the confusing world of nursing home ownership, ProPublica’s Nursing Home Inspect now publishes detailed ownership information for facilities and an upgraded search to help you sift through the information. 

Jefferson, Lehigh Valley Health to merge in 2024Modern HealthcareDecember 19, 2023Jefferson and Lehigh Valley Health Network plan to merge next year, creating a system of 30 hospitals and more than 700 care sites in Pennsylvania and New Jersey. The two health systems said Tuesday they have signed a non-binding letter of intent to merge and plan to sign a definitive agreement and close the transaction sometime in 2024, pending regulatory approval. 

A Lukewarm Home Health, Hospice Dealmaking Year Comes To A CloseHome Health Care NewsDecember 19, 2023Following consecutive record years for health care transactions, 2023 was a comparatively lukewarm time for home health and hospice dealmaking activity. That’s according to a recent report from PwC. Specifically, there were 95 home health and hospice deals in the 12 months examined by PwC, which ended on Nov. 15., compared to 114 during the same period last year. The deals were worth $4.7 billion. ... PwC experts believe that M&A will likely be a key growth and profit driver next year.

Private Equity—The Metastasizing Disease Threatening Health CareHealth AffairsDecember 18, 2023In 2010, when purchasing Prospect Medical Holdings, the private equity firm Leonard Green and Partners made numerous lofty promises to state regulators around expanding services, capital investments, and modernization. They assured regulators they would not only maintain hospitals but would increase the quality of care. Over the course of its 10-year ownership, Leonard Green broke many of the promises made to regulators.Editor's Note: This article articulates some of the challenges that can occur when private equity moves into the healthcare space.