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Top Takeaways | 2023 PPM-ASC Symposium | Specialty Spotlight: Urology

by McDermott Will & Emery | Jul 11, 2023 | PPM/ASC

In this session, the panelists discussed the latest trends and unique dealmaking considerations impacting the urology industry.

Session panelists included:

Kevin Palamara, Managing Director, Provident Healthcare Partners
Mitchell Hollander, MD, Chief Executive Officer, Michigan Institute of Urology
Jitesh Patel, MD, President & Chief Executive Officer
Moderator: Joseph Parise | Partner, McDermott Will & Emery

Top takeaways included:

Value-based care opportunities exist in the urology space, including around sub-capitation models and episodic reimbursement; however, access to and collaboration with payors is a critical component to ensure those opportunities are successful. Platforms and independent practices can work with payors and managed care organizations to ensure alignment on appropriate reimbursement rates to create better outcomes, quality and access—all at lower cost. To date, these models have not been broadly implemented, but operators have identified managed care as an area for potential growth.
Competition with hospitals and employed urology models are significant challenges in the industry and with respect to developing ancillaries. Generating income repair for physicians and ensuring alignment among the stakeholders are key components to countering competition and developing successful urology platforms.
It is expected that over the next 10 years there will be a significant shortage of urologists, as the number of retiring urologists continues to exceed the number of new urologists entering the market. Industry participants need to prepare for this impending shortage of urologists by continuing to develop unique staffing models, creating programs to attract and retain talent, and leveraging advanced practice practitioners (e.g., nurse practitioners [...]

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Top Takeaways | Specialty Spotlight: Women’s Health and Fertility

by McDermott Will & Emery | Jun 27, 2023 | PPM/ASC

In this session, Brian Hall, a partner in McDermott’s Healthcare practice group, moderated a panel to discuss the opportunities for growth and investment in the women’s health and fertility space.

Session panelists included:

Andrew Colbert, Senior Managing Director, Ziegler
Eleanor Harte, Chief Operating Officer, Colorado Center for Reproductive Medicine
Erica Pham, General Counsel, Maven Clinic
Cara Reymann, Chief Executive Officer, Fertilitas
Maxine Winston, Interim Chief Development Officer, Axia Women’s Health

Top takeaways included:

The women’s health market continues to be very fragmented, with most obstetrics and gynecology (OB/GYN) and fertility providers practicing as members of small groups. The vast majority of OB/GYN practices are comprised of one to three physicians, while there are approximately 500 fertility clinics total in the United States.
There is a strong value-based care (VBC) opportunity in the women’s health space, with payors looking to partner more with OB/GYNs on bundled payment models.
Investors view women’s health and OB/GYN clinics as an offshoot of primary care, which offers numerous opportunities to leverage OB/GYN services as the epicenter for primary care for women.
Since the US Supreme Court’s decision in Dobbs, overturning Roe v. Wade, the famous phrase “healthcare is local” is being questioned. More employers are now incorporating the ability to travel for care into their insurance coverage offered to employees. It is the first time that companies must rethink how and where they are offering care.
The women’s health space is expected to face a decrease in the number of providers coming [...]

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PPM ASC Symposium 2023 | Washington Outlook: Evolving Federal Policy Impacting Reimbursement, Operations and Deal Strategies

by McDermott Will & Emery | Jun 12, 2023 | PPM/ASC

In this session, panelists discussed the political shifts in Washington that are impacting healthcare reimbursement, operations, and deal strategies, including Centers for Medicare & Medicaid Services (CMS) policies on reimbursement, recent activity regarding non-competes and consolidation, and the end of the COVID-19 public health emergency (PHE).

Session panelists included:

Brian Fortune, President, Farragut Square Group
Deborah Godes, Vice President, McDermott+Consulting
Katharine O’Connor, Partner, McDermott Will & Emery
William Prentice, Chief Executive Officer, Ambulatory Surgery Center Association
Moderator: Eric Zimmerman, Principal, McDermott+Consulting, and Partner, McDermott Will & Emery

Top takeaways included:

Eight years after the passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), CMS continues to make adjustments to calibrate physician reimbursement. As they do so, budget neutrality requirements continue to hamper progress. Providers may have to look to the US Congress to get involved and implement an inflation adjustment factor to the fee schedule.
Ambulatory Surgery Centers (ASCs) may face challenges in obtaining favorable reimbursement as they enter the fifth year of a pilot program in which they have been receiving the same inflation adjustments as hospitals. At the end of the pilot program, it is unclear whether ASC reimbursement will continue to receive the hospital market basket adjustments or go back to Consumer Price Index (CPI) adjustments, which have historically been less favorable than hospital inflation adjustments.
Site neutrality continues to be a hot topic as CMS and Congress looks for ways to minimize incentives to refer patients to one setting over [...]

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PPM ASC Symposium 2023 | State of the PPM Industry: Perspectives from Top CEOs

by McDermott Will & Emery | Jun 12, 2023 | PPM/ASC

During this session, Partner Jerry Sokol moderated a panel in which top CEOs shared their insights on capitalizing on opportunities and overcoming obstacles in the current environment. They discussed the transition to value-based care, the No Surprises Act (NSA), physician alignment and the future of the physician practice management (PPM) deal landscape, among other topics.

Session panelists included:

Bob LaGalia, President & CEO, Unified Women’s Healthcare
James Swift, MD, CEO, Pediatrix Medical Group, Inc.
Corina Tracy, CEO, U.S. Urology Partners
James Weber, MD, CEO, GI Alliance
Rich Whitney, Founder, Chairman & CEO, Radiology Partners

Top takeaways included:

Value-Based Care.
- At this time, industry players are focused on building capabilities to ensure they are ready for the transition to value-based care. Changes to payment programs may take a long time, but using this time to prepare and focus on adding value can help with long-term success.
- One of the biggest challenges platforms face when adopting value-based care models is physician engagement. Strategies for enhancing engagement include aligning economic incentives (while protecting physicians from risk) and investing in the right technology infrastructure and tools to support value-based care delivery.
- Data aggregation and actuarial analysis are critical to success in a value-based environment. Providers and platforms need to understand the historical costs, treatment patterns, and other characteristics of their patient population and carefully assess the financial implications of a value-based care arrangement before making the jump.
- Payors are not always ready for value-based care, even when platforms and providers [...]
  
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Five Reasons You Can’t Miss HPE New York 2021

by McDermott Will & Emery | Sep 29, 2021 | Digital Health, Health M&A, Health Private Equity, Hospitals & Health Systems, Life Sciences, Life Sciences Private Equity, PPM/ASC

McDermott’s signature HPE New York event is right around the corner on October 15, 2021. This year more than ever, it’s a must-attend for private equity investors, healthcare executives, lenders, consultants and leaders across the industry.

Here are the top five reasons you don’t want to miss this exclusive event:

To help you navigate the current market’s unprecedented deal volumes and stiff competition, we’ll equip you with the latest analysis of the hottest investment sectors and game-changing deal strategies.
We’ve gathered the best and brightest minds in healthcare private equity to share their real-world insights into today’s market and the trends shaping tomorrow’s opportunities. Click here to view our roster of elite speakers.
Early risers have an opportunity to start their day right with our bonus Big Bankers Breakfast Discussion, where leading investment bankers will examine the current state of play and the dealmaking outlook for 2022.
This premier event is ultra-convenient. In light of ongoing safety and logistics challenges posed by COVID-19, we’re simplifying matters by streaming this year’s event right to your personal computer or device.
Registration is complimentary. In response to those continued challenges around COVID-19, we’re happy to offer complimentary registration this year and hope many of you are able to join us for this timely slate of sessions.

We look forward to virtually welcoming you to HPE New York in just a couple weeks. Click here to register today.

HPE New York 2020: Healthcare Private Equity Pioneers

by McDermott Will & Emery | Nov 5, 2020 | Health Private Equity, PPM/ASC, Uncategorized

An illustrious group of healthcare private equity pioneers discussed how healthcare investing has evolved from inception to current state and what the future holds. Moderated by Michael Lewis, author of The Big Short, Moneyball, The Blind Side and Liar’s Poker, it featured insights from Senator Bill Frist, MD, founder of Frist Cressey Ventures; Annie Lamont, co-founder and Managing Partner of Oak HC/FT; Curtis Lane, founding partner of WindRose Health Investors; and Ira Coleman, Chairman of McDermott Will & Emery.

Below are the top takeaways for HPE New York 2020 half day session: Healthcare Private Equity Pioneers, click here to access the full webinar.

Access the PDF here .

Investment in healthcare private equity continues to accelerate, even amid disruption. In the past, healthcare made up only a small portion of private equity funds, but pioneers helped make it mainstream. “The amount of infrastructure, commitment and capability focused exclusively on healthcare is becoming commensurate with the size of healthcare relative to the economy,” Mr. Lane said. “I think that’s changed pretty significantly and is continuing to change very quickly.”

One of the most dramatic changes in the field of healthcare private equity since its inception is the ongoing transformation of the healthcare system and the opportunities that transformation has created for entrepreneurs outside of traditional healthcare roles. As virtual health companies and other digital-focused [...]

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Physician Enterprises After COVID-19: Capturing and Assessing Opportunities

by Carolyn Metnick, Dale Van Demark and George Tzanetakos | Aug 25, 2020 | Health M&A, Hospitals & Health Systems, PPM/ASC

Independent physician enterprises continue to experience unprecedented challenges as a result of the ongoing COVID-19 pandemic. These challenges will linger for the foreseeable future and will have lasting impacts on operations and the provision of care. As a result, transactional opportunities have also shifted, and physician enterprises must be prepared to identify and evaluate new opportunities wherever they may occur. Our recent webinar with leaders from Providence St. Joseph Health, SullivanCotter, DMG Physician Organization, Veralon Partners and Golden State Dermatology explores the key challenges facing physician enterprises at this time and what healthcare providers and investors are looking for in transaction partners for today’s healthcare landscape. Click here to listen to the webinar recording and read on for key takeaways from the program.

Independent physician interest in management service organization (MSO) models continues to increase. Historically, independent physician practices have been reluctant to shift certain business and office functions to an external management company. However, due to reimbursement and revenue constraints caused by COVID-19, the economies of scale and other cost savings associated with an MSO model may be more attractive to independent physician practices.
Hospitals and health systems are reevaluating their employed physician practice structures. In particular, hospitals and health systems are reassessing their willingness to tolerate significant losses on their employed physician practices and evaluating whether changes in compensation models, compensation levels or the organizational structure of their employed physician networks can create a more sustainable setting. Some health systems are potentially [...]

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Tips for Conducting Effective Due Diligence in an Auction Process

by Danielle E. Golino | Sep 12, 2019 | Health M&A, Health Private Equity, Hospitals & Health Systems, PPM/ASC

In today’s highly competitive healthcare environment, investors may find themselves in an auction process where they must conduct due diligence pre-exclusivity. With limited time and mounting pressure, it can be difficult to know what issues to prioritize. Here are some practical tips for focusing your due diligence efforts strategically in a pre-exclusivity setting:

Quality of Earnings: Against the backdrop of high valuations, quality of earnings should be a key diligence focus, particularly in the context of high-complexity transactions such as corporate carve-outs, partnerships with corporates and public-private pairings. For example, it is critical to examine the pro forma EBITDA to see if it excludes costs or includes questionable adjustments or add-backs.
Timeline: How competitive is the auction process and when are bids due? Does the buyer plan to conduct a full due diligence review pre-exclusivity, or instead look for big ticket liabilities that have a potential to impact valuation or derail the transaction?
Legal Showstoppers: Keep an eye out for legal showstoppers—issues that go to the core of the business, are not isolated incidents and are not fixable through purchase price adjustments, indemnification, escrow or enhanced compliance measures. For example, referral relationships that are based on illegal arrangements, systemic upcoding, quality of care issues, tenuous relationships with hospital partners, untenable and promised salary increases, a culture of non-compliance, or a retiring physician workforce without adequate succession planning.

As you plan your due diligence, keep in mind [...]

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Tips for Winning Competitive Health Care Auctions

by Bernard Grondin | Jul 18, 2019 | Health Private Equity, PPM/ASC

The current environment for healthcare transactions is fiercely competitive with high prices, tough deal terms and limited time for proper due diligence. In terms of both value and number of deals, 2018 was the biggest year for health care private equity (PE) since the financial crisis. More large cap PE firms are moving into the small and mid-cap space, increasing competition. At the same time, non-health-care entrants are competing with US and international PE, especially in the area of physician practice management and other related health care services.

Faced with this stiff competition, sponsors are getting more creative in their healthcare partnerships, whether that means partnering with management teams on new strategies, partnering with large strategics or even with one another. These innovative collaborations can open up more investable opportunities, including public to privates and secondary trades among sponsors.

Even with these creative new opportunities, submitting a winning bid for a health care services business in a hotly contested auction can be a Herculean task. When outbidding the competition is not an option, here are some tips to help differentiate your offer:

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Strategies for Maximizing Physician Practice Management Investments

by Jerry J. Sokol | May 2, 2019 | PPM/ASC

Don’t miss out! Register today for the 2019 Physician Practice Management & ASC Symposium, May 7-8, Nashville, TN

Private equity continues to fuel robust activity in the physician practice management (PPM) sector. Within the last five to seven years, not only have PPMs within traditional areas of medicine proliferated, but new specialties also have been joining the fray at a rapid clip.

While today’s PPM activity is vigorous, it is markedly more deliberate than the first iteration of these partnerships, which featured a rush of M&A activity but little income repair or ongoing integration, and ended with the dramatic collapse of the single-specialty PPM bubble in the late 1990s.

To ensure that a PPM is viable in today’s environment, consider the following strategies:

Pick the right investment targets. Hallmarks of a sustainable health care business include improved outcomes over time and enhanced patient experiences (e.g., access to clinicians, ease of scheduling appointments).
Focus on compliance. Take a close look at compliance and utilization early in the deal process. While a compliance audit adds up-front cost, it is a fraction of the price of litigation.
Integrate. The 1990s PPM model left physician practices largely independent, with only a loose affiliation under a management agreement. Thorough and carefully planned integration will help you avoid repeating the mistakes of the past.
Align your interests. Make sure that compensation and equity are calibrated to incentivize buy-in and a culture of ownership. Strong physician leadership is far more effective in driving [...]

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