The Physician Medical Group Market Ramps Up

The Physician Medical Group Market Ramps Up

The Physician Medical Group (PMG) space is consolidating at a torrid pace, and the pace won’t slacken in 2018. Last year, deals for physician practices hit a record in the 21st century with 166 transactions, up 27% over the previous year’s 131 transactions. The momentum is indeed continuing into 2018, with eight more acquisitions announced in the first two weeks. The real record was set in 1998, at 264 deals, but that was a very different time and market. Then, publicly traded management companies were building nationwide platforms of physicians. The market collapsed in 1999, and most of those transactions were unwound and the deal makers vowed, “Never again.” Welcome to 2018.... Read More »

PMG Sector Sets Record in 2016

Mergers and acquisitions in the Physician Medical Group sector hit a record 119 transactions in 2016, up 19% over 2015’s previous record of 100 announced transactions. Consolidation was a big theme, as some of the top publicly traded companies either merged or were taken private. Another factor driving independent physician practices to team up was MACRA (the Medicare Access & CHIP Reauthorization Act of 2015), which gave smaller physician practices the option to stay with fee-for-service Medicare reimbursement, or to switch to value-based payment for treating Medicare patients. The best option for many groups was to join a larger practice or the local hospital. Despite the frenzy of... Read More »

MACRA Is Spooking Physician Medical Groups

With a full quarter left to go in 2016, mergers and acquisitions in the Physician Medical Group sector have caught up to last year’s total number of transactions. In 2015, 89 deals were announced. Through September 26, 2016, the sector’s deal volume has reached 88. One factor contributing to the increase in activity is the Medicare Access and CHIP Reauthorization Act (MACRA) passed in April 2015. The bipartisan bill took aim at physician practices treating Medicare Part B patients, and awarded those that went with a value-based reimbursement schedule versus those that stayed with the fee-for-service model. The true impetus, however, came from the aggressive implementation... Read More »

Q2:16 Results Defy Brexit and Other Uncertainties

You’ve seen the headlines: Global mergers and acquisitions slid in the first half of 2016, as did the combined value. The number of middle market deals completed in the second quarter fell to levels not seen since 2009. Buyers are walking away from targets that could be affected by sudden changes in tax regulations. It’s all thanks to Brexit and the U.S. presidential election. Then there’s the healthcare market. Deal volume actually increased compared with the previous quarter in 2016, and the same quarter a year ago. Deal volume for Q2:16 reached 396 announced transactions, up 11% versus Q1:16’s 358 deals, and 15% higher than last year’s 344 deals in the second quarter. For the first half... Read More »

AmSurg Finds a Partner for $6.7 Billion

Last fall, AmSurg Corp. (NASDAQ: AMSG) made an unsolicited bid for TeamHealth Holdings (NYSE: TMH), to the tune of $7.8 billion. At the time, TeamHealth was working its way through its own merger with IPC Healthcare, for $1.6 billion. It snubbed AmSurg’s offer as too low, and went on to complete its IPC acquisition on November 23, 2015. Analysts who follow the Physician Medical Group sector generally praised AmSurg’s offer from a strategic perspective, as it would create one of the largest national providers of outsourced physician services to health systems. Alas, AmSurg withdrew its offer on November 2. For the record, AmSurg provides ambulatory and physician services in the... Read More »