Health-Care Consolidation Strong in 2019—Expect Even Stronger 2020

Consolidation and a changing U.S. health-care market continues to drive health-care investment activity to record levels. Epstein Becker & Green attorneys and health industry financial/investment analysts predict investment activity will continue to be relatively robust through the summer and up until the elections, despite the political unknowns. The continued proliferation of technologies to improve patient care, the accelerating development of biomedical innovation, and the sustained focus on delivering high-quality, low-cost care through value-based approaches drove investment activity in 2019 with the overall closed/announced deals for 2019 reaching 1,588 through December, a healthy increase from 2018. Physician services remained an area of great interest for investors in 2019, and is likely to continue at the same or faster pace in 2020. Although physician specialties with one or more ancillary revenue streams (e.g., ambulatory surgery, imaging, laboratory, etc.) continue to be the most attractive targets for private equity recapitalization transactions, many 2019 transactions also involved primary care physician groups, as the “gatekeepers” who have the best opportunity to control the cost of quality care.

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