Sunday, January 23, 2011

Healthcare M & A Heating Up?

  Based on a story in MergerMarket.com, Healthcare M & A is due for an uptick.  In fact, according to their recent survey, 96% of respondents expect an increase or a significant increase. The authors point out that "This bullish response is not necessarily surprising, as the healthcare sector as a whole is facing an increasingly competitive climate as well as increased demand."  
  
However, according to the Walden Group, current deal activity reflects "...uncertainty over the economy, healthcare reform".  Further, "...acquirors therefore are more discriminating." To view their Q3 report, click on this link:   The Strategic Healthcare M & A Report

If you are contemplating a deal, you may want to read McDermott, Will & Emery's article entitled:
Top 5 Potential Pitfalls in Health Care M&A Transactions 

Saturday, January 15, 2011

Research shows healthcare continues to be an economic driver in state

A recent research report in Florida Trend demonstrates that healthcare firms continue to be prominent in the state's economy.  
Appearing on the Largest Public Companies list (Top 20) were WellCare Health Plans based in Tampa at #12 and Health Management Associates out of Naples coming in at #17.  Also making the list was PSS World Medical (#31), a Jacksonville based medical device distributor and Lincare Holdings (#39), a provider of specialized healthcare services out of Clearwater.  Rounding out the list of top public healthcare companies was Mednax, the Sunrise based super group practice at #40.
The research report also showcased healthcare firms on the list of Florida's Largest Private Companies.  Making that list were Arthrex, a Naples based designer and manufacturer of medical devices at #25, home healthcare provider Interim Healthcare of Sunrise at #29 and Signature HealthCARE (#40), the skilled nursing facilities company out of Palm Beach Gardens.
In sum the firms generated over $18 Billion in revenue and employed more than 67,000 people in 2009.  All of the public companies were profitable while the private firms did not disclose profit or loss.  These results are pretty impressive indeed considering the data comes from the depths of the Great Recession. 
To view the reports, click on the links below.
Florida's Largest Private Companies

Sunday, January 2, 2011

Is it possible to de-politicize the health policy discussion?

        Probably not. That said it might be a good idea to temper our rhetoric a bit.  Although popular with politicians, health policy is not easily formulated against a political backdrop.  Countervailing values push and pull the debate and an ideological solution appears remote.  Meanwhile the polarization so evident in the broader community is apparent in our own ranks.  See Nurses, doctors at odds on politics, 10-13-10 - Health News Florida.  Progressives and Conservatives do agree on at least one aspect of health policy.  There is a general consensus that significant change must be applied to our health system to cope with healthcare inflation, unfunded liabilities and an aging demographic.  But gridlock might be the result if a middle ground cannot be found. 

Healthcare is a bit of a policy conundrum.  On the one hand civilized society must provide as a basic humanitarian duty.  On the other, personal responsibility is critical for resource allocation efficiency. Progressive insist that government must underwrite healthcare as an essential resource/infrastructure investment in the same way it finances/operates schools, bridges & roads, law enforcement & the courts, and national defense.  Then Conservatives remind us that runaway costs demand a market solution and market price discipline.
And it's not as if the health policy riddle is a new one.  Allen D. Spiegel, Ph.D. describes a healthcare system created by King Hammurabi of Babylon: "AT THE DAWN OF CIVILIZATION, about 4,000 years ago, nomadic Semite tribes developed a managed health care system. Using cuneiform, a hieroglyphic writing, they inscribed the concepts on clay tablets and chiseled them into stone between the 17th and 21st centuries B.C.  Adapting the existing edicts, King Hammurabi of Babylon incorporated ... managed care precepts in the Codex Hammurabi, a huge stone stele erected about 1700 B.C."
Meanwhile, Wikipedia describes the Healthcare system in Ancient Rome: "The importation of the Aesculapium established medicine in the public domain. There is no record of fees being collected for a stay at one of them, at Rome or elsewhere. The expense of an Aesculapium must have been defrayed in the same way as all temple expenses: individuals vowed to perform certain actions or contribute a certain amount if certain events happened, some of which were healings. Such a system amounts to gradated contributions by income, as the contributor could only vow what he could provide. The building of a temple and its facilities on the other hand was the responsibility of the magistrates. The funds came from the state treasury or from taxes."
Or consider this passage from All Quiet on the Western Front, by Erich Maria Remarque describing the health system in World War I Germany:  "The dressings afterwards are so expensive" says my father.  "Doesn't the Invalid's Fund pay anything towards it, then?" I ask.  "Mother has been ill too long."  Sounds like mom hit the policy limits or perhaps is the victim of a pre-existing condition clause. 

A reader recently complained that "we (seemingly) inexorably evolve toward socialized medicine".  But a pure market based solution is unthinkable.  Could you imagine this scenario: "I am sorry sir, we can't treat you following your life threatening diagnosis; we were unable to get an approval code on your AMEX".  So some sort of government involvement including safety nets and income redistribution is mandatory.  We just need to figure out to what degree.

The Conservatives believe the Healthcare Reform of 2010 goes too far.  Some Progressives believe that it is woefully short of what's necessary.  The discussion will continue and we will evolve towards, I am sure, a uniquely American solution.  The fact is both extremes have valid points so compromise is the only reasonable outcome.

Healthy debate is a good thing and I encourage it in the pages of FHIweekly and FloridaHealthIndustry.com. But polarizing, ideological rhetoric is counterproductive.  As the sun rises on the new year and we continue to emerge from the Great Recession, our challenges are enormous.  So gratuitous talking points are out.  Discussion and debate are encouraged.    

About the author:  Mr. Herschler is the Publisher & Editor of FHIweekly and http://www.floridahealthindustry.com/.