VMG Health's healthcare M&A Report: the new normal
2020 Trends & 2021 Expectations
Healthcare Mergers and Acquisition (“M&A”) activity stalled in 2020 as the healthcare industry responded to the COVID-19 pandemic. Since the first vaccine was issued in the U.S. in December, 2020, healthcare services transaction activity has begun a considerable recovery. Transaction deal volume in Q1 2021 was a staggering 75% higher than transaction activity in Q1 2020. Among the major trends impacting transactions in 2020 were the rise of telemedicine, shifting referral patterns from inpatient to outpatient sites of care, cross-industry integrations, continued interest from private equity firms in the healthcare services space, and disruptive partnership models.
Providers continue to seek consolidation to gain market share and to take advantage of the economies of scale necessary to meet the goals of the “triple aim”, namely, increase access to care, decrease cost, and improve the quality of care.
Joe Biden was elected president of the United States in the November 2020 election. The election also resulted in the first 50-50 split in the Senate since 2001 and the Democratic party held on to their majority in the House of Representatives. Exactly how the election results will impact the healthcare industry is still unknown, but history tells us change is inevitable. The COVID-19 pandemic, changing technology requirements, and the implementation of value-based payments and alternative payment models continue to drive industry dynamics. While buyers tend to proceed cautiously in the face of uncertainty, large changes affecting healthcare providers have historically been accompanied by an increase in M&A activity. With vaccine distribution underway, the healthcare industry and the country on the path to recovery from the COVID-19 pandemic, and market participants seeking to deploy the capital that has been sitting on the sidelines for the past year.
Leveraging VMG’s expertise as the leading provider of healthcare transaction and valuation services, this annual report examines the healthcare M&A landscape before and after COVID-19. We analyze transaction activity, regulatory changes, reimbursement outlook, post COVID-19 M&A outlook, and other industry dynamics driving M&A, across several prominent healthcare verticals. Namely:
- M&A in COVID-19: Impact and Future Implications
- Ambulatory Surgery Centers
- Diagnostic Imaging Centers
- Acute Care Hospitals
- Physician Medical Groups
- Post-Acute Care
- Behavioral Health Facilities
- Urgent Care Centers
- Dialysis Facilities
- Private Equity Healthcare M&A (All Sectors)