Private Capital Markets and Health Systems: How to Navigate Private Equity Opportunities for Healthcare Entities (72H)

As financial pressures force consolidation of good hospitals and physicians, it is becoming clear that a better approach is needed to keep care systems from falling apart. Healthcare leaders fighting to stay open while maintaining care quality are increasingly turning to private equity (PE). As a result, health system leaders find themselves overexposed due to PE firms' buyouts of other portfolio companies, a conglomerate risk completely outside managerial control of a PE-acquired health system. Hospitals, outpatient care, physician staffing, ER services and revenue cycle management saw the highest levels of PE M&A. Competitive pressures keep the M&A deal sizes small due to vertical integration with payers, raising questions about the viability of many PE investments, especially given the variability in healthcare economic conditions. This presentation explores PE as one option in a diversified capital structure that best reflects the exit goals of a healthcare company. We will briefly review M&A process, role of M&A advisors and examine achievable synergies in healthcare by case study. The aim of the presentation is to guide healthcare leaders to protect liquid capital, stay informed about private capital markets and make better judgements in the integration process after M&A.