News & Events Archives - Juniper Advisory

Are Hospitals Prepared for a Recession?

News coverage of a possible economic recession flared a few weeks back with a yield curve inversion, a bond market phenomenon that is historically associated with a financial downturn. The curve came with a 3% drop in the Dow and S&P. Healthcare-related stocks took an even larger fall. The Federal Reserve’s interest rate cut failed to immediately bolster the market.

While economists can’t precisely pinpoint the start of the next recession, this market volatility should serve as a wake-up call to vulnerable healthcare organizations. As we saw during the Great Recession (Dec. 2007- June 2009), an economic downturn can be particularly harmful to standalone and government hospitals and health systems currently eking out the slimmest of margins. Hospitals should be preparing now to absorb the financial impact of a recession.

The hospital business is highly subject to consumer utilization patterns. Out-of-pocket healthcare costs continue to be burdensome for many Americans with the proliferation of high-deductible health plans. Half of adults surveyed by the Kaiser Family Foundation in March 2019 said they have put off seeking medical care in the past year due to costs. This comes despite the U.S. currently experiencing one

August 30th, 2019|News & Events, News-Home, Publications|

In the News: McGuireWoods Partner Scott Becker Interviews Juniper’s Rex Burgdorfer on Investment Banking

Scott Becker, Partner at McGuireWoods, past Healthcare Department Chair and founder of Becker’s Hospital Review, interviews Rex Burgdorfer, Managing Director of Juniper Advisory, about how Juniper leverages its investment banking expertise to help nonprofit hospitals assess and develop new business combinations.

Listen to the full interview here.

August 6th, 2019|News & Events|

Summa Health would become wholly-owned subsidiary of Beaumont Health

Southfield, Michigan-based Beaumont Health and Akron, Ohio-based Summa Health have signed a Letter of Intent to develop a strategic partnership. The arrangement would strengthen both organizations’ cost-effective approaches to partnering with communities in new ways to improve quality of care and overall health. Juniper is advising Beaumont on this transaction.

The Letter of Intent signals the beginning of the process to draft definitive agreements to bring the two not-for-profit health systems together under Beaumont Health. The arrangement would allow for continued growth and expansion to serve patients better in Michigan and Ohio. Summa Health would maintain local leadership, including a local board.

“Beaumont Health and Summa Health are already strong and successful health care leaders. By welcoming Summa into the Beaumont family, both organizations will share expertise, invest in each other and continue to thrive as the industry evolves,” Beaumont Health CEO John Fox said. “As we expand into Ohio, we will continue to invest in our Michigan employees and operations. This year, we will launch 30 new urgent care centers.

July 9th, 2019|News & Events, News-Home|

PA Hospital with Minority Owner Joins New Regional Partner

The Huntingdon, PA-based J.C. Blair Health System has officially joined Penn Highlands Healthcare, effective June 1. J.C. Blair Memorial Hospital, a 71-bed, non-profit community hospital, is now known as Penn Highlands Huntingdon, making it the fifth hospital in the Penn Highlands Healthcare system. Juniper advised J.C. Blair on the transaction.

Juniper designed for J.C. Blair an effective and efficient process tailored for its complex circumstances that achieved the key partnership objectives set forth by the Board of Directors:
• Protect and expand high-quality acute care services and jobs in the community
• Preserve a meaningful local role in the hospital’s governance

Juniper specifically tailored the partnership process to address J.C. Blair’s unique ownership structure, given that a separate, large regional health system owned a minority interest in the hospital. The transaction included concurrent negotiations with the minority owner to ensure J.C. Blair’s full membership interest was conveyed to Penn Highlands Healthcare, meeting the needs of the hospital and all constituents involved in the transaction.

“This affiliation represents an exciting new chapter in our growth,” said Steven M. Fontaine, Chief Executive

June 5th, 2019|News & Events, News-Home|

Santa Clara County Succeeds in Securing the Future of Endangered Local Hospitals

The County of Santa Clara (Calif.) assumed responsibility for the operation of O’Connor Hospital in San José, St. Louise Regional Hospital in Gilroy, and De Paul Health Center in Morgan Hill on March 1, 2019. This transaction advances the County Board of Supervisors’ strategic goal to grow the size and scope of the County’s public healthcare delivery system. Juniper Advisory advised Santa Clara County on this transaction.

The two hospitals and health center were acquired from Verity Health, a health system that filed for Chapter 11 protection in late August 2018, triggering the potential sale of all six of its hospitals and other related assets in California. The County purchased the three Verity Health facilities located in Santa Clara County for $235 million.

“We are excited to bring these community hospitals into our health system as we expand and enhance the high-quality care that so many Santa Clara County residents have come to rely on,” said County Executive Jeffrey V. Smith, M.D., J.D. “Our new partners share our mission, values, and passion to serve. We expect O’Connor and Saint Louise

March 12th, 2019|M & A, News & Events, News-Home|

Heritage Valley Health System Expands its Integrated Delivery Network

Heritage Valley Health System, a two-hospital integrated delivery network in Western Pennsylvania, and Ohio Valley Hospital have completed a strategic business combination. By joining together, the organizations will further enhance their common mission of bringing cost-effective, high-quality care to their respective communities and best meet the health care needs of the region.

Heritage Valley Health System was unanimously chosen by Ohio Valley Hospital’s Board of Directors as its preferred partner following an eight-month long strategic planning process in which it considered a range of strategic options and partners. Juniper Advisory has served as Heritage Valley Health System’s exclusive advisor throughout this process, helping to develop and execute a proposal strategy and structure that was responsive to Ohio Valley Hospital’s stated objectives.

According to Ohio Valley Hospital’s announcement, the alignment with Heritage Valley Health System “will enable Ohio Valley Hospital to enhance its medical staff, expand clinical services and fund future capital projects”. Ohio Valley Hospital, like many independent community hospitals, has been challenged over past years by increasing operating costs and decreasing reimbursement.

Ohio Valley Hospital becomes the third hospital in the Heritage Valley Health System, joining Heritage Valley Sewickley and

January 17th, 2019|News & Events, News-Home|

In the News: Healthcare executives expect M&A to boost business in 2019

Healthcare executives expect their businesses to exceed 2018’s benchmarks and will largely use mergers and acquisitions to reach those expectations, according to a new survey.

Nearly three-quarters of 291 senior executives from pharmaceutical, healthcare IT, medical technology, hospital and health system organizations said they expect better business performance in 2019, according to a new Capital One poll.

Mergers and acquisitions are the preferred growth plan for 44% of executives, down from 50% last year. That strategy mirrors the last three year’s polling results.

…

Health systems are also building regional hubs within and across state lines. Scale can help them negotiate better rates with suppliers and payers and expand patient access through boosting investment in outpatient facilities and telemedicine. Crunching data on regional populations can also reveal the most profitable service lines, clinical quality performance, their current position with payers and the strength of their physician network.

But mergers and acquisitions can fall short when far-flung organizations can’t unify their operations. Redundant executive roles may slow decision-making and inflate expenses. Standardizing electronic health records and enterprise resource planning platforms can

January 9th, 2019|News & Events, News-Home, Uncategorized|

Analysis: Hospitals Buoyed by Tenuous Investment Income

Investment income resulting from a strong stock market has propped up many standalone hospitals’ balance sheets over the past two years, according to a recent evaluation by Juniper Advisory. In analyzing a sample of independent hospitals’ financials, Juniper Advisory found that investment income accounted for nearly half of the hospitals’ net margin. Hospitals that depend heavily on investment revenue could struggle to keep their doors open in the next economic downturn.

“Like any business, hospitals should not consistently rely on investment income to support their day-to-day operations,” said David Gordon, Principal, Juniper Advisory. “We’ve been watching the ongoing economic growth, which is good for both hospitals and their patients, but the economy will not always be as strong as it has been the last few years. When that time comes, hospitals will have to demonstrate that they can provide care much more cost-efficiently.”

Juniper Advisory reviewed the most recent audits available for a sample of 90 independent hospitals in California, Florida, Illinois, Indiana, Iowa, Minnesota, Ohio, Texas and Wisconsin. The average annual revenue of the sampled hospitals was $437 million.

Key findings of Juniper Advisory’s analysis include:
• 61% of hospitals had operating

December 12th, 2018|News & Events, Publications|

Join the Cleveland Clinic and Indian River County Hospital District in Naples to Discuss Florida Hospital Affiliation

The Indian River Medical Center (IRMC) in Vero Beach, Florida, will join the world-renowned Cleveland Clinic in a business combination expected to close by the end of 2018.

Engage with leaders from the Cleveland Clinic and Indian River County Hospital District in discussing the transaction at The Governance Institute’s 2019 Leadership Conferences in Naples, Florida on January 21 and in Scottsdale, Arizona on April 16.

The transaction between IRMC and the Cleveland Clinic is representative of both the growing wave of governmental and community hospitals exploring new ownership structures and large health systems pursuing bold growth strategies in attractive markets.

Dr. Wael Barsoum, CEO and President of the Cleveland Clinic Florida, Josette Beran, Chief Strategy Officer of the Cleveland Clinic and Marybeth Cunningham, Chair of the Indian River County Hospital District Board of Trustees will discuss the origin of their partnership, considerations unique to a government hospital transaction, and early results. The panel discussion will be moderated by Jamie Burgdorfer, Principal of Juniper Advisory, who served as the transaction advisor.

The Governance Institute is a trusted source of resources and solutions for hospital board members, executives and physician leaders. The Institute hosts annual conferences around

November 16th, 2018|News & Events, News-Home|

IRMC and Cleveland Clinic Finalize Partnership

The intensive 18-month effort to secure Indian River Medical Center’s future neared its conclusion on October 3, 2018 as the IRMC Board of Directors and the Indian River County Hospital District Trustees voted to approve a series of agreements that will result in IRMC joining the Cleveland Clinical Studies system. Juniper Advisory is serving as Indian River’s advisor in this transaction.

Under the terms of the transaction, Cleveland Clinic is committing to invest at least $250 million in IRMC over the next 10 years.

“This is an extraordinary day in the history of our community,” said IRMC Board Chair Dr. Wayne Hockmeyer. “People across the country and across the world know that Cleveland Clinic stands for world class healthcare, and they will be partnering with the exceptional staff, physicians and nurses at IRMC to provide that level of care right here in Vero Beach for years to come.”

After a public meeting on Sept. 25 where advisors and legal teams shared the details of the agreements, board members and trustees took the last week to pore over those details and deliberate about their decision. In separate public meetings today, the IRMC Directors and IRCHD

October 3rd, 2018|News & Events, News-Home, Uncategorized|