News & Events

Hospital Partnerships, Mergers & Acquisitions—We Wrote the Book

A Healthcare Leader's Guide to Successful Mergers & AcquisitionsNavigating a hospital M&A process can be complex and daunting.

Juniper can help.

Our new book for hospital Boards and executives offers a start-to-finish look at what it takes to successfully complete a healthcare partnership.

 

 

The book includes articles from Juniper and leading partners in the field about partnership evaluations, transaction structures, legal considerations, communications and more.

For more than 30 years, the team at Juniper Advisory has had one singular focus: hospital partnerships. With our niche concentration and no competing service lines, we provide unparalleled guidance for hospitals seeking to assess their independence, find the right partner, or grow.

As more hospitals seek stability and growth through partnerships in a post-pandemic landscape, we hope you will find this book to be a valuable resource.

The book is available for purchase on Amazon. To download a free copy of the e-book, please fill out the form here.

October 7th, 2020|News & Events, News-Home|

The Looming Deadline: Repayment of COVID-19 AAP Loans

CMS’ Accelerated and Advance Payment (AAP) Program has been a lifeline for healthcare providers during the COVID-19 pandemic which loaned hospitals and others $100B.  Repayment of these loans begins August 1, 2020 – compounding the financial stress for many hospitals still grappling with the pandemic response.

In Waller’s latest episode of their podcast PointByPoint, Jordan Shields, a Managing Director with Juniper Advisory, joins Denise Burke, a partner in Waller’s healthcare compliance and operations group who advises hospitals and other healthcare clients across the country, to discuss the legal, financial and strategic implications for hospitals that received AAP loans.

Listen or read the transcript here. 

 

 

Evaluating Opportunities for Government-Sponsored Hospitals

The COVID-19 pandemic is straining hospital and governmental resources. It is also serving as a catalyst for a major evolution of our nation’s healthcare delivery system, the likes of which we have never before seen. With this confluence of factors, local governments and the hospitals they support are presented with a unique chance to evaluate the sustainability of their relationship.

For some government health systems, this may mean exploring opportunities to grow their footprint, often by supporting less-resourced 501(c)3 hospitals within or adjacent to the municipality they serve. For others, it means assessing the long-term durability of their governmental status and, in some cases, considering a conversion to an independent, non-profit entity.

Understanding the impact of government sponsorship on the hospital’s ability to meet its objectives is critical.  Our latest article highlights several key issues hospital leaders and elected officials should take into consideration when evaluating governmental sponsorship and common advantages and drawbacks to each.

Read more. 

Dealmaking in the Sunlight: Navigating Public Hospital M&A

Public hospitals have a uniquely open relationship to the communities they serve, which invites a level of transparency as they consider potential mergers and acquisitions. So what kind of M&A deal activity options are out there for public hospitals dealing with financial pressures, and how can parties navigate regulatory, financial and public opinion to get the deal done?

In this two-part Collaborative Transformation podcast series, Rex Burgdorfer, Partner, Juniper Advisory joins Megan Rooney, Partner, McDermott Will & Emery, to discuss important considerations related to government-sponsored hospital partnerships.

 

 

Part I 

  • The major trends driving public hospital M&A
  • How M&A can strengthen hospitals financially and the regulatory and external challenges contributing to financial pressures
  • Unique regulatory and financial challenges faced by public hospitals
  • Benefits of privatization in the hospital industry
  • The role public sentiment can play in public hospital transactions

Click here to listen to the podcast. 

Part II 

  • Key issues that hospital boards, senior leaders and partners must address to secure transaction approval
  • Strategies for identifying and educating stakeholders about the proposed transaction, including competitive benefits and tax and political implications
  • Choosing a deal structure that will work for all

Assessing Hospital Preparedness for COVID-19 by Affiliation Status

Overview

System hospitals tend to have more ICU beds, higher case mix indices and are more likely to be a part of physician integration networks compared to like-sized standalone hospitals. These attributes are particularly important findings during the COVID-19 pandemic, where ICU beds are at a premium; experience managing complex cases is essential; and the ability to care for patients in appropriate settings is of utmost importance.

We reached these conclusions by analyzing CMS Medicare Cost Report data, the most comprehensive set of financial and clinical data available for comparisons of U.S. hospitals. We used this data set to create regression models which can be found here. These regressions allow us to assess the impact of independence on ICU beds, CMI and ACO/CIN membership. We performed this analysis on a subset of all hospitals, namely those with 80 or fewer ICU beds. Intuitively, facilities with more than 80 ICU beds tend to be ‘hub’ facilities and there are almost no independent hospitals with greater than 80 ICU beds. Further, by excluding these ‘hub’ facilities, we review a data set where both system and standalone hospitals are well distributed and lower the

Provider Realignment Post-Pandemic

The COVID-19 crisis exposed the high cost of fragmentation within the healthcare industry and will serve as the seminal event that ushers in an era of greater provider integration and concentration. COVID-19 will accelerate U.S. healthcare’s transformation toward a future characterized by the blurring of traditional lines between care delivery and financing. There will be no going back to the industry as it existed, only a going through to a stronger, more hardened, and, in some cases and in some geographies, a materially scaled healthcare system.

Three phases are anticipated as the industry moves forward:

  • A turbulent restart through the remainder of 2020, marked by initially sluggish M&A activity as at-risk providers seek the shelter of cautious buyers.
  • A shake-out will follow over the next couple of years, characterized by strong regional systems, insurers, and private equity-backed disruptors seizing the opportunity to drive performance and efficiency through scale.
  • In a final phase, rise of the titans, national mega-systems will emerge, dwarfing today’s largest systems. These behemoths will compete directly with scaled, non-traditional, ambulatory-centric networks (e.g., integrated insurance companies) a marketplace that no longer adheres to traditional delivery vs. financing distinctions. These organizations will

COVID-19 Impact on Healthcare M&A

The COVID-19 pandemic has upended our nation and our healthcare delivery system. The extreme pressure being put on hospitals during this crisis will permanently change the way healthcare is sought and provided. In addition to the sweeping changes we can expect in clinical standards and care delivery models, we will also see changes in how hospitals approach partnerships. Following are seven observations on the impact the pandemic will have on the healthcare merger and acquisition market:

  • We are entering a buyers’ market. Hospitals and health systems are experiencing financial strain during the pandemic. The loss of revenue from non-urgent procedures along with the increase in supply and workforce costs is dramatic. The burden is being felt most acutely by hospitals that were near or in financial distress pre-pandemic. Stressed hospitals are already seeking infusions of cash and other support to keep their doors open. In the aggregate, there will be more sellers than buyers in the market post-pandemic. As a result, sellers will need to be more flexible as the composition of transaction consideration will change. Hospitals that seek relationships with academic medical centers should also be aware of the anticipated

Are Hospitals Prepared for a Recession?

News coverage of a possible economic recession flared late this summer 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 of the greatest

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.