What Will a Biden Presidency Mean for U.S. Healthcare?

Key Takeaways

  • Split Senate limits legislation to what can pass with budget reconciliation and gain support of all 50 Democrats
  • Anticipate Biden to expand Obamacare and Medicare instead of introducing new programs, like a “public option”
  • The selections of Harris for VP and Becerra for HHS Secretary signal continued tight anti-trust enforcement
  • Expect increased and well-financed PE-backed disruption

A Joe Biden- Kamala Harris administration has significant implications for U.S. healthcare.  While it is instructive to review candidates’ platforms related to the industry, they tend to be better predictors of priority than the ultimate shape of policy or legislation. Biden’s boldest plans will be challenging to achieve, even with Vice President Harris serving as the tiebreaker in the evenly-split Senate.

Democrats are not unified behind sweeping expansion of federal health coverage like the public option, as we saw during the 2010 ACA debate. With little hope of GOP support for most liberal healthcare policies, it is unlikely that any significant legislation will receive the required 60-vote approval in the Senate to bypass the filibuster. Experts agree that Biden will have to rely on the budget reconciliation process- which requires only a simple majority- to pass healthcare legislation. Yet there are parameters to

January 18th, 2021|Publications|

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


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

The Intersection of Mission and Margin

As healthcare has transformed from a nascent local patchwork of services to one of our country’s leading industries, hospitals hold steadfast to their missions that have roots going back a century or more.

The precursors of many public and non-profit hospitals were almshouses or sanitariums created by municipalities or religious orders. These institutions treated the infirm and indigent and were funded largely by benevolent organizations, local public coffers, and personal donations. Patients paid whatever and however they could for care. In detailing their institution’s history, hospitals fondly evoke early 20th-century fundraisers held by school children, women’s auxiliary groups, and the like to purchase medical supplies and equipment.

So much has changed, but the main tenets of every hospital’s mission have remained the same: ensure access to compassionate, quality care and advancement of community health.

Yet, as any CEO will tell you, a modern charitable bent may earn a tax exemption, but it does not ensure the revenues necessary to keep a hospital’s doors open. No margin, no mission. Without a functional hospital, charitable endeavors are moot. The need to fulfill a hospital’s historic altruistic mission must be reconciled with the need for that hospital

June 3rd, 2019|Publications|

Government-Affiliated Hospital Business Combinations: The Governance Dynamic

Many governmental hospitals might benefit from ownership change; in certain instances it is acutely needed. They face the same pressures to improve quality and lower costs that challenge most hospitals and health systems. In addition, they are confronted with complicated governance structures and disclosure requirements along with restrictions on capital.

Leaders of governmental hospitals that wish to consider ownership change should focus heavily on governance issues. Most resistance-to-change and transaction difficulties have resulted from leadership of the governmental entity and the hospital failing to act in a unified manner. Juniper aims to help create cohesion among hospital and government leaders as early as possible in a partnership process.

The initial efforts should encourage both governmental and hospital leaders to reach early agreement regarding the need for the process and what would be an optimal outcome.

  • Gain consensus among the two groups on several fundamental objectives for the health system.
  • Proceed in a collaborative manner with consistent governmental and hospital representation.
  • Work with legal and financial professionals to overcome legal and structural complexities.
  • Follow state sunshine laws assiduously and
April 26th, 2019|Publications|

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