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Seventy-one percent of healthcare leaders expect merger and acquisition (M&A), and other partnership activity to increase over the next three years, according to a HealthLeaders survey. But as hospitals explore consolidation as a strategy for navigating reimbursement, regulatory and market challenges, there is concern that some organizations are rushing the letter-of-intent (LOI) process. An LOI is […]
CMS published its final rule, the “Pathways to Success” for the Medicare Shared Savings Program, in December 2018. CMS’ overall goal is clear and unchanged from the proposed rule: to put the “accountability” back in accountable care by moving ACOs more quickly to downside risk. While the final rule tracks the proposed rule issued in […]
“Everyone in the industry is merging. We should be too.” “We’ve always been independent, and we should stay that way.” Independent hospitals continue to merge or affiliate with other hospitals or with health systems. However, independent hospitals still have company. In 2016, the latest year for which information is available, there were about 1,600 independent […]
Many of the reasons why physician practice acquisitions come apart after the deals are finalized fall under the category of “operational incompatibility.” Too often, the team that negotiates the deal is not the same team that is charged with operationalizing the deal. As a result, potential administrative and management problems — from physician appointment schedules […]
Compensation is often a make-or-break deal point in a hospital’s acquisition of a physician practice. Prospective physician employees will naturally compare what they will earn post-acquisition to what they currently earn as practice owners, partners, or employees. From the hospital employer’s perspective, discussions around physician compensation provide important opportunities to win physicians over and to […]
It’s tempting to short-change the due diligence process when acquiring a physician practice. In the heat of a deal, hospital leaders are understandably most interested in determining fair market value (FMV) so they can make the buy decision and set the purchase price. The due diligence process can turn up insights about a physician practice […]
Open PDF file > It’s healthcare’s version of dating: sizing up another organization for a potential partnership or merger. Seventy-one percent of healthcare leaders expect their organization’s merger, acquisition, or partnership activity to increase over the next three years. With continued changes to healthcare’s competitive landscape, hospital mergers and acquisitions (M&As) reached a record high […]
On August 9, 2018, CMS issued new proposed regulations for MSSP ACOs that, if finalized, will result in far-reaching changes in the program. The motivation for the proposed changes, which CMS calls “Pathways to Success,” is simple: CMS wants to move ACOs to risk more quickly. The great majority of 2018 participating ACOs are not […]
Performance results were recently released for the 5th year of the Medicare Shared Savings Program (MSSP). These results show that a small but growing proportion of ACOs continue to earn shared savings from Medicare, as shown below. This data comes at a pivotal moment for Accountable Care Organizations (ACOs) as they rush to determine how […]
Next Generation ACOs (NGACO) have been associated with model-wide reductions in spending without declines in quality, according to a new report from CMS. Based on their first performance year (2016), the participating NGACOS reduced Medicare spending by approximately $100 million. The savings appeared to be associated with reductions in hospital and skilled nursing facility […]