HEALTH & LIFE SCIENCES NEWS
HEALTH & LIFE SCIENCES NEWS
Exploring Critical Business and Legal Issues across the Healthcare and Life Sciences Industries
HEALTH & LIFE SCIENCES NEWS
Exploring Critical Business and Legal Issues across the Healthcare and Life Sciences Industries
PPM/ASC
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Tips for Conducting Effective Due Diligence in an Auction Process

In today’s highly competitive healthcare environment, investors may find themselves in an auction process where they must conduct due diligence pre-exclusivity. With limited time and mounting pressure, it can be difficult to know what issues to prioritize. Here are some practical tips for focusing your due diligence efforts strategically in a pre-exclusivity setting: Quality of Earnings: Against the backdrop of high valuations, quality of earnings should be a key diligence focus, particularly in the context of high-complexity transactions  such as corporate carve-outs, partnerships with corporates and public-private pairings. For example, it is critical to examine the pro forma EBITDA to see if it excludes costs or includes questionable adjustments or add-backs. Timeline: How competitive is the auction process and when are bids due? Does the buyer plan to conduct a full due diligence review pre-exclusivity, or instead look for big ticket liabilities that have...

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Tips for Winning Competitive Health Care Auctions

The current environment for healthcare transactions is fiercely competitive with high prices, tough deal terms and limited time for proper due diligence. In terms of both value and number of deals, 2018 was the biggest year for health care private equity (PE) since the financial crisis. More large cap PE firms are moving into the small and mid-cap space, increasing competition. At the same time, non-health-care entrants are competing with US and international PE, especially in the area of physician practice management and other related health care services. Faced with this stiff competition, sponsors are getting more creative in their healthcare partnerships, whether that means partnering with management teams on new strategies, partnering with large strategics or even with one another.  These innovative collaborations can open up more investable opportunities, including public to privates and secondary trades among sponsors. Even with these creative new...

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Strategies for Maximizing Physician Practice Management Investments

Don’t miss out! Register today for the 2019 Physician Practice Management & ASC Symposium, May 7-8, Nashville, TN Private equity continues to fuel robust activity in the physician practice management (PPM) sector. Within the last five to seven years, not only have PPMs within traditional areas of medicine proliferated, but new specialties also have been joining the fray at a rapid clip. While today’s PPM activity is vigorous, it is markedly more deliberate than the first iteration of these partnerships, which featured a rush of M&A activity but little income repair or ongoing integration, and ended with the dramatic collapse of the single-specialty PPM bubble in the late 1990s. To ensure that a PPM is viable in today’s environment, consider the following strategies: Pick the right investment targets. Hallmarks of a sustainable health care business include improved outcomes over time and enhanced patient experiences (e.g., access to clinicians, ease of...

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A Year in Physician Practice Management: For Auld Lang Syne

With equal parts hope and optimism, we look ahead to an eventful New Year. This is particularly true for the physician practice management (PPM) industry: we reflect on the progress of the past while looking forward to the opportunities today’s growing and increasingly complex landscape provides. We believe the trends we’ve seen shape the industry will continue to be influential, including: The growing involvement of private equity investors Last year, we hosted the 2018 Health Care Services Private Equity Symposium, where we discussed how various business and legal opinions have an impact of private equity in the PPM industry. Watch this space, as they say, in 2019. PPMs continue to garner an emerging interest from investors, who are noting their benefits for assisting physicians in an increasingly complex reimbursement and regulatory environment. An increased focus on specialties entering the PPM fray In the late 90s, we saw a fast, chaotic rollout of PPMs...

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Pursuing Progress: Collaborative Transformation in Action

It's the industry disruptors, the unusual partnerships, and the cross-border and cross-sector relationships that are driving Collaborative Transformation in the health care and life sciences organizations. But a Collaborative Transformation takes more than signing paperwork and shaking hands. A successful Collaborative Transformation takes cultural integration between non-traditional partners, incorporating new technologies into health care regulatory compliance structures, and so much more. At McDermott, we've recently had the opportunity to help our clients pursue their own Collaborative Transformations, and are proud to showcase their achievements. Innate Pharma Expands its Collaboration with AstraZeneca McDermott Will & Emery advised Innate Pharma, a French oncology-focused biotech company, in signing a multi-term agreement with AstraZeneca and MedImmune – AstraZeneca's global biologics research and development arm. This agreement broadens the...

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Collaborative Transformation: Shaping the Future of Health Care, Together

As the health care and life sciences fields experience ever-increasing levels of disruption, diverse entities across the industry are teaming up to embrace and foster innovation. These new pairings are shaping the future of health care, as organizations come together to tackle the industry’s most pressing issues with redoubled agility and pooled resources. In an environment of change and uncertainty, this trend of Collaborative Transformation is yielding improved financial outcomes, increased operational efficiencies, and a fresh infusion of diverse talent and perspectives—all of which result in enhanced quality of care. This is where the McDermott Health and Life Sciences team comes in. As a top-ranked US health law practice and a leader in life sciences with decades of experience advising the leading players in US and cross-border health and life sciences, we have the skill, market insight and ingenuity to partner with you wherever your innovation takes...

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ONC Expected to Release Proposed Information Blocking Rule Soon

It has now been one month since the US Department of Health and Human Services (HHS) Office of the National Coordinator for Health Information Technology (ONC) sent its proposed information blocking rule to the Office of Management and Budget (OMB) for required review. We expect OMB to approve the much-anticipated proposed rule and ONC to release it soon with the usual opportunity for public comment. While we wait, there are some things that health information technology developers, health information exchanges, health information networks and health care providers who may be subject to the information blocking prohibition and enforcement actions can do to prepare for the upcoming comment period. But before we get to comments, let’s remind ourselves about how we got to this point. By way of background, Congress asked ONC to produce a report describing the extent of information blocking and a strategy to address it. ONC submitted that report to Congress in...

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Key Considerations for a Seamless Practice Acquisition

For physician practice management (PPM) organizations going through an acquisition processes – whether by a physician group or a private equity firm – one idea should remain top-of-mind: integration must start before the closing. The Harvard Business Review states that 70 to 90 percent of acquisitions fail because of integration issues, noting that “companies that focus on what they are going to get from an acquisition are less likely to succeed than those that focus on what they have to give it.” Working toward a smooth transition for employees from day one will not only help boost morale, but also contribute to the value-add of your PPM. With that in mind, below are four key considerations to help implement an efficient and effective integration strategy, ensuring a seamless transition before, during and after the deal is done: Put Your People First – As we explored during our annual PPM/ASC Symposium back in March, the first step and greatest challenge in...

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The Importance of Ongoing Physician Collaboration, Engagement and Integration in PPM Management

In partnerships, the key to success lies in communication, understanding, and involvement. This certainly applies to PPMs, which learned in the 1990s that an “us versus them” mentality between physicians and the management companies can lead to economic turmoil. To avoid a similar fate, those in charge of managing a PPM must understand the needs and desires of those leading the boots-on-the-ground patient operations. Working closely with physicians and establishing what they need is crucial to aligning incentives, which leads to happier employees and a better return on investment. It is incumbent upon the PPMs of today to learn from the mistakes of 20 years ago and foster healthy, receptive relationships with physicians. It is also important to truly integrate acquired practices, so that the physicians really feel part of a single integrated system and not part of an independent affiliate of the PPM. All of this can be done using the following five...

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Three Environmental Factors Impacting the PPM Industry and Getting Deals Done

The PPM industry is by no means immune to the ebbs and flows of a traditional marketplace. Since the consolidation bubble burst in the 1990s, PPMs have gone from practically extinct to a once-again substantial component of the health care delivery system. But with greater influence comes more pressure to respond, and adapting to today’s complex operating environment requires those in the PPM industry to ensure they are building the foundational structure needed to help practices adapt to external factors and achieve long-term success. Here are three defining aspects of today’s complex PPM environment, as well as several important considerations to help navigate environmental uncertainties and create a better patient experience. Physician satisfaction and expectations are changing: As millennial doctors enter the workforce, they’re driving a sea change in terms of job expectations. With better work-life balance as a top priority, many young physicians are...

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