Clinical Care M&A Outlook: The Prognosis for 2018 Deal Flow

US Healthcare consolidation is surging—with $164 billion of M&A activity in the first half of 2018, up 87% from the first half of 2017 and already nearing the decade-plus high of $211 billion in 2017. Sweeping changes in healthcare are having particularly significant effects on patient-facing clinical practices—a category that includes ambulatory care and outpatient facilities, as well as physicians groups.

Physician practices make up a small but growing percentage of this M&A activity as these doctor-owners recognize and respond to seismic shifts in patient care, technology trends, and reimbursement dollars. In particular, these new payment schemes, combined with increased margin pressures, and greater industry consolidation trends have resulted in a flurry of physician practice M&A.

“In prior reports, we shared there would be accelerated, wholesale changes to the healthcare industry and that is beginning to play out,” said Christopher Helmrath, Managing Director of SC&H Capital. “And the variables driving much of the transformation are the need to reduce costs, while increasing the quality of patients outcomes.”

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