The healthcare industry is constantly evolving. The way we practiced medicine in previous generations is not the same as how we serve patients today. Groups that want to thrive need to make changes to stay relevant — as was recently highlighted with CVS Health Corp.’s recent announcement of its plans to acquire Signify Health Inc.
The transaction serves as an opportunity to discuss when merger and acquisition deals make good business sense for healthcare providers. Three lessons that every group can learn from this deal include the following.
#1: The healthcare marketplace is evolving
As noted above, the healthcare marketplace is evolving. We are moving away from the traditional fee-for-service payment model towards one that focuses on value of care provided.
CVS noted part of the motivation for the deal was that fact that it would help it shift its focus to providing value-based care. This is in part because Signify has software that helps organizations set up value-based payment plans with various payers like government programs and health plans.
#2: Diversification is important
Healthcare groups often need more than just the ability to practice medicine to survive. Groups also need good business acumen, which includes practice like billing. Having the software and structure in place to make sure billing is done accurately and efficiently can help better ensure your practice is successful in today’s marketplace.
#3: These deals take time
The group explains that it does not expect the deal to close until the end of the year. It can take months or even years to finalize these types of deals. It is important to complete thorough due diligence before finalizing the acquisition of a health care company. This better ensures that when a deal is complete, the transition goes as expected.
Attorney John Rivas is responsible for this communication