Gary Herschman, Paul Gilbert Quoted in “Big Health System Deals Dominate Transactions in October”Bloomberg BNA Health Care Daily Report November 21, 2018
Gary W. Herschman and Paul D. Gilbert, Members of the Firm in the Health Care and Life Sciences practice, in the firm’s Newark and Nashville offices, respectively, were quoted in the Bloomberg BNA Health Care Daily Report, in “Big Health System Deals Dominate Transactions in October,” by Mary Anne Pazanowski. Yulian Shtern, Associate in the Health Care and Life Sciences practice, in the firm’s Newark office, also advised on the article.
Following is an excerpt:
The announced merger of two major Texas health systems is October’s deal-of-the-month.
The health systems, Dallas-based Baylor Scott & White Health and Houston-based Memorial Hermann Health System, signed a letter of intent to merge Oct. 1 …
The transaction will bring together two fast-growing health-care markets—an important industry trend, Paul D. Gilbert, of Epstein Becker Green’s Nashville office, told Bloomberg Law.
Hospitals and health systems are consolidating in geographic areas they believe to be strategically important, he said.
The move toward an ambulatory care environment—that is, care offered outside a hospital—creates a significant headwind for hospitals, Gilbert said. Hospitals, therefore, want to position themselves where it makes the most sense to be, he said.
The Texas deal, for example, wasn’t the only large hospital transaction in October. Cleveland Clinic announced two major deals aimed at bulking up its presence in southeast Florida, Gary W. Herschman told Bloomberg Law. Herschman, with Epstein, Becker & Green’s New York and Newark, N.J., offices, advises health-care clients on deals.
Cleveland Clinic signed a definitive agreement to acquire Stuart-Fla.-based Martin Health System Oct. 2. It is committed to investing $500 million over five years to upgrade Martin’s three hospitals, Herschman said.
Indian River Medical Center, in Vero Beach, Fla., also will join the Cleveland Clinic system, the health-care providers announced Oct. 3. Cleveland Clinic will invest $250 million over 10 years, Herschman said. …
“The physician practice sector is expected to continue to skyrocket through the end of the year,” Herschman said. There are “dozens of groups across the country in the midst of formal processes, and many others in the earlier stages of discussions or exploration,” he said.
The announced deals involve many specialties, including anesthesiology, radiology, neonatology, eye care, and dermatology, Herschman said.
Multispecialty physician practices are becoming more important, as they continue expanding to offer more ancillary and complex medical services, Gilbert said. More frequently, they are aggressively competing with hospitals to provide ambulatory care, Gilbert said.