Healthcare M&A Activity Surges in Q2

The surge in M&A activity reflects increased pressure on the healthcare industry to reduce costs and increase the quality of care. Everyone is "trying to figure out what they need to do that," Steve Monroe, a Levin Associates editor, told HealthLeaders Media.

Physician Group Deals
The value of physician group M&As climbed to $4.2 billion during second quarter 2012 thanks to another blockbuster, the $3.7 billion agreement between Davita, a Denver-based dialysis chain with 1,800 locations, and HealthCare Partners, which operates medical groups and physician networks with more than 2,500 employed or affiliated physicians in California, Florida, and Nevada.

There were 21 physician group M&As posted for the quarter compared with 27 transactions valued at $416 million for the comparable 2011 quarter.

The Davita-Healthcare Partners acquisition reflects the continuing effort by providers to position themselves to tightly control costs and to create alignments that enable the care continuum to be realized. This is happening across the healthcare industry, explains Monroe. "Everyone is trying to position themselves, and cover themselves, so they can deal in an environment that is still a bit unknown."