The Pennant Group has completed its acquisition of Signature Healthcare at Home assets in Oregon, following the earlier purchase of Signature's Idaho and Washington assets on August 1, 2024. The Oregon acquisition, finalized this month, includes seven locations across the state, complementing Pennant's existing presence in Portland and Grant's Pass.
Donald Trump's election win prompted even more bullishness in a stock market that was already up significantly for the year. For healthcare investors, though, it represented yet another reason to dump some stock. Trump's appointment of industry skeptics like Robert F. Kennedy Jr., alongside broader expectations of a Republican crackdown on programs like Medicaid and Obamacare, has prompted a selloff in everything from hospitals to pharmaceuticals, health insurers and biotech.
The election jitters exacerbated what had already been a tough period for the industry. In 2023, healthcare underperformed the S&P 500 by about 22 percentage points, so many believed that 2024 would be a bounce-back year. Instead, history repeated itself, with yet another 20-percentage-point underperformance for healthcare. That created a valuation gap that looks like a historic aberration: The Health Care Select Sector ETF is trading at a more than 20% discount to the S&P 500 based on their forward earnings multiples, far larger than the average 5% discount seen over the past two decades, according to FactSet.
The market bearishness is partly due to financial fundamentals. At a time when the U.S. economy is on solid footing and tech companies are riding high on the AI frenzy, most healthcare subsectors seem to be caught in a negative earnings-revision cycle, writes Asad Haider, a healthcare equity strategist at Goldman Sachs. The reasons are idiosyncratic. For health insurers, it was due to higher-than-expected postpandemic costs as people returned in droves to hospitals and doctors. For pharma, some of the profitability issues have stemmed from higher acquisition-related charges as the industry seeks to make up for low growth with dealmaking. But the bottom line is that in a red-hot market, healthcare simply isn’t where investors want to be. Since the start of 2023, Goldman data shows healthcare with the second-biggest outflows among S&P 500 sector ETFs, behind energy.
Massachusetts State Auditor Diana DiZoglio's office says there is a "direct correlation" between inaction by the state's Center for Health Information and Analysis and the closing of hospitals. The routine audit of the agency, founded by the legislature in 2012 and known as CHIA, covered the two-year period ending June 30, 2023. The auditor's office adds, the agency failed to collect financial information or assess up to $1.6 million in fines.
Rochester-based hospital says Sanford’s misrepresentations have stuck the clinic with the bills; Sanford counters that Mayo is “looking to shift blame for its mistakes.”
An expert Q&A on the challenges facing private equity in healthcare, with a focus on key federal antitrust issues, state regulation of PE health care arrangements, including material transaction notice requirements, and changes to the corporate practice of medicine rules.
NeueHealth will be taken private by its largest shareholder New Enterprise Associates and a group of existing investors in a $1.3 billion deal, including debt, the healthcare provider says. At $7.33 per share in cash, the deal represents a premium of about 70% to the NeueHealth stock's last closing price on Monday. The deal includes a 30-day "go-shop" period that will expire on Jan. 23, during which the company can weigh rival proposals. NEA held a 32.9% stake in NeueHealth, as of Sept. 30, according to LSEG data. NeueHealth's executive leadership team will continue in their roles upon completion of the deal and plan to roll over 100% of their equity interests for newly issued equity interests in the privately held company. Previously known as Bright Health Group, the company renamed itself earlier this year. It operates clinics under the brand names of Centrum Health, AssociatesMD, and Premier Medical Associates.