Health plan acquisitions target small- to medium-sized companies
Submitted by seachange on Tue, 2010-08-10 04:59.
Analysts say Medicaid-heavy health plans also will be especially attractive to private equity firms and others. Emily Berry, American Medical News, August 9, 2010. As a newly reformed health system takes shape, private equity firms are eyeing investments in health plans. "Private equity funds are out to make money, to invest money, and they've got money they want to put to work now," said Chip Clark, partner in the provider care sector in Ernst & Young's North America Transaction Advisory Services practice. The practice, among other services, advises corporate clients on merger and acquisition strategies. ... Health
Out to Make Money
The Patient Protection and Affordable Care Act (PPACA) has provided expanded investment opportunities for the private equity firms. Two of the greatest opportunities include: 1) consolidation through acquisition of small and medium-size health insurance companies, and 2) takeover of Medicaid contractors in an environment of expanding programs in cash-strapped states. As Ernst and Young's Chip Clark says, "Private equity funds are out to make money, to invest money, and they've got money they want to put to work now." Health care money managers very understandably have always placed business first, even if it harms patients and the original sources of payments - be it individuals, employers or government. Instead of giving us a financing infrastructure that placed patients first, PPACA has greatly expanded the business opportunities for the money managers. This theme is getting old. - Don McCanne, MD, Physicians for a National Health Program