April 12, 2017

M.D. medical group M&A activity jumps in Q1

Physician medical group mergers and acquisitions activity surged in the first quarter of 2017 to the largest number of quarterly M&A transactions in years, according to new acquisition data from HealthCareMandA.com.

There were 48 physician medical group acquisitions in the quarter, a 78 percent jump from the 27 publicly announced acquisitions in the fourth quarter of 2016, and a 109 percent increase from the 23 announced deals in first quarter 2016. Nine of the acquired medical groups had 20 or more physicians.

All but one of the transactions did not disclose a purchase price, according to HealthCareMandA.com. The one large acquisition was Optum's purchase of Surgical Care Affiliates for $3.277 billion. Optum is a subsidiary of UnitedHealth Group.

According to HealthCareMandA.com, hospitals and/or health systems announced seven physician medical group acquisitions in the first quarter, while private equity firms announced seven. Those don't include transactions announced by physician medical groups backed by private equity firms.

"Physicians are quickly realizing that not affiliating with larger entities, whether health systems or large medical groups, is going to make the practice of medicine more difficult in the future," said Lisa Phillips, editor of the Health Care M&A Report, which publishes the data.

All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of HealthCareMandA.com. Norwalk-based Irving Levin Associates Inc. publishes the research reports and maintains databases on the health care and senior housing M&A markets.

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