Hospitals and health systems continued scooping up physician practices in 2019, while practices offering certain specialties caught private equity interest, according to VMG Health's 2020 "Healthcare M&A Report."
Six key takeaways:
1. The most popular acquisition targets for PE firms in 2019 were ophthalmology, optometry and dermatology practices. While deal volume was higher for these specialties, the transactions tended to involve groups with fewer physicians compared to other specialties.
2. PE transactions involving emergency medicine specialists had the highest median number of physicians acquired, with 34. Orthopedics represented the second-highest median number of physicians acquired, at 27.
3. Hospitals and health systems remain active acquirers of physician practices. From 2012-18, the number of hospital-owned practices increased at an average annual growth rate of about 12.3 percent.
4. The number of hospital-employed physicians rose at an average annual growth rate of about 17.5 percent from 2012-18.
5. Hospitals today own at least 31 percent of physician practices, according to estimates.
6. Hospitals typically pursue acquisitions of specialties with high ancillary revenue, such as cardiology, orthopedics and gastroenterology.