- A remarkable 90% of survey respondents reported construction delays, according to National Multifamily Housing Council’s latest quarterly construction survey, with permitting and start delays being the main culprits. A lack of availability in construction financing is also a rising concern. 76% of respondents said that they have experienced deals repriced up over the last three months.
- Brookdale Senior Living’s share value jumped almost 20% after the announcement of a potential sale of the company. Brookdale operates more than 674 senior living communities. While the final decision to sell has not been reached, there has been speculation that the buyer could be a private equity firm or a major healthcare REIT such as Ventas or Welltower.
- Dialysis player Fresenius is expanding into early-stage kidney disease treatment and drug development to prevent and slow chronic kidney disease. The company’s expansion into earlier care includes services that will integrate new drugs that have been shown to improve the conditions that lead to kidney failure.
- HCA is selling 3 Tulane, LA-based hospitals to New Orleans-based LCMC Health for $150M plus a $220M capital commitment. This sale creates a duopoly for hospital operators (Ochsner and LCMC) in the New Orleans area market which has only been done once, making it attractive for antitrust attention from the Louisiana AG.
- Seven-hospital system Pipeline Health filed for Chapter 11 bankruptcy, citing “skyrocketing labor and supply costs, decreased ability to generate revenue and delayed payments from various insurance plans for critical patient care services already delivered.” The plan is to remain open and operating while focusing on gaining financial stability. The pipeline is a for-profit system that runs seven safety net hospitals in California, Texas and Illinois.
- Encompass Health announced a JV with Piedmont to build a 40-bed IRF facility in Athens, Georgia. The hospital will care for patients recovering from debilitating illnesses and injuries including strokes and other neurological disorders, brain injuries, spinal cord injuries, amputations and complex orthopedic conditions.
- A Health Affairs essay estimates that around 15% of total U.S. medical spending is administrative waste (est. $570B), meaning spending that does not contribute to health outcomes in any discernible way. These “wastes” take the form of insurance-related expenses as well as general business overhead, taxes and credentialing costs.
- Colorado Springs’ decision to lease a hospital system to UCHealth has been “a smashing success,” per the Colorado Springs Gazette. The lease resulted from three years of debate on whether to sell the city-owned hospital system to either a group led by its management at that time, competitor Centura Health or for-profit hospital chains, or lease it to UCHealth, which was backed by voters. Under the terms of the lease, UCHealth has to return all real estate and equipment in good working order at the end of the lease, spend at least $17 million a year on capital projects and make certain charitable contributions.
- The FTC is investigating one of the country’s largest anesthesiology providers, U.S. Anesthesia Partners, over whether it has amassed too much power in some regional markets through acquisitions. Private-equity firms have acquired specialty health care providers because their work is often high-volume and high-margin, and smaller groups can be combined to form larger networks that have more leverage with hospitals and insurers.
- Behavioral health operators are positioning themselves to lease instead of own real estate in order to maximize capital spending. The operators are wanting the impact of their capital to be spent on providing care rather than trying to own the land itself.
- The Medical University of South Carolina’s Shawn Jenkins Children’s Hospital and Pearl Tourville Women’s Pavilion are attempting to change the medical design landscape by creating more spaces for families to connect within the hospital. “We wanted an environment where people felt like they belonged—in a place where no one wants to find themselves,” said Mark Scheurer, M.D., the Medical University of South Carolina’s Chief of Children’s and Women’s Services.
Special thanks to Thomas Dziwlik, undergraduate intern, for his assistance in the preparation of this article.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
