Articles and Blogs

The nation’s fifth-largest health system operator, Advocate Health, has developed a new strategy of cutting costs through staff attrition (rather than layoffs) and has delayed some capital projects. In response to recent economic challenges, Advocate also said it will reduce its leased space footprint by about 65% over the next four years. In the... READ MORE

Fannie Mae published an Economic and Housing Outlook Report highlighting the possibility of a modest recession being “pushed back” from Q2 to the year’s second half. The report points to the Silicon Valley Bank and Signature Bank failures as an early sign of moderate economic contraction that is expected later this year. According to... READ MORE

The Federal Reserve raised interest rates by another 25 basis points, bringing the Fed’s benchmark target to between 4.75 and 5%, the highest since September 2007. The increase poses challenges for hospitals, particularly for providers with lower credit ratings as they look to borrow funds, complete construction projects and control labor costs. Data from NIC MAP Vision... READ MORE

VMG Health released its 2023 Healthcare M&A Report. The report mentioned the following: ASC transaction volume is expected to be strong as large operators continue to acquire smaller operators; Diagnostic imaging center transaction volume has been declining; Acute care hospital transaction volume has been relatively flat; Dental and eye care transactions make up a... READ MORE

Following on the heels of similar efforts in Florida, North Carolina, South Carolina and Tennessee, the West Virginia Legislature passed CON legislation that exempts hospitals (inpatient services), ambulatory services and birthing centers from the need to obtain a CON. West Virginia Governor Jim Justice is expected to sign the bill into law. The City... READ MORE

President Biden released his proposed budget for fiscal year 2024. The $6.9 trillion budget includes a number of health care and real estate proposals. In terms of health care proposals, Biden would like to make Affordable Care Act subsidies permanent, give federal health care agencies more power to negotiate drug pricing for high-value generic... READ MORE

U.S. Senators proposed a bill that, if passed, would open the door to more physician-owned hospitals. The bill removes the Affordable Care Act’s ban on creating and expanding physician-owned hospitals. Georgia’s Senate passed a bill (which was previously highlighted in the 2/20/23 Briefing following the bill’s introduction) that exempts rural hospitals from the state’s... READ MORE

JLL’s Valuation Advisory group released its 2023 Healthcare Investor Survey and Trends Outlook. Among the report’s highlights: Cap rates have risen 50 bps and are likely to continue upward until the middle of 2023; medical office occupancy has ticked back up since 2020, making MOBs the largest investment opportunity in 2023; and the shift... READ MORE

Medical Properties Trust will lease its $1.2 billion Utah hospital portfolio to CommonSpirit Health following CommonSpirit’s acquisition of Steward Health Care System’s Utah operations. Centura Health will manage the facilities, and the lessee will have the option to purchase the facilities at the higher of FMV or MPT’s gross investment at 5, 10, and... READ MORE

CVS Health announced plans to buy Oak Street Health for $9.5 billion in cash. Oak Street Health is a large primary care provider with 160 locations. CVS plans to grow the Oak Street business to 300 locations by 2026. Tower Health is planning to sell 17 urgent care centers in the coming months. The... READ MORE