Greenberg Advisors, a revenue cycle management-focused investment bank, has released data regarding RCM merger and acquisition activity and trends in 2016.
Here are six takeaways.
1. RCM deal activity increased 47 percent in 2016 over the year prior, with private equity buyers and private equity-backed strategics completing 69 percent of all deals, according to Greenberg Advisors.
2. Brian Greenberg, CEO of Greenberg Advisors, attributed the growth in RCM deals to "the many organic and inorganic growth opportunities present in the healthcare market today."
3. Greenberg Advisors said RCM M&A activity overall in 2016 was the result of consumerism of healthcare, outsourcing trends by providers and the need for technology solutions to help providers improve efficiencies and reduce costs.
4. In 2016, RCM deal value increased by more than 300 percent, according to Greenberg Advisors.
5. The increase in RCM deal value was fueled in part by a handful of multibillion dollar deals, the investment bank said. "Blockbuster deals may grab the headlines but the majority of the year's deals were under $25 million. That said, we saw a 56 percent increase in deals trading for $100 million or more, so the larger deals are definitely out there and trading," added Mr. Greenberg in a news release.
6. Greenberg Advisors expects RCM deal activity in 2017 to meet or exceed that of 2016. The investment bank said it primarily believes this because provider consolidation has forced vendors to offer greater capabilities, and further growth and change is expected in healthcare. Mr. Greenberg added in the release, "The market and the players have a tremendous opportunity in this highly pivotal time for providers, payers and the patients they serve."
Greenberg Advisors plans to publish its 2016 M&A Update next week analyzing M&A activity among RCM vendors.