Transaction Due Diligence
Hospital and physician practice transactions continue as a key growth strategy for healthcare services organizations to extend their footprint for access to care and expand market share competition. With executing mergers, acquisitions, or any other type of transactions involving healthcare entities, due diligent is one of the most critical pieces of a deal process and the likelihood for achieving long-term success. There are many variables an organization must consider in pursuing and executing a successful transaction, and it is common for the parties involved in a deal to focus primarily on the economic terms and deal structure.
Due diligence, therefore, can often become more of a process that essentially is just checking items off the list. The problem with this approach is there a higher probability of potential issues that one or more of the parties involved may have slipping through the cracks. Further, failing to maximize efforts in the due diligence stage can also mean that the parties are potentially missing out on the opportunity to identify and pursue significant prospects for enhanced value returns, which often result from a dynamic and comprehensive due diligence program.
We advise hospitals, health systems, medical groups, investors, and other healthcare entities on transactions. A key area of value to our clients is in facilitating comprehensive transaction due diligence. In our approach, there are two over-arching categories: compliance due diligence and operational/financial due diligence.
We view due diligence as a multifaceted organism where the consultant must understand both the quantitative and qualitative aspects of a transaction. We use sound quantitative market data as the foundation for any analysis. Then, we apply our knowledge of the specific dynamics of the situation and our healthcare industry knowledge and expertise to formulate our final deductions. Our conclusions and recommendations assist organizations as they strive for compliance in today’s evolving healthcare market.