by Nashville Health Care Council | May 13, 2010

NASHVILLE – At the Nashville Health Care Council’s annual “Financing the Deal” panel discussion yesterday, finance industry executives expressed confidence in the health care sector, noting increased availability of capital and an uptick in mergers and acquisitions activity. Panel members concurred that health reform legislation would have a significant impact on the future of the industry and deal-making trends.

Moderated by Brent Turner, executive vice president, Finance and Administration for Psychiatric Solutions, panel members at today’s event included Robert J. Fraiman, Jr., president and CEO, Cain Brothers; Toby King, managing director, Citigroup; Timothy P. Sullivan, managing director, Madison Dearborn Partners; and Riley Sweat, head of Health Care Investment Banking, Raymond James.

On the topic of health reform, all agreed its passage has had a positive impact on the capital markets and has ended the uncertainty that has hampered market activity for the past year. There was also consensus that the provider industry will benefit from the influx of new patients created by reform.

“The capital is here, the equity market is stronger and private equity is investing again, and the new legislation will result in a tremendous inflow of patients needing care,” Fraiman said.

Sullivan added, “While some things will play out over next couple of years, there will be 30 million more people in the system‚ĶProviders and service providers who focus on delivery of high quality services while consistently reducing costs will be winners, including those who focus on health information technology.”

Sweat agreed, citing inpatient and outpatient providers, pharmacy benefit management as well as companies involved in managing Medicaid and Medicare populations as markets with strong potentials.

King noted potential new opportunities for companies seeking to develop services across the continuum of care, including acquisitions of home health, hospice and other post-acute services, as a means for these groups to more comprehensively control the episode of care.

The panel members were optimistic about increased mergers and acquisitions as the market continues to recover. They also anticipated a continuation in the health care IPO trend started in first quarter of 2010, noting a return to the public market by HCA.

Fraiman addressed the for-profit and not-for-profit provider sectors. “I think we will see a convergence of the tax exempt and non tax-paying systems as we seek ways to pay for the increase in access.”

“Today’s news from the panel promises continuing opportunities for entrepreneurialism and innovation in Nashville’s health care community,” said Caroline Young, president of the Nashville Health Care Council. “Panel members expect increased availability of capital and cite the importance of visionary management and health care expertise to this deal-making, both qualities that are the hallmarks of the Nashville health care industry.”

The Nashville Health Care Council, founded in 1995 as an initiative of the Nashville Area Chamber of Commerce, is an association of health care industry leaders working together to further establish Nashville’s position as the nation’s health care industry capital. For more information on the Council, please visit www.healthcarecouncil.com.