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September 21, 2023

Uncertainty Creates Opportunities in Health Care Investment

Uncertainty Creates Opportunities in Health Care Investment
by Nashville Health Care Council | May 15, 2012

NASHVILLE – One year after a history-making public offering by Nashville-based HCA, the health care market continues to make news as the country slowly emerges from a recession. An audience of 300 Nashville Health Care Council members heard from top investment experts at the organization’s annual Financing the Deal panel discussion only blocks away from some of the nation’s leading health care industry headquarters.

Speakers noted that while opportunities exist for efficient and innovative business models, national health care policy discussions are driving caution in the mergers and acquisitions landscape. The future of health reform, the pending Supreme Court decision related to reform and November presidential elections ranked high among the panel’s concerns.

A veteran center of health care entrepreneurism, Nashville concentration of diverse health care industry companies positions the city well to adjust, noted moderator and Healthways Chairman Emeritus Tom Cigarran. “Nashville companies have the experience and creativity to find new opportunities in a rapidly changing industry. The city has earned its reputation for successful innovation in the health care sector from the number of ventures that were created here and thrived here when faced with challenging market conditions.”

“Over the past year, the health care industry’s presence in mergers and acquisitions activity has grown as CEOs look for ways to keep abreast of health care reform regulations and anticipate the changes that may be in store for the future. In particular, we see the health care information technology sector as a critical component of health care cost reduction,” said Galen Partners Managing Partner David Jahns.

“Opportunities for mergers and acquisitions are ripe as the health care industry changes to react to price pressure, payment reform and the need for new capabilities,” said J.P. Morgan Managing Director Ravi Sachdev. “Considering these factors, the growth in hospital M&A is not surprising given the need for facilities to be more efficient in the face of anticipated reimbursement cuts and, of course, reform.”

Hospital mergers and acquisitions reached at 10-year high in 2011, signaling increased interest in management systems.1 “Many small and rural providers, including hospitals and senior care facilities, are looking to a national level to manage through improving, but still difficult, times,” Jefferies and Co. Global Healthcare Co-Head Jon Santemma agreed. “The resources of a larger organization can allow these providers to focus on patient care and hand the needed capital to management.”

Nashville has seen a number of large deals in the past year beyond the private equity-backed HCA public offering, including the $3.8 billion purchase of HealthSpring by Cigna, Blackstone Capital Partners $3 billion acquisition of Emdeon that took it private, the relocation and rapid expansion of Acadia Healthcare and Vanguard Health Systems IPO.

Not all sectors are planning for the unexpected. “The push for innovation in the health care industry has opened new doors in life sciences,” said Santé Ventures Managing Director Doug French. “As we learn more about the factors we can anticipate, like chronic diseases, work is being done to bring new solutions to those areas.”

“Nowhere else is better positioned to anticipate and react to these challenges than Nashville’s health care industry,” said Council President Caroline Young. “With more than 40 years of unrivaled expertise and a nurturing business environment, Nashville’s both established and emerging companies will lead the way in innovation.”

About the Nashville Health Care Council

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. Worldwide, Nashville’s health care industry generates more than $70 billion in revenue and over 400,000 jobs, and is Nashville’s largest and fastest growing employer. For more information on the Council, please visit


1 According to Irving Levin and Associates, Inc., 86 hospital mergers and acquisitions deals were completed in 2011.


Photo credit: (c) 2012, Paul Wharton, Nashville.

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