TeamHealth to buy IPC Healthcare to expand to post-acute care
By Amrutha Penumudi
(Reuters) - TeamHealth Holdings Inc TMH.N agreed to buy IPC Healthcare Inc IPCM.O for $1.4 billion to gain exposure to the Medicare bundling program and take on more medical staff for supply to nursing homes in the United States.
The deal will allow TeamHealth, which provides contract workers for emergency rooms and hospitals, to expand into IPC's specialist area of post-acute care, such as nursing homes and assisted-living facilities.
IPC's shares touched a record high on Tuesday, trading just below the offer price at $79.57. TeamHealth's stock was down 3 percent.
TeamHealth's merger with IPC comes at a time when the U.S. healthcare system is moving toward a value-based reimbursement system through the Medicare bundle payment program.
Traditionally, Medicare makes separate payments to providers for each individual service over the course of treatment. The "bundled payments" initiative aims to link payments for multiple services during an episode of care.
TeamHealth is now in a position to bundle up its services and build a full-service presence across the entire care continuum, from emergency care and anesthesia management to specialist services and post-acute care, Leerink Partners analyst Anagha Gupte said.
The healthcare system has seen a major consolidation among hospitals and doctor practices. Kindred Healthcare Inc (KND.N: Quote) bought Gentiva Health Services last year, while Skilled Healthcare Group Inc SKH.N bought privately owned Genesis HealthCare.
Health insurers have also hopped onto the bandwagon with two big-ticket mergers in July, along with medical device makers and other suppliers, which are also combining rapidly. Continued...