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Q3 2023 Primary Care Update

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Q3 2023 Primary Care Update

Primary care has continued to be one of the most active sub-sectors of healthcare services in terms of M&A activity as both private equity sponsors and strategic acquirers position themselves to effectively capitalize on the shift towards value-based contracting. PCP’s position as the “quarterback” for care delivery, specialist referrals, and preventative care enables primary care providers to effectively drive shared savings.

It was a quiet quarter for new platform creation, but existing platforms have remained active in pursuing add-on investments to bolster their market footprint and increase the volume of covered patient lives. Optima Medical, backed by Trivest Growth, executed three add-on acquisitions across Arizona, which has emerged as an attractive environment for risk-based payor models. On the other hand, Cano Health’s share price has plummeted amidst ongoing concerns of its ability to remain liquid, forcing the platform to divest certain assets. This bears monitoring going forward to understand its impact on the primary care landscape at large.

Provident expects the pace of consolidation to accelerate into Q4 and early 2024, with groups that demonstrated meaningful traction into value-based contracting, ACO membership, or other risk-based arrangements to attract premium valuations. The role of technology for primary care platforms is also expected to grow as the importance of tracking a patient’s journey becomes increasingly critical to understand outcomes, return to hospital rates, and other quality metrics.

Provident recently published a comprehensive Sector Update & Outlook presentation (link below) that provides a robust outline of the competitive landscape, emerging trends, and transaction considerations for operators across the primary care landscape.

To print and download the full Primary Care Update report, please click below…

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