Am Law 100 firm Polsinelli, widely recognized as one of the nation’s preeminent firms for health care law, today issued a white paper titled “Health Care ‘Prime’ – Ascension of Telemedicine.” The report, issued by Polsinelli’s Health Care M+A Practice, provides an in-depth analysis of the effect that the recent explosion of telehealth and telemedicine will have on the future of the health care industry and related investor activity in the sector.
The Health Care M+A Practice’s first Health Care “Prime” white paper, published in October 2018, focused on mega-deals to illustrate six key themes and outcomes being implemented through mergers and acquisitions and innovation activities, serving as change agents to remake the nation’s health care industry. Its second Health Care “Prime” white paper, published in July 2019, evaluated the proliferation of large combinations of health care providers to form “supergroup” structures that will play an increasingly important role in the health care delivery ecosystem. A third Health Care “Prime” white paper, published last year, focused on the role of systematic health care mergers and acquisitions in remaking the industry’s future. Then, in April 2021, a fourth Health Care “Prime” white paper was published expanding on the strategy for value creation through Systematic Health Care M+A specific to inorganic growth within the home care industry.
“Through this new, fifth Health Care Prime white paper, we are using our four-part, patient-care-centric conceptual framework of health care organization, ownership, delivery and payment to explore how the COVID-19-spurred explosion in telehealth and telemedicine will serve as a powerful agent of change in the delivery of health care,” said co-author Jon Henderson, a Dallas-based shareholder, chair of the firm’s national Corporate and Transactional Practice Group and co-lead of the firm’s Health Care M+A Practice. “Telehealth and telemedicine are influencing a new medical practice model that incorporates virtual services. The unconventional mergers and acquisitions focusing on telehealth and telemedicine are being used to expand investors’ portfolios strategically by including innovative health care services that will likely continue to thrive even as we return to a semblance of normalcy post-pandemic.”
“As a result of COVID-19, health care providers were forced to adapt to a ‘new normal’ that consequently fostered a newfound interest in the health care sector among investors who would have previously overlooked it,” said co-author Paul Squire, a New York-based shareholder and member of the firm’s Health Care Alignment and Organizations Practice Group. Squire recently joined Polsinelli and draws on more than 30 years of health law experience, including previously serving for four years as general counsel of the nation’s largest telemedicine company. “This shift, along with patient preference and choice coupled with lower costs, will have a profound impact on the continued evolution of a new medical practice model incorporating virtual health services.”
The full white paper is available for download here. White paper co-authors also include Polsinelli associates Madeleine Kline and Jerica Steward.
The key points of the white paper’s analysis include an exploration of telehealth and telemedicine and their impact on the conceptual framework of ownership, organization, delivery and payment. Specifically, telehealth and telemedicine have the potential to reshape the medical practice model, thus making health care services attractive for investment.
Ownership and Organization
Given the increased rate of return on investment due to lower costs, and in light of a structure that incorporates environmental-and social-governance factors, telehealth and telemedicine have become increasingly attractive to startups, technology companies, medical providers, and venture capital and growth equity funds by offering potential to create value for ownership. Significant, diverse investment activity in telehealth and telemedicine is notably evident in 2020 deals, providing new ownership and investment models unlike those previously seen in the health care industry. Virtual primary care models are also on the rise, not just as a supplement to brick-and-mortar practices, but instead as a replacement model that offers a comprehensive suite of preventative clinical services.
One of the more obvious appeals for telehealth and telemedicine is that they offer greater accessibility for the innovative delivery of health care services, including the ability to be scaled more quickly with fewer barriers than in brick-and-mortar care settings. Many of the merger and acquisitions deals of 2020 created comprehensive services to clients, establishing a convenient resource for accessing health care services.
Upending the legacy fee-for-service model, which has historically received harsh criticism, telehealth and telemedicine instead contemplate an industry where a value-based payment model could be the preferred model. Telehealth and telemedicine also have implications for reform of telemedicine reimbursement parity laws to place equal value on in-person and digital health care services, and they better link providers and payors to establish a more collaborative system.
The conceptual framework for Polsinelli’s continued analysis of the health care ecosystem’s rapid evolution and predicted future state includes four key areas of focus, as noted above in the structure of this latest white paper: ownership, organization, delivery and payment. The potential implications for each of these focus areas were first profoundly noticeable to Polsinelli’s Health Care M+A Practice in the announced formation in 2018 of a new health care company by Amazon, JP Morgan and Berkshire Hathaway (the “Amazon Venture”) – thus the series of white papers with the moniker, “Health Care ‘Prime.’” The title also recognizes a double meaning of “prime,” because the future state of health care will be more optimized, in the view of the authors. The disbanding of the joint venture, later named Haven, was announced by its founders in January 2021.
Long recognized as a leader in health care law, Polsinelli was recently named the largest Health Care Law Firm by the American Healthcare Lawyers Association (AHLA) for 2021. The firm has earned a Tier One ranking in Health Care Law by U.S. News & World Report’s “Best Law Firms” each year since 2014.
Polsinelli has also long prioritized two of its leading integrated practice areas – mergers and acquisitions and health care regulatory. In meeting client needs, the firm has built a deeply experienced, market-leading industry niche Health Care M+A Practice. The deal lawyers in this practice provide the firm’s health care industry clients with complex transactional advice regarding mergers and acquisitions, investments, majority and minority recapitalizations, and joint ventures and strategic alliances, among other deals shaping the future of health care in America.
Polsinelli is an Am Law 100 firm with 900 attorneys in 21 offices nationwide. Recognized by legal research firm BTI Consulting as one of the top firms for excellent client service and client relationships, the firm’s attorneys provide value through practical legal counsel infused with business insight, and focus on health care, financial services, real estate, intellectual property, middle-market corporate, labor and employment and business litigation. Polsinelli PC, Polsinelli LLP in California.