Throughout the 5 to 10 years preceding the COVID-19 pandemic,
transaction activity in the Physician Practice Management
(PPM) Sector had generally been accelerating. Transaction
activities initially originated from physician service businesses
with a lower percentage of governmental reimbursement and
a higher percentage of selfpay, such as dermatology and dental
services. Eventually, these transactions spread across the PPM
Sector to areas such as gastroenterology, urology, women’s
health, primary care, ophthalmology, and orthopedics. Then, in
March 2020, the COVID-19 pandemic hit, which had a profound
effect on the entire world economy including the PPM Sector.
In a recently conducted survey, Citrin Cooperman and Westcove
Partners sought to capture the pulse of the PPM Sector during
the time of the COVID-19 pandemic. This 65-respondent survey
directed at physician services providers and financial investors
aimed to capture the direct impact of COVID-19 on successfully
consummating transactions, as well as to determine how the
transaction process may have changed (for better or worse).
The Westcove Partners and Citrin Cooperman survey sought to
determine the current deal trends in the PPM Sector, with an eye
towards providing greater visibility to the key issues impacting
both buyers (largely financial investors) and sellers (physician
services providers) as they explore potential transactions. As will
be discussed below, the general sentiment from financial
investors and physician services providers towards pursuing
transactions continued to be positive, particularly after the Spring
and Summer of 2020, with physician services providers seeing
their valuations remain elevated, and the pandemic providing
the jolt needed to consider a sale or strategic partnership.
However, key issues have emerged, which should be taken
into consideration by financial investors and physician service
providers as they look to successfully navigate the PPM Sector
during the age of COVID-19.
