A clear trend has emerged in the health care industry: Mergers and acquisitions of health care firms have slowed year over year.
Though home-based care M&A showed “signs of life” in Q3 2024 in what has otherwise been a relatively quiet year thus far, transaction volume was still down last year, according to a report from M&A advisory firm Mertz Taggart.
An estimated six hospice deals took place in Q3 of last year, with six home health and 11 home care also completed, Mertz Taggart reported. Private equity transactions represented half of these deals. A total of 30 hospice transactions were completed in 2023, compared to 19 deals as of the end of 2024’s third quarter, the report found.
Dr. Julia Frydman, senior medical director at Nashville-based Thyme Care, runs its palliative care wing. She believes palliative care may be inoculated against that industry trend.
“As the health care industry moves from fee-for-service to value-based care, we are seeing more risk-bearing providers, like health plans, primary care groups, or oncology practices that take on risk, make more of an investment in palliative care programs,” Frydman said.
Thyme Care specializes in oncology care, and according to Frydman, the company is a value-based care enabler with a focus on comprehensive “wrap-around” services for patients living with cancer. Wrap-around services encompass a suite of possible patient needs, from transportation or financial problems to housing needs.
Seen in that light, the support Frydman has seen for palliative care programs makes sense. Her program aims to prevent critical and expensive medical issues from emerging.
“How can we make sure that people living with serious illnesses are given the information they need about their disease that prevents surprises in their disease trajectories that increase psychological and physical suffering?” Frydman said.
Frydman says what has been slow in the industry is the movement from fee-for-service to value-based care in oncology.
“As we see that continued progression and the incentives are better aligned in value-based care programs, I think there will be even quicker movement on the early integration of palliative care,” she said.
Frydman says value-based care focuses on paying for interventions that will drive good outcomes for patients.
“Making sure that they get early palliative care is one of those things, making sure that their transportation needs are taken care of because transportation is connected to their health outcomes,” she said. “It is a health payment model in which you’re not paying for each individual service but rather thinking holistically about patients.”
As palliative care demonstrates its effectiveness in treating patients and controlling some costs, Frydman has seen insurance companies evolving toward paying for palliative care.
Driving the evolution are two factors. One is the growing view of palliative care as a preventive health service.
At the same time, personalization of health care is growing. The idea of a one-size-fits model is growing less popular.
“Health care is becoming more focused on what patients prioritize for their own health and giving them an opportunity to participate in shared decision-making,” Frydman said. “That’s what palliative care aims to do for people living with serious illness and their caregivers.”
That growth isn’t short-term, either.
“I think that we have an aging population with increasing complexity, and we have to continue to make investments in early palliative care to ensure that people are getting the care that they want as they see various specialists as they come in and out of hospital or acute settings,” she said. “Palliative care alongside primary care alongside their primary treating provider, like an oncologist, is going to become that extra layer of continuity and support that’s needed.”