- A recent report found that financial stability and margins improved for nearly half of rural hospitals after a merger, acquisition or affiliation with a larger system. More than a quarter of rural hospitals currently have negative operating margins.
- As inpatient stays shorten, providers are shifting capital investments from acute-care hospital facilities to outpatient construction or long-term acute-care facilities. Large outpatient investments in 2024 included over $1B by HCA, $760M by Jefferson Health and $500M by Tenet.
- Senior housing development is slowing due to constrained capital. However, some experts see opportunities in the areas of (a) middle-market communities, particularly rehabilitating older or distressed properties; (b) active adult communities; and (c) “niche communities” such as those being built by Disney and Margaritaville.
- An article highlighted the “5 deals that defined hospital M&A in 2024” to include: (a) Steward Health Care’s bankruptcy-related transactions; (b) General Catalyst’s purchase of Summa Health; (c) Risant Health’s acquisition of Cone Health; (d) the JV among Baylor, Memorial Hermann, Novant and Providence to form Longitude Health; and (e) the terms of purchase by Yale New Haven Health of Prospect Medical.
- A study by Oregon Health & Science University found increased housing and food insecurity among Medicaid and Medicare recipients during the COVID-19 pandemic, which also correlated with poorer health outcomes. Oregon’s Medicaid program now provides rental and utility assistance to beneficiaries.
- CMS released significant revisions to its nursing home surveyor guidance, including requirements for COVID-19 vaccine education, opioid and psychotropic prescribing and medical director responsibilities. The guidance goes into effect February 24, 2025.
- The global ambulatory surgery center market is expected to grow from $115B in 2022 to $191B by 2030, driven by the shift to outpatient procedures. According to a recent report, ASCs reduce U.S. health care costs by $38B annually.
- Minnesota’s nursing home trade groups are suing the state over new holiday pay rules requiring 150% pay for workers on 11 state holidays. The trade groups argue the rules impose financial strain, particularly as nursing homes in the state cannot raise rates without legislative approval.
- Concord, MA’s municipal Select Board is considering a policy that would require non-profits in the city to pay 25% of the taxes they would owe if taxed as commercial properties, potentially raising $1.5M per year. The payments would cover services like public safety and public works. Non-profits own half of the town’s non-taxable property, valued at $488M.
- As senior living operators and developers seek to close the industry’s supply gap by way of new construction in 2025, a recent article highlighted the importance of alignment with capital partners. The piece noted that this often involves seeking non-traditional capital partners and tolerating extended development timelines due to conservative lending conditions.
For more information on real estate matters, please contact:
- Andrew Dick at adick@hallrender.com or (317) 977-1491;
- Joel Swider at jswider@hallrender.com or (317) 429-3638; or
- Your primary Hall Render contact.
Special thanks to Olivia Allison, undergraduate intern, for her assistance in preparing this article.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
