Mergers and acquisitions in the health care sector are expected to be robust in 2018 and continue to grow based on strong activity in the market, and trends such as the shift to value-based care models. According to the Corporate Advisory Solutions (CAS) fourth quarter 2017 newsletter (https://bit.ly/2KjAn9R), at press time, mergers and acquisitions in the revenue cycle management sector have “remained consistent and we anticipate seeing a high level of activity in 2018.
Technological advances will dominate the conversation for RCM companies and health care providers. 2017 required health care organizations to respond to several challengaes and transformative trends, including the political landscape change, growing role of technology, and shift to value-based care. USCB America’s recent merger and acquisition of RevSolve Inc. and J&L Teamworks, two health care-related industry leaders, is an example of this trend and how to stay ahead in the competitive marketplace.
RevSolve, a Scottsdale, Ariz.-based company formerly known as Collection Service Bureau Inc., is led by Chris Becraft. The ACA member company founded in 1964 was rebranded as RevSolve, a firm that prides itself on being “the best-in-class revenue solution for health care providers,” according to a press statement on the merger and acquisition released by the USCB America.
J&L Teamworks, also an ACA International member company, was established in 1990 in Lodi, Calif., as a receivables management services firm that works with hospitals, medical groups, clinics and physicians. The company, which was previously privately owned and managed by two business partners, is now part of USCB’s family of employee-owned companies.
“In today’s fast-paced and competitive environment, it becomes critical to look for avenues to retain tenured and successful employees and to broaden the services offered to our business partners,” said Albert Cadena, USCB America’s CEO and president. The companies worked with CAS, a merger and acquisition advisory firm and ACA International member based in Philadelphia, throughout the process.
“In my almost 20 years of providing M&A advisory services to the outsourced business services sector, I have not seen a better fit culturally and operationally than what exists between RevSolve and USCB America,” Mark Russell, managing partner at CAS, said in a news release on the merger. Cadena said the merger with RevSolve and J&L Teamworks was the opportunity he had been seeking.
“I have been searching for a merger/acquisition with companies who specialize in the health care side of our industry for the last eight years or so,” he said. “This was a direction and a goal we needed to move forward with in order to continue to be competitive in the marketplace, acquire talented employees and also to expand our geographical presence.” Cadena added that the decision to seek agencies to merge with was motivated by needs of his clients in the health care space.
“Health care providers are seeking a partner to provide an array of services in revenue cycle management,” Cadena said. “We also saw in the industry that smaller companies were seeking for an exit strategy and the expectations from the health care receivable side were making it difficult for some to compete.” Meanwhile, Becraft shared his resolution for the future of the company.
“In deciding the next chapter of our 53-year-old company, we looked for a partnership that could bring further depth to our health care revenue cycle services, a commitment to expand our presence in Arizona, and a culture that complements ours and that of our clients,” Becraft said. “We nailed every criterion. We are also proud to now be a 100 percent employee-owned company as part of this merger, which is a tremendous benefit to current employees and a huge competitive advantage to acquiring the best talent for the future.
Our staff are really in top spirits about all of it. As employee owners, they have a chance to have more than just a career; they own part of the business.” Like USCB America, RevSolve was also reviewing its strategic direction for the past few years and how it could capitalize on opportunities available through working with health care provider clients.
“We too needed to be larger, but more importantly, we need to be able to offer a deeper stack of revenue cycle services to our current and prospective clients,” Becraft said. “We had a lot of criteria that included market facing objectives, but also internal ones such as how can this help our employees grow in their careers with the company.”
With this in mind, RevSolve was faced with three choices, he said … “develop the services ourselves, acquire other companies or merge with a complementary company.” And, according to Becraft, the merger makes sense given the same trend is going on in the health care market. “Health care providers are merging at breakneck speed and their needs are growing ever larger and more complex,” Becraft said.
“The most successful revenue cycle companies are expanding their relationships across multiple lines of services with their clients.” RevSolve and J&L Teamworks join a host of proud Employee Owners at USCB America, who offer a full enterprise of health care revenue cycle and management solutions, according to the press release from USCB. USCB America has been in business for over 100 years and has been an employee-owned company for almost two decades.
“In both J&L and RevSolve I have seen positive feedback for all the employees, as always the unknown is on the minds of all, and it’s up to USCB to continue on its path of bringing [us] all together as one family,” Cadena said. “I have seen a lot of employees excited about growth opportunities and the options to possibly transfer to other office locations.”
When asked his advice for other companies considering a merger, Cadena said start by taking a look at your long-term goals. “For us it was to strengthen our family of companies and to continue to provide excellent service to our current and future clients,” Cadena said.