SC&H Capital, the investment banking and advisory arm of SC&H Group, an accounting and consulting firm based in Sparks, Maryland, has launched a joint venture with Healthcare Management Partners and I3 Health Consulting. The joint venture will seek to serve the strategic and financial needs of the healthcare industry, which is currently being challenged by the Covid-19 pandemic.
SC&H Capital – a provider of expertise in M&A, valuation, bankruptcy & special situations, and capital raising – previously worked with both of the consulting firms on numerous projects in the healthcare industry over the last 10 years, including several hospital investment banking projects.
“We know each other’s abilities and respect each other’s deep commitment to quality,” said managing director Ken Mann, whose distressed M&A team Equity Partners recently joined SC&H Capital. “Together, our groups have led large healthcare organizations through complex restructuring efforts, uncovered solutions to save organizations and jobs, and consolidated entities to meet the needs of the patients and communities they serve.”
Mann and the SC&H Capital team bring decades of experience in financing and mergers and acquisitions to the venture. Baltimore-based I3 Consulting brings expertise in hospital management and consulting, with service offerings in strategy, operations, project management, revenue cycle optimization, technology, and credentialing. Nashville-based Healthcare Management Partners delivers services in turnaround, financial advisory, receiverships, litigation support, interim management, and benchmarking, with particular experience in the area of skilled nursing facilities.
“In the complex and highly regulated field of healthcare, if you don’t understand the intricacies of the industry, you’ll fail. If you don’t understand distressed M&A, you’ll fail at helping troubled organizations. Working together, especially now, makes us an incredibly effective team,” said Robert Heacox, cofounder of I3 Healthcare Consulting.
Financially strained healthcare organizations needed strong advisory support before the pandemic hit. The impacts of the crisis have felled financially weaker organizations, while also hammering previously stable ones.
Rural hospitals have seen particular hardship. They have been collapsing for years as local populations have declined, with approximately 170 rural hospitals having shut down since 2005, according to The New York Times. I3 Consulting has in the past worked with numerous small and rural hospitals, which were struggling with issues of scale and payment collection.
But even well-positioned hospitals will struggle with the financial impact of the pandemic, which has resulted in lost revenue due to postponement of elective procedures, visits, and tests.
Meanwhile, skilled nursing and assisted living facilities have been at the epicenter of the outbreak, and face issues with litigation and substantially increased operating costs.
According to Mann, many healthcare organizations will need the right expertise, data, and resources to stay solvent in the challenging time ahead.
“We believe that we are the only service provider that brings the full spectrum of expertise to a troubled healthcare organization,” Mann said. “This combination of deep experience in management, operations, and finance, including mergers and acquisitions, provides the client with the benefit of collaboration between the disciplines to determine and execute the best path forward.”