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CVS Health, owner of MinuteClinics, is trying to buy Aetna. Photo: Dina Rudick/The Boston Globe via Getty Images

"Attractive" profit margins and an aging population are the main reasons for the rush of health care mergers and acquisitions, according to a survey of health care and private equity dealmakers conducted by consulting firm West Monroe Partners.

Reality check: Even though health care players say "value-based care" drives their decision-making, the survey is a candid reminder a lot of the industry is driven by making money rather than improving care.

Driving the news: The West Monroe survey of 100 executives found three predominant factors that will make health care companies appealing takeover targets over the next 1-3 years:

  • Attractive profit margins
  • Aging population
  • Overall growth in demand for care

Between the lines: There's no talk here about "patient-centered coordination" or "controlling spending growth." The responses suggest that dealmakers, especially those in private equity, know they can extract profit from companies that get a lot of revenue from government programs.

But not too much: Many companies and buyout firms have balked at closing deals "if a final analysis shows a large portion of government reimbursement" in a target company's finances. Almost three-fourths of respondents said they have walked away from a deal, due in part to the lower rates paid by Medicare and Medicaid.

  • A shortage of quality companies, crazy-high valuations and too much debt also have scared off some parties from acquiring health care companies.

Go deeper

Prosecutors begin closing arguments in Chauvin trial

Steve Schleicher, an attorney for the prosecution in Derek Chauvin's trial, began closing arguments on Monday by describing in detail George Floyd's last moments — crying out for help and surrounded by strangers, as Chauvin pressed his knee into Floyd for nine minutes and 29 seconds.

Why it matters: The jury's verdict in Chauvin's murder trial, seen by advocates as one of the most crucial civil rights cases in decades, will reverberate across the country and have major implications in the fight for racial justice.

Kendall Baker, author of Sports
4 hours ago - Sports

European soccer is at war

Liverpool celebrating its 2019 Champions League victory. Photo: Nigel Roddis/Getty Images

Europe's biggest soccer clubs have established The Super League, a new midweek tournament that would compete with — and threaten the very existence of — the Champions League.

Why it matters: This new league, set to start in 2023, "would bring about the most significant restructuring of elite European soccer since the 1950s, and could herald the largest transfer of wealth to a small set of teams in modern sports history," writes NYT's Tariq Panja.

Dion Rabouin, author of Markets
5 hours ago - Economy & Business

2021's expected earnings blowout begins

JPMorgan CEO Jamie Dimon. Photo: Mark Kauzlarich/Bloomberg via Getty Images

First-quarter earnings so far have been very strong, outpacing even the rosy expectations from Wall Street and that's a trend that's expected to continue for all of 2021. S&P 500 companies are on pace for one of the best quarters of positive earnings surprises on record, according to FactSet.

Why it matters: The results show that not only has the earnings recession ended for U.S. companies, but firms are performing better than expected and the economy may be justifying all the hype.