VCU Health System has recently completed its acquisition of Riverside Tappahannock Hospital, a 67-bed facility in the upper Middle Peninsula region of Virginia that's part of the broader Riverside Health System.
As part of the agreement finalized in October, several related services – diagnostics, physical therapy, the Riverside physician practices in Tappahannock, Warsaw, Aylett and Callao – as well as Tappahannock Urgent Care (MD Express), will also become part of VCU Health in 2021.
Financial terms of the deal were not disclosed.
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WHAT'S THE IMPACT?
In a statement from VCU Health, the systems maintained that patient care at the local level will remain intact, but will benefit from expanded services connecting people to experts in specialized care at VCU Massey Cancer Center, VCU Health Pauley Heart Center and the VCU Medical Center.
In that regard, the systems are promising better access to local services, with the hope that they will eventually increase preventive care, thereby improving health outcomes. Dr. Tom Yackel, president of MCV Physicians, VCU Health's faculty practice, said another benefit will be seamless access to Richmond-based services, with more streamlined care coordination between local providers and specialists.
According to Virginia Business, Riverside employees will transition to VCU Health System on July 1, remaining on Riverside's payroll until that time.
Patients will continue being able to see their same doctor, and over the next several months VCU expects to add providers and practices to increase access to care. Providers will accept the same insurance as before the transition.
As part of the move, VCU will adapt the Epic Electronic Medical Record System, which is currently used by Riverside, to aid in continuity with patient records. People will be able to see doctors who specialize in heart health, cancer and transplants. Yackel said the hospital will add more services locally, including more specialty procedures. Highly specialized services such as open-heart surgery or transplant will still occur at VCU Medical Center in Richmond.
The team is currently working with research clinicians to establish VCU Health Tappahannock as a site for clinical trials in the future.
Riverside Health System operates five acute care hospitals, including RTH, a behavioral health hospital and a physician rehabilitation hospital. VCU Health encompasses Virginia Commonwealth University's health sciences academic programs, the VCU Massey Cancer Center and the VCU Health System, which includes the VCU Medical Center, Community Memorial Hospital, Children's Hospital of Richmond at VCU, MCV Physicians and Virginia Premier Health Plan.
THE LARGER TREND
So far this year, healthcare merger and acquisition activity has been down, primarily as a result of COVID-19. The second quarter of 2020 saw M&A activity drop 20% from the first quarter and 34% when compared to Q2 of 2019, according to Irving Levin Associates.
Not only were there fewer mergers and acquisitions in Q2, but the ones that did occur were worth less than those in Q1 2020 and Q2 2019, according to S&P Global Market Intelligence. The aggregate transaction value of the M&As in Q2 was $12.26 billion, compared to $29.31 billion in Q1, and $137.29 billion in the second quarter of 2019.
Despite Q2 being the lowest quarter as far as M&A activity in five years, analysts at Waller and Kaufman Hall predict that the pent-up M&A activity from the pandemic will "very likely" cause a surge of M&As moving into 2021. They predict that M&As will be particularly active among small and independent hospitals looking to partner to stay afloat.