Point By Point: Brent Hill Talks Healthcare
This episode of Point By Point was produced prior to the combination of Waller and Holland & Knight.
Morgan Ribeiro: So I'm here with Brent Hill. Brent, thanks for joining me today.
Brent Hill: Glad to be here, Morgan. Thank you.
Morgan Ribeiro: A lot going on across the healthcare industry, a lot of challenges, a lot of opportunities. Of course, in the sector that you are practicing in, mergers and acquisitions, there's certainly a lot of activity. So today we're gonna talk about that: trends that we're seeing across the healthcare industry, particularly as it relates to mergers and acquisitions, what's going on in your practice area, as well as what we're seeing at Waller here in terms of our culture, and recruitment of new folks, and the client service that we're delivering. So to get started, would love just little background on your practice and the work that you do with clients.
Brent Hill: So I'm a healthcare M&A lawyer. I exclusively do healthcare mergers and acquisitions and have been focused exclusively on healthcare M&A for the last 10 to 15 years. I'm in the corporate group here at Waller, but a big part of our corporate group focuses on exclusively on healthcare M&A activity's at an all-time high right now. We're seeing a tremendous amount of volume with healthcare transactions. We're seeing hospital deals, but increasingly, and probably there's more volume in deals outside of the hospital, think of outpatient services, like ambulatory surgery centers, oncology centers, imaging centers, and then the physician services industry, is very much consolidating in multiple practice specialties: orthopedics, vision, gastro, dermatology. And we're seeing some consolidation even in just family practice physicians in the right geographic area.
Morgan Ribeiro: What is driving that consolidation?
Brent Hill: I think it's, it's two factors. I mean, it's pretty much a perfect storm. I'll talk about the physician space for instance. The cost of operating a physician practice are ever increasing with increased cost for healthcare for your employees, increased for technology advances (think about electronic medical records). It's driving physicians to get bigger so they can have more economies of scale. And when you factor that in with private equity, who's very willing to invest in physician services and they've been willing to invest for several years now, but even more so now. And then you take into account just the vast volume of private equity firms out there and the dollars that they have to spend and the money that they have to put to work and their willingness to invest in physician services and other healthcare services, particularly those outpatient services. It drives a lot of transactions.
Morgan Ribeiro: And are there particular sectors that you're working in of physician practices?
Brent Hill: We do. The firm itself, we cover a lot of specialties. I happen to do a lot of radiology deals on the sales side. And on the buy side, we cover many specialties: orthopedics, anesthesia, gastro, vision, just to name a few.
Morgan Ribeiro: And what is driving that interest? You mentioned the private equity firms. Why the increasing interest in healthcare? It's obviously a highly regulated space, but there's obviously upside in that.
Brent Hill: If you look at the healthcare spend of the country and the healthcare's percentage of GDP, and you project that out over the next few decades, healthcare is gonna be a large growing industry for years to come, decades to come.
Morgan Ribeiro: You know, for instance, we do a lot of work in the dental space and it's amazing to me that there's still, you know, they say it's ripe for consolidation. I imagine there's other areas that are still just as fragmented.
Brent Hill: Yeah, there's just thousands and thousands of dentists. And dentists are in a similar situation with physicians. I mean, there is a higher cost to doing business.
Morgan Ribeiro: So a hot topic in your practice area right now, there's an executive order that was issued by Biden. And part of that is kind of increased scrutiny on consolidation across a number of industries, but particularly healthcare. And then another facet of that was around physician non-competes and would love to talk about the first part of that, which is just the increased scrutiny on mergers and acquisitions and consolidating.
Brent Hill: So the, the Biden administration, the executive order basically came out and said that, to try to boil it down, is that consolidation could be anti-competitive. When you're talking about highly-paid professionals who are getting set up in a business and getting trained how to run a physician practice or a surgery center and they're getting introduced to patients and building a full practice at the expense of their employer, that's one thing. More importantly, where I'm really concerned about it is, is non-competes in the context of a sale of a business. That's a completely different value proposition because any buyer of a business expects the seller of that business, not to compete with the business, they just bought and paid a multiple of earnings for, for a substantial period of time, up to five years, maybe longer, depending on the given business. And if the government, the various agents where it's the FTC or the DOJ is gonna take a position that non-competes are not enforceable in the context of a sale of business, that's gonna be pretty devastating on valuations. It's gonna have a chilling effect on consolidation. The private equity firms that are funding these acquisitions, they're not gonna be so eager to buy a business when there's some substantial likelihood that the seller could compete with them in a reasonably short period of time.
Morgan Ribeiro: So, you know, I wanna switch gears over to some of Waller's healthcare practice and I find it really interesting. We've been recognized as a firm by a number of outside organizations and third parties like Chambers and particularly our healthcare and our M&A practices. Recently, BTI group recognized you and several other attorneys for our client service in the M&A space, which was really impressive. I think the list that we were on, we were by far, there were firms that have 2000 or more attorneys and, you know, Waller with our 275 on the list. So it's really impressive. I think that in that case it was really the clients sharing their feedback.
Brent Hill: Yeah. That's why it was what was most gratifying for me is that those recommendations or that recognition was from client surveys that we didn't prompt. We didn't even know about it.
Morgan Ribeiro: So I think what's really interesting is we're, you know, we have a strong reputation out there, we're recognized by our clients. Why, why is that? How would you describe our, our clients service and why clients like to come to Waller, particularly as it relates to their healthcare matters?
Brent Hill: So I think it's one, our commitment to exemplary client service, and that means being responsive, being available, and being dedicated to knowing and understanding a given client's business. Second, and I think, and this is just as important, we try to be very practical in providing legal advice. We are the law firm that tries to help clients accomplish their end goal. And part of that is just being available, being willing to take that call at nine o'clock at night or 10 o'clock at night, or texting with clients. You know, that's been more and more clients would prefer to text than do anything at this point. But I think that's about availability and taking the time and making the effort to understand a client's needs.
Morgan Ribeiro: So if I'm a prospective client or a prospective recruit even, what makes Waller unique?
Brent Hill: One thing, and it's always impressed me from the first day I got here, is just the client roster. We're a middle market firm where most of our lawyers are here in Nashville. We have, obviously, we have a good presence in Austin and Birmingham and in Chattanooga too, but just being in the middle market where we are, and being able to do the sophisticated work we do for the top of market clients for whom we work is it's very gratifying.