James Burgdorfer of Juniper Advisory, an investment banking firm presenting at the marcus evans National Healthcare CXO Summit Fall 2013, regarding hospital consolidation trends that are the result of the Affordable Care Act. Interview with: James Burgdorfer, Principal, Juniper Advisory

1. Interview with: James Burgdorfer,
Principal, Juniper Advisory
With the dramatic, ongoing changes
in the healthcare industry, hospitals
are considering their financial,
operating, and market position and
weighing whether it would be best to
become part of a larger organization,
says James Burgdorfer, Principal of
Juniper Advisory, a Chicago-based
investment banking firm. Because of the
inefficiencies inherent in today’s
healthcare industry, for many, the
consideration of a business combination
could be the only way to ensure the
success of certain hospitals.
Juniper Advisory is a solution provider
at the marcus evans National
Healthcare CXO Summit Fall 2013,
in Los Angeles, California, October
20-22.
Why should hospitals consider
Mergers & Acquisitions (M&A)
transactions?
The hospital industry is undergoing
dramatic, fundamental changes as a
result of major healthcare reform
currently underway. Due to its size and
fragmentation relative to other major
industries, vast inefficiencies in the
hospital industry are creating a
downward pull on the US economy.
Even as the Affordable Care Act (ACA)
seeks to address the crisis by driving
down costs, hospitals will face new
challenges as a result of declining
reimbursements and increased
compliance spending.
As costs surge and payments fall,
economy of scale becomes the only
option for success. The formation of
larger and more efficient hospital
companies is one of the clearest
solutions to this fundamental challenge.
How should hospital combinations
be handled?
The M&A process is relatively simple in
concept, yet extraordinarily complex in
execution. A major challenge is the fact
that M&A transactions are non-
recurring. Most hospital CEOs and board
members have not participated in the
sale of a business before and have little
experience with the mechanics of such a
process.
Additionally, relationships between
management and board members have
the potential to become strained under
such pressures.
For these reasons, it is advisable to
involve an experienced transaction
expert to ensure the best possible
outcome and provide the greatest
assurance of success.
What are some of the potential risks
in this unchartered territory?
The risks involved in a business
combination transaction are greater
than any other risk that a hospital CEO
has faced in his or her leadership role.
A decision to sell the hospital must
involve a clear understanding of the
industry landscape, knowledge of the
potential partners, and a grasp of the
needs and objectives of the hospital and
its leadership team.
What growth opportunities do you
see in the industry?
The overwhelming need right now is to
reduce costs and increase efficiencies.
This means that there are tremendous
growth opportunities for companies that
can provide technologically and
medically efficient modes of delivering
healthcare.
Any final words of advice?
There is a traditionally held preference
for local control amongst nonprofit
hospital leadership. Understandably,
there is a strong psychological and
emotional component to a hospital
board that is considering a combination
with another organization. Many do not
want to feel as if they are abandoning
their independence and perceived
uniqueness. The key is to help
leadership realize that looking towards
the hospital’s future is more important
than holding onto the past.
The M&A
process
is relatively
simple in
concept, yet
extraordinarily
complex
in execution
What Hospitals Should Consider in Preparation for the ACA

2. About Juniper Advisory
Juniper Advisory is an independent, privately-held investment banking firm dedicated to providing our hospital industry clients with
expert merger and acquisition (M&A) and other strategic financial advice. We are the only experienced M&A group whose resources
are focused exclusively on this industry. Our business is guiding our hospital system clients through complicated and economically
important change-of-control transactions.
www.juniperadvisory.com
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