Envision expanding physician services, selling non-core assets — 5 key notes

Nasdaq reports Envision Healthcare is in the midst of expanding its core physician service business, while selling off non-core assets.

Here's what you should know:

1. After its acquisition of AmSurg, physician services account for 81 percent of Envision's core revenues.

2. Envision recently announced it would divest its American Medical Response business to KKR & Co. in a $2.4 billion transaction.

3. Nasdaq reports Envision is "optimistic about the physician services market which is witnessing consolidation." Nasdaq attributed several factors to Envision's optimism including:

  • Clinical integration
  • Value-based care
  • A lack of scaled physician practices and supply of physicians
  • The Medicare Access and CHIP Reauthorization Act of 2015
  • Increasing regulations

4. Nasdaq said Envision is taking an inorganic approach to growth. The company acquired nine physician practices in the first half of 2016 for $440.8 million.

5. The only potential drawback to this approach is the high associated debt. Envision announced plans to use a portion of the funds from the divestiture to reduce debt.

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