Medical-care providers are teaming up all over the health care industry to reduce costs and to strengthen their negotiating positions with insurance firms. The trend is particularly evident in the field of anesthesiology, in which smaller groups are quickly realizing the benefits of bigger buyers, including collective bargaining power. Anesthesiologists are also influencing M&A among innovative drug makers. (For more, see the video Regulation Drives M&A, Especially in Health Care.)

As a sign of heightened interest in the medical specialty, investment bank Cross Keys Capital has six anesthesiology practice clients currently under letters of intent with a variety of suitors, plus another six privately held anesthesiology practices on the auction block. The practices are feeling pressure from insurers such as Aetna Inc. (NYSE: AET) and Blue Cross Blue Shield over the lowering of reimbursement rates, explains Cross Key co-founder Bill Britton. Now more than ever, smaller companies are welcoming Mednax (NYSE: MD), TeamHealth (NYSE: TMH) and AmSurg Corp. (Nasdaq: AMSG) as suitors.

Larger groups are in a stronger position to negotiate higher fees with insurance companies, Britton says. They can push for their higher rates over some of the lower reimbursements that companies such as Mosaic Anesthesia & Perioperative Services PC and Memac Associates PC might have received as stand-alone entities in the past. Mednax bought both companies earlier in 2015.

As hospitals look to cut costs, anesthesia stands out as a service that can't be outsourced to offsite third parties, because anesthesiologists need to be present in operating rooms. Advancements in the field can create attractive assets. If physicians consider a new anesthetic a hit, the company that makes it could become a desirable target.

The Medicines Co. (Nasdaq: MDCO) bought all of the shares of Annovation Biopharma that it didn't already own. The goal was to gain exclusive rights to a new anesthetic that may help patients wake up more safely after surgery.

For private equity investors, the early returns on anesthesiologist groups have been favorable, according to Jeff Swearingen, co-founder of Edgemont Capital Partners LP. Swearingen says early exits from private equity firms have been successful, including MTS Health Investors' sale of portfolio company Florida Gulf-to-Bay Anesthesiology Associates to TeamHealth.

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