American Medical Response Acquired for $2.4 Billion

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It’s official: private equity firm KKR is purchasing American Medical Response. The $2.4 billion acquisition is the latest addition to KKR’s growing list of healthcare portfolio companies.

Turns out the recent buyout, combined with similar purchases, is a new direction for George Roberts and Henry Kravis, co-CEOs and co-chairmen of KKR. Just last month, the firm also acquired online health publisher WebMD. And in a separate deal, the private equity giant also obtained a majority stake in Nature’s Bounty.

So what does it mean? It means that investors see the value of the healthcare industry and expect it to grow in the near future.

KKR's actually been at it for a while when it comes to investing in healthcare. Two years ago they also bought Air Medical. According to Reuters, “the merger with American Medical Response (AMR), the largest U.S. provider of ambulance services, would allow KKR's Air Medical Group to easily substitute costly helicopter flights with ambulances for shorter trips.”

Together, Air Medical and American Medical Response will transport an estimated five million patients every year. As of now, Air Medical and American Medical Response services are available in 46 states. But who’s to say they won’t expand that to all 50 states soon?

It’s easy to see why KKR and other private equity firms are investing in healthcare. After all, it's a safe bet. As management consultant firm Bain & Company puts it, the healthcare industry has a “proven resilience to economic turbulence.” Maybe that’s why last year the deal value for healthcare private equity reached $36.4 billion, the highest level since 2007.

In a recent article published in Forbes, contributor Todd Millay gave his thoughts on why healthcare stocks are hot right now:

“The long-term fundamentals of the healthcare sector compare favorably to the broader market. The sector has superior earnings-per-share growth—the key driver for long-term equity returns. The healthcare sector also has a higher and more stable return on equity than the broader market. Healthcare stocks have traditionally declined less than the overall market in downturns.”

It makes sense, given that everyone needs healthcare and it will always be in demand.

Living Healthy: Knowing Your Key Indicators

I often ponder the thought that each of us is unique, both in body and mind. Yet we continually make mass generalizations of what is “right” or “wrong” for our health, without any respect to individuals. Of course, there are things that are generally good for most people, and I can understand why we fall into the habit of applying those truths to everyone. But I think the single most important key to living a healthy life is knowing your unique situation.

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"Health is a relationship between you and your body."

For example, my workout buddy and I run together several times a week and attend exercise classes one to two times per week. She also lifts weights and does core strength training at home. She stretches every morning, as well as before and after our runs and classes. I would like to say I am as vigilant as her, but I’m not—which is part of the reason she is more fit than I am.

But though she has a stronger core and body in general, she is constantly hurting herself. Not the pushed-too-hard kind of hurting. The “I sat down and now my back is tweaked out” kind. She is a thousand times more careful than I am, yet she is always getting injured.

Another friend has cut most carbs, grains, and sugars out of her diet because when she eats them more than occasionally, she finds that she puts on extra weight. I have been on a low-carb, low-grain, and low-sugar for the better part of a year and it doesn’t affect my weight at all.

One of my roommates can’t eat or drink anything with aspartame in it because it gives him bad migraines. I also get migraines, but aspartame doesn’t have that affect on me—but alcohol does, if I drink more than one. He can drink several and not end up with a headache.

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"Self knowledge is no guarantee of happiness.
But it is on the side of happiness
and can supply the courage to fight for it."

I think as we grow, we learn more about ourselves, and sometimes that includes learning about our health. But too many people rely on the doctor when they are feeling down and out rather than proactively managing their health. I read about an interesting program the other day that is coming out of Henry Kravis’ company, Kohlberg Kravis Roberts. It works with employees to help them recognize and understand their own key health indicators and better manage their health.

Now, I’m lucky enough to have health insurance, but there is certainly no program like this that helps me understand my health. What’s my normal blood pressure? No idea—they never tell me so I assume it’s normal. It’s things like that which I should know but don’t.

What do you think? Is it our doctors’ jobs to essentially fix us when we’re sick, or should they be working to help us understand our own health? Do you know of any other programs out there like KKR’s that work with employees to do this? I’m interested to find out what people know and want to know about their own health.