The scope — and complexity — of the consolidation mania underway in the health care sector continued this week as AmSurg's efforts to merge with TeamHealth Holdings were rebuffed.

Both companies went public with statements this week.

Under outpatient-surgery center provider AmSurg's stock-and-cash merger proposal TeamHealth shareholders would get AmSurg stock at an exchange ratio of 0.768 AmSurg shares per TeamHealth share. They would also receive $11.49 per share. The estimated value of the deal is $7.8 billion, according to The New York Times.

In its letter, TeamHealth, a physician services organization with more than 14,000 affiliated doctors, stated that this is the same proposal that its Board of Directors previously reviewed, considered and rejected.

Part of the issue is the TeamHealth integration of its recent $1.6 billion acquisition of short-term care provider IPC Healthcare, "which is on track to close in the fourth quarter," said Michael D. Snow, president and chief executive officer of TeamHealth.

"The integration of IPC is a critical element of our plan and we will not compromise that effort. We commend your completion of the Sheridan acquisition, but as evidenced by our 35 year track record of successful acquisitions, we have ample expertise and resources to ensure the successful integration of IPC," he noted in his letter to AmSurg's President and CEO Christopher A. Holden.

AmSurg thinks this is the time to get bigger, despite its own integration challenge, having just acquired physician outsourcing service Sheridan Healthcare in 2014, for $2.3 billion.

But that previous deal is a plus, thinks Holden.

“We believe AmSurg’s successful acquisition and integration of Sheridan can serve as a roadmap for the partnership with TeamHealth," he noted in his public statement about the proposed merger.

"The financial performance of AmSurg since closing that transaction has exceeded our initial public guidance on every metric," he added, "Engaging now also gives us the opportunity to further enhance shareholder value by optimizing the financing of the AmSurg/TeamHealth and TeamHealth/IPC transactions, and could decrease aggregate financing expense by $100 million to $150 million.”

The merger, he argued, would be a "true partnership" that would instantly create "an extensive national geographic footprint."

TeamHealth's Snow certainly concurred on the assessment of the market opportunity, just not with the need to merge. "We agree with your observation that the physician services sector, and the health care industry more generally, are experiencing significant consolidation," he wrote to Holden. "While we can certainly understand why AmSurg would find a combination with TeamHealth appealing in such an environment, we are well positioned to independently seize advantageous transaction opportunities that may arise over time."

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