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The healthcare market in the United States is undergoing tremendous changes. These changes, sparked by cost pressures brought on by both the government''s Medicare program and corporate sponsored private healthcare insurance, has encouraged a rapid consolidation strategy in both the insurance and healthcare provider segments of the market. The combined pressure of rising healthcare costs, corporate premium competition, and Medicare''s inability to raise reimbursement rates has created a difficult environment for health insurers to generate profitability. Everest Healthcare Services may or may not be at a crossroad. It will be difficult for students to determine whether or not this is the appropriate time for a merger with Fresenius Medical Care. If the timing is right, what should Fresenius pay for Everest and how should the company''s debt be included or excluded from the purchase price.