Poll responses from 245 healthcare executives shed light on the industry’s accelerated pace of consolidation. Below are five key findings from the HealthLeaders 2016 Mergers, Acquisitions, and Partnerships Survey.
1. M&A SHOWS NO SIGNS OF SLOWING DOWN
A notable 75% of respondents said they are exploring, or in the process of completing, deals over the next 12-18 months. Rigorous government mandates, reimbursement penalties and new technology requirements are just a few of the pressures driving this activity.
2. CONSOLIDATION IS MISSION CRITICAL
The majority of executives said sustaining their organizations’ long-term mission is their primary reason for consolidation. The survey also found 55% seeking to expand market share, while 49% want to improve scale. Only 19% are looking to raise capital.
Head of Healthcare Strategic Advisory
Bank of America Merrill Lynch
3. HOSPITALS ARE ADDING COMPETENCIES, EFFICIENCY AND SCALE
The right transaction can help healthcare organizations pursue their care delivery objectives. According to respondents, positioning for better population health management is the top goal, followed by efficiency improvements, clinical integration, and cost containment through scale.
4. CLINICAL INTEGRATION AND PATIENT ACCESS ARE ESSENTIAL STRATEGIES
From physician practices to health plan competencies, respondents expressed interest in pursuing a broad range of organizations to help them meet community health access needs.
5. LOOK FOR AN INFLUX OF NONTRADITIONAL, COMPLEX DEALS
Healthcare organizations will seek alliances, collaboration, clinical integration networks and joint ventures, as opposed to conventional mergers. These arrangements may include payer initiatives, clinical partnerships, and joint administrative efforts, such as revenue cycle, supply chain and EHR services.
- Hospitals are pursuing consolidation strategies to meet government regulations and market challenges
- Healthcare organizations are turning to innovative, complex collaborations to drive network growth
- Consolidation will continue as hospitals strive to expand clinical coverage and make care more accessible