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Hospital Merger Activity Continues to Increase

Hospital merger and acquisitions continue to increase, including a notable rise in transactions among large healthcare providers, according to an analysis of industry activity by Kaufman, Hall & Associates LLC.  In the first quarter of 2017, hospital and health system transactions increased 8 percent from 25 to 27 compared to the first quarter of last year, according to a news release from the firm.

“The increase follows another year of continued growth, with transactions climbing from 66 announced deals in 2010 to 102 in 2016. The overall trend illustrates that healthcare organizations across the country continue to seek new efficiencies and capabilities for a transforming industry,” it states. “The first quarter was particularly notable for an uptick in transactions among large organizations, with three announced deals targeting organizations with nearly $1 billion or more in revenues. 2016 saw four such deals announced in 12 months.”  Additional transactions among the larger organizations are expected.  

“Hospitals and health system executives are looking for strategic opportunities to ensure the continued growth and success of their organizations amongst disruptive forces, including innovative competitors, declining payments, flat or decreasing inpatient volumes, and increasing price sensitivities among consumers,” said Anu Singh, managing director at Kaufman Hall, in the news release. “As the number of independent hospitals declines, organizations are seeking to build new capabilities and economies of scale through partnerships.”

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