Why Financial Success Eludes Majority of Healthcare Mergers

Hospital mergers are dicey business propositions.

You probably knew that either instinctively or through experience, but now there's plenty of data to back up the contention. According to a Booz & Company analysis, only 41% of all acquired hospitals outperformed their market two years after the deals were consummated.

Here are the particulars of the study: Booz analyzed a representative sample of 220 hospitals that were acquired between 1998 and 2008 for which pre and post-transaction hospital performance data was available.

They calculated changes in operating income andoperating margin for the acquired hospital over the period two years before the transaction and two years post transaction.

OK, so what does it all mean?