M&A Interest Still Strong
Qualify for a free subscription to HealthLeaders magazine.
This article appears in the January 2012 issue of HealthLeaders magazine.
Look for mergers and acquisitions to remain strong in 2012 and for physician groups to remain at the top of almost everyone's must-have list. Some 78% of healthcare leaders say they will have deals under way or will be exploring deals in the next 12–18 months, according to the 2012 HealthLeaders Media Healthcare Mergers & Acquisitions Survey. Only 21% have no M&A activities planned. Physician practice acquisition is of high interest to 59% of the respondents.
The level of M&A activity surprises Kevin Gross, who is president of the Oklahoma division of for-profit Ardent Health Services in Tulsa. "I knew there was a lot going on, but 78% is surprisingly high. That means four out of five are doing something." He suggests that uncertainty could be driving some of the M&A activity.
As healthcare reform is implemented, it's no longer business as usual. Hospitals and health systems are expected to improve patient outcomes, meet new quality standards, and master new payment models while they contend with reduced government reimbursements. "It's a difficult time and place. Everyone wonders how they will navigate through the next couple of years and where they will be in 2013."
As they explore M&A, healthcare leaders say they are sticking with the tried and true. Some 65% say their M&A strategy is to look for properties that will strengthen their existing geographic markets.
A similar approach is being taken with physician practice acquisitions. Some 52% of respondents want to acquire practices that strengthen existing services lines.
- How Top-Ranked MA Plans Earn Their Stars
- Readmissions: No Quick Fix to Costly Hospital Challenge
- How Hospitals Can Become 'Upstreamists'
- 4 Ways to Lower the Cost to Collect from Self-Pay Patients
- House Calls Key to Pioneer ACO Success
- How Telehealth Pays Off for Providers, Patients
- 4 Tips for Managing Employed Physicians
- Defensive Medicine Still Prevalent Despite Tort Reform
- WellPoint Dominates Nearly Half of Markets, AMA Says
- 'Overtreatment' Debate Circles Back to Lung Cancer Screening