2015 M&A Forecast 'Cloudy'

John Commins, December 29, 2014

As provider affiliations have become more nuanced than simple bricks-and-mortar acquisitions they are thus harder to track, quantify, and predict.

Consolidation in the hospital sector is a trend that most observers believe will continue as providers adapt to value-based care, population health and capitated payments.

What's not so clear is what form this consolidation will take and how fast the hospital sector will move in that direction in the coming year.

Brett Hickman, a partner and healthcare deals leader with PwC, notes that mergers and acquisition volume for U.S. hospitals declined by 58% in the first three quarters of 2014, when compared with the same period in 2013.

However, Hickman says, that decline comes with caveats because provider affiliations have become more nuanced than simple bricks-and-mortar acquisitions and are thus harder to track and quantify.

"What is happening now is a lot of what I call convergence deals, things that may not show up on publicly reported data, and what I will call private industry deals, a lot of stuff in the physician space," Hickman says.


3 NC Health Systems Form Shared Services Organization


 

These affiliations are being led largely by management service organization models, clinical integrations, and joint ventures.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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