Unlikely Pairings Ahead for 2012 Healthcare M&A

Moreover, the uncertainty may encourage healthcare leaders to plan medical office and outpatient facilities that will help foster better physician alignment, the group says. "Health systems with the capacity and resources see this [expansion into outpatient] not only as a necessary action to adapt to healthcare reform but as a competitive advantage acting as a first mover," wrote the organization in a 2012 real estate assessment statement.

Mark Reiboldt, director of financial advisory services for Coker Capital Advisors, the investment banking arm of Alpharetta, GA-based Coker Group, agrees that healthcare industry M&A will continue in 2012, but he says the targets may be changing.

"[Healthcare leaders] realize the options: they can buy a competing hospital, but that requires hundreds of millions and has to be financed. … So, a lot of [leaders] are going back and looking at their strategic plans and realizing that buying a hospital isn't what's needed. Instead it's, 'How can we shore up our physician alignment and physician relations and fill the gaps and spend just a few million?'," he says.

So the hunt is on to find the right partners to create an integrated network without spending ungodly amounts of capital. This course of action actually began to take flight in 2011. There was a slew of merger and acquisition activity in rehabilitation facilities, laboratories, and managed care, according to Irving Levin Associates, which reported an 11% increase in the dollar value of M&A deals of this type.