Why Financial Success Eludes Majority of Healthcare Mergers
Essentially, it means the healthcare industry overall is reactive right now, when it really needs to purposeful and strategic, says Booz partner Sanjay Saxena, who has advised on many mergers both inside and outside the healthcare industry.
"You see someone for sale, and suddenly there's a frenzy of activity concerning whether to go after them," he says. "If you look outside the healthcare industry, companies are very purposeful, and have acquisition playbooks with lists of other companies they want to buy."
This all sounds obvious, he says, but healthcare doesn't have this type of metrics-driven future game planning. In part that's because historically, the industry has not had to compete on value the way others have.
But it's not as if healthcare mergers are short on metrics. After all, these are transactions that are debated and deliberated all the way from the local newspaper to the board level, to the community, and even to the legislative level.
Detailed financial documents are shared among the parties before acquisitions are final. So how do so many fail to achieve the synergies many of the new partners love to boast of when an acquisition is announced?
- CMS Sets 2014 Pay Rates for Hospital Outpatient and Physician Services
- FDA hopes hospitals will switch to newly regulated pharmacies
- Not-for-Profit Hospitals Find Opportunity Amid Uncertainty
- The 5 Biggest Healthcare Finance Trouble Spots
- The Most Polarizing Topics in Healthcare IT
- New G-Code to Pay Doctors for Broad Array of Non-Face-to-Face Care
- Why You Should Involve Patients in Nursing Handoffs
- How CPOE Will Make Healthcare Smarter
- States Rejecting Medicaid Expansion Forgo Billions in Federal Funds
- Safety Net Executives Renew Call to Preserve DSH Payments