Merger on Your Mind? Go Ahead, Take the Plunge
Though Deloitte is far from the last word on the prospects of hospital mergers, its findings are that the financial and operational performance for recently acquired hospitals improved more post-deal than their non-acquired peers. This discovery flies in the face of evidence over a longer time period than the Deloitte study, that in using the same metric, less than half of mergers overall are successful. Why I even wrote about that very topic here in this space several months ago, based on another study that looked at hospital and health system mergers and acquisitions.
So two well-respected organizations, with reams of research to back them up have come to two seemingly opposite conclusions. What's the truth?
Likely, both are true, from a certain point of view. The Booz study (PDF) I cited in October looked over a much longer time period than Deloitte's more recent study. While Deloitte examined only mergers that occurred in 2007 and 2008, with information on the success of the mergers until 2010, the Booz study covered 1998–2008.
Assuming better performance in later years, as Deloitte's report suggests, shows that clearly, something has changed in that 10-year time period, skewing Booz's statistics negatively.
What is it? Unfortunately, the answer is not black and white. My best educated guess is that mergers lately seem more strategic—and more necessary, even if they fall through before completion. Systems are taking more chances in order to better prepare for an uncertain future.
- MU Compliance Announcement Sparks Concern, Confusion
- New G-Codes to Pay Doctors for Broad Array of Non-Face-to-Face Care
- Scary Financial Challenges for 2014
- MGMA Urges 'End-to-End' ICD-10 Testing
- 1 in 5 CT Screenings for Lung Cancer Results in Overdiagnosis
- LifePoint Bolsters Presence in Michigan's Upper Peninsula
- Telehealth Improves Patient Care in ICUs
- CMS Sets 2014 Pay Rates for Hospital Outpatient and Physician Services
- Resisting the Healthcare Consolidation Frenzy
- Give Nurses in Wheelchairs a Chance