Unlikely Pairings Ahead for 2012 Healthcare M&A

"It's a lot more complex, more capital-intensive, and riskier to buy a big hospital," adds Reiboldt. "You run into more FTC ruling with anti-trust concerns. Conversely [organizations] can look at a smaller opportunity, like shoring up outpatient, and it undergoes less scrutiny and can be a significant, positive financial hit for them."

Where and Who to Watch
Although mergers and acquisitions have taken place nationwide over the last three years, the geography may narrow in 2012. Organizations in and around urban and metropolitan areas will most likely see the majority of activity, says Reiboldt. Deals will be concentrated in the Southeast, Northeast, Pacific Northwest, and parts of the Midwest.

"There are not a whole lot of incentives to do a deal in California, for instance, because it's so highly regulated versus in the Southeast," he says.

The relationship between physicians and hospitals is changing. "The burden of providing primary care has become so high on the physician practice … that it's limited physicians' alternatives. In order to survive [the practices] either close or work for the hospital," says Reiboldt.

On the part of hospitals and health systems, "There have been a lot of different [employment] models, but more and more we are seeing professional service agreements and less-restrictive joint ventures. I think we'll see even more of that as hospitals evolve away from the thinking that they have to be 'in charge' of everything," he says.

A Laurel and Hardy–type merger that healthcare leaders might see in 2012 is not-for-profits pairing with for-profits. For instance, a not-for-profit health system could join with a for-profit surgery center. "We're seeing a trend where for-profits are trying to get smarter and more targeted on where they are spending capital," Reiboldt says.