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M&As to Continue with Smaller Deals

Rene Letourneau, for HealthLeaders Media, October 28, 2013

"From a finance perspective, there are a number of ways we are exploring financial improvements, including increased use of technology, supply purchasing, shared best practices, and other operational efficiencies that will benefit the organization and patient services," he adds.

Smaller M&A Deals Expected in 2014
While the Baylor and Scott & White merger is one of several transactions between major players this year—including Tenet Healthcare Corp's purchase of Vanguard Health and Community Health Systems' purchase of Health Management Associates—Lisa Phillips, editor of healthcare data research firm Irving Levin Associate's Health Care M&A News, doesn't expect to see many big mergers and acquisitions deals in 2014.

"It's easy to say [there will be] more of the same, but I don't think we will see more multi-billion-dollar deals in this sector next year. Perhaps one, but not more," Phillips says, noting that the Tenet/Vanguard and Community Health/HMA deals represent a total value of $11.9 billion.

Deals at that value level "probably won't be repeated next year," she told me.

What Phillips does expect to see is robust consolidation activity among small health systems and stand-alone hospitals.

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