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M&As to Continue with Smaller Deals

Rene Letourneau, for HealthLeaders Media, October 28, 2013

"The obvious driver is the Affordable Care Act and the changes it requires in the economics of delivering healthcare. That in turn is driving hospitals and health systems to seek greater economies through scaling up, partnering, or merging with other hospitals or health systems," she says. "One-off deals will continue to happen as the ACA's full effects kick in."

Phillips also predicts that next year's most vigorous healthcare M&A action will be in post-acute care settings as hospitals and health systems work to improve their ability to provide care outside of the hospital setting and to reduce their readmission rates.

"Hospitals that have already merged or aligned with other systems and have secured the physicians medical groups that they need will turn their attention to the post-acute care side of the delivery system," she says. "I think we'll see more deals in the home health and hospice, skilled nursing facilities, rehabilitation, and behavioral healthcare sectors as health systems try to nail down their end-to-end care continuums."

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