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COVID Effect: Less than 80 Hospital Mergers in 2020

Analysis  |  By Jack O'Brien  
   January 11, 2021

A new Kaufman Hall report indicated that hospital mergers in 2021 could have an "emphasis on addressing broader societal issues" and focus on a "growing diversity of partners and partnerships."

There were less than 80 hospital mergers in 2020, down from 92 deals in 2019 but still above the decade low of 74 deals in 2010, according to a new Kaufman Hall report released late last week.

The analysis examined the impact of the COVID-19 pandemic on hospital consolidation, noting that the outbreak "did not substantially alter" M&A activity last year.

Notably, seven megamergers took place in 2020, according to the study, up from three such deals in 2019.

While the frequency of provider mergers may not have been affected by the pandemic, the report indicated that hospital mergers in 2021 could have an "emphasis on addressing broader societal issues" and focus on a "growing diversity of partners and partnerships."

The analysis indicated that provider organizations are more inclined to "strengthen intellectual capital resources to be nimbler" during a crisis and pivot to "modes of providing care more efficiently, effectively, or uniquely" compared to traditional market players.

Related: Despite Pandemic, Healthcare M&A Activity Stays Apace

Kaufman Hall stated that telehealth service utilization will likely remain about pre-pandemic levels but added that elective procedures may be "slow in recovering."

The report was released weeks after Kaufman Hall's November Flash Report, which found that declined across most metrics during the month as COVID-19 hospitalizations rose.

Related: 'Difficult Winter Ahead' for Hospitals Amid COVID-19 Surge

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.


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