Hospital merger and acquisition volumes increased 20% from Q2 to Q3 2013, according to a recent press release by Irving Levin Associates. The 24 deals announced in Q3 represent the highest quarterly deal volumes in the last four quarters of activity, indicating that while hospital merger and acquisition activity may have peaked at 94 deals in 2012, the national trend of consolidation continues.
As outlined by Heath Leaders Media,merger pace among large, mega-systems is slowing, but deal volume is projected to grow in the smaller independent hospital, health system, and post-acute care markets through 2014 as the presence of large systems makes it more difficult to remain viable.
As was the case with the recent consolidation activity that led to the formation of large regional and national health systems, health care reform continues to be a key driver of consolidation as health care organizations seek out alliances to manage the challenges created or heightened by reform initiatives such as low margins, access to capital, increased competition, population health management, and physician recruitment and alignment. The appeal of partnering varies based on market dynamics, state regulatory mandates, and other factors, but the imperative to seamlessly coordinate care across the continuum means that affiliations and partnerships will dominate the health care landscape this year, including the behavioral health care, home health/hospice, long-term care, and rehabilitation sectors.
How are you seeing these consolidation trends play out in your market?