What are mergers and acquisitions in healthcare?

Healthcare organizations pursue merger and acquisition (M&A) deals for many reasons, including increased capacity, economies of scale and improved productivity. HealthTech brought together a panel of IT leaders to discuss how they’ve navigated the often winding, low-visibility paths that lead to M&A success.

How mergers and acquisitions may impact the healthcare system?

The reasoning is that more providers make for greater competition and therefore lower prices. Mergers may affect delivery and availability of services as hospitals work toward greater efficiency in cost control. When efficiency becomes the goal, employees may become redundant, with staff layoffs a possibility.

Why have mergers and acquisitions played such a big role in the healthcare marketplace?

These acquisitions lead to higher prices to physicians because hospitals can negotiate higher prices for their employed physicians than the physicians were getting in small practices.

What happens when hospitals merge?

When individual hospitals merge into larger systems, they gain a larger share of the consumer health market. That puts them in a position to ask health insurance companies to pay more for medical care and procedures. These higher prices are not borne by the insurers, but by consumers in the form of greater premiums.

Why are hospitals merging?

The reasons behind hospital mergers are multitudinous, but the rationale at the forefront can be summarized by support in bearing the financial risk in emerging value-based payment systems, as well as clinical standardization to reduce cost and improve quality. Smaller hospitals are readying themselves…

What is hospital merger and acquisition?

Hospital merger and acquisition (M&A) activity has increased significantly in the past decade, with buyers and sellers looking to create operational, strategic, and financial value. A main driver is the pursuit of economies of scale, the ability to decrease unit costs, or to improve productivity and outcomes through increased volumes.

What is health care merger?

Healthcare Mergers and Acquisitions (HealthcareMA) is a mergers and acquisitions advisory firm engaged by private companies to sell or divest a business or service line that no longer fits the company strategic plans, or individuals that are looking to exit the market within a short time period – The Sell Side.