Hospital Mergers Just Keep Getting Bigger

Consolidation of hospitals slowed a bit final yr however the measurement of the offers was of the “mega-merger” selection during which even the vendor had $1 billion in annual revenues, a new analysis shows.

Consulting agency Kaufman Hall’s analysis of 2021 mergers, acquisitions between hospitals and well being methods reveals “the variety of transactions was down however the measurement of the transactions was up.”

“Eight of the 49 transactions introduced in 2021 (16.3%) have been ‘mega mergers,’ during which the smaller associate or vendor has common annual revenues over $1 billion,” Kaufman Corridor mentioned. “This was practically double the share from 2020 (8.9%) and the best in six years.”

Among the many extra notable offers within the report concerned one of many nation’s largest investor-owned well being methods in Tenet Healthcare, which offered 5 hospitals and affiliated physician practices in south Florida to Steward Well being Look after about $1.1 billion, doubling the dimensions of “Steward’s presence” within the state, the consulting agency mentioned.

However Kaufman Corridor mentioned the variety of offers falling is partially associated to “fewer impartial, unaffiliated group hospitals looking for partnerships.”

“Organizations are centered on partnerships with a powerful strategic rationale and have grow to be more and more selective in figuring out potential companions,” Kaufman Corridor mentioned in its report. “They search partnerships that can have a transformative influence by means of the addition of recent capabilities, enhanced mental capital, and entry to new markets or companies.”

To make sure, the development of accessing new markets through merger is already anticipated to roll from 2021 into 2022.

Take the merger introduced final month between to huge suppliers of most cancers therapy. Metropolis of Hope is buying Most cancers Therapy Facilities of America for $390 million to develop nationally past its southern California base in a transaction anticipated to shut early this yr.

Metropolis of Hope mentioned the acquisition expands “the portfolio, attain and influence of Metropolis of Hope’s modern most cancers companies and capabilities, together with analysis and improvement, into extra communities throughout the nation.”