New Intelligence Report: Healthcare Leaders Say Affordable Care Act is not the only driving factor behind surge of Mergers, Acquisitions and Partnerships
Press Releases, April 21, 2016
In the new HealthLeaders Media report Strategic Partnerships: Survival in Healthcare, published today, results show that while the Affordable Care Act impacted mergers, acquisitions and partnerships (MAP), it was not the driving force many assumed.
The report, sponsored by Bank of America Merrill Lynch, shows that MAP activity is noteworthy both for the range of influences driving its acceleration, as well as the absence of mitigating factors slowing its proliferation.
Organizations are thinking strategically and indicating that supporting sustainability of the long-term mission is the main reason for considering a merger, acquisition or partnership. These decisions are being made to increase market share within the organizations’ geography, improve position for population health management, and numerous other contributing factors.
This report includes data from a survey of Healthleaders Media’s 8,000-plus member executive research panel. The free excerpt can be downloaded at www.healthleadersmedia.com/executive-insight-center.
“The HealthLeaders Media survey results reflect that M&A and partnerships are an earnest response by U.S. health systems to address the many policy-driven and market forces that are creating a perfect storm of unfunded mandates and complexity,” says Brent McDonald, Managing Director and Head of Strategic Advisory, Bank of America Merrill Lynch.
Two-thirds of respondents (66%) indicated that a main reason for mergers, acquisitions, and partnerships is to support the sustainability of their entity’s long-term mission. Nearly three-quarters of respondents (70%) stated that their care delivery objective is to improve their overall positioning for population health management.
Healthcare leaders who responded to the survey are bullish on the prospects for higher levels of MAP activity—75% say they will either be exploring potential deals or completing deals that are underway in the next 12–18 months.
“What you’re seeing is hospitals and other provider organizations acquiring parts of the rest of the continuum of care so they can more readily control and influence the total cost of care,” says Dave Krajewski, chief financial officer of LifeBridge Health.
Other compelling statistics from the report include:
- Nearly half of respondents (49%) say that they expect the dollar value of the mergers and acquisitions their organization will be pursuing within the next three years will increase.
- The top three entities involved in survey respondents’ most recent merger, acquisition, and/or partnership are health systems (29%), hospitals (25%), and physician practices (20%).
- 70% of respondents say the top financial objective for MAP activity is to increase market share within their geography.
- Surprisingly, responses for retail clinic/urgent care clinic (3%) place well down the list of entities involved in a most recent merger, acquisition or partnership.
About HealthLeaders Media
HealthLeaders Media, a division of BLR, is a leading multi-platform media company dedicated to meeting the business information needs of healthcare executives and professionals. As an integrated media company, HealthLeaders Media includes HealthLeaders magazine, HealthLeadersMedia.com, the HealthLeaders Media Intelligence Unit, HealthLeaders Media LIVE events, and California HealthFax. All these platforms may be found online at www.healthleadersmedia.com.