Hospital M&A: Beginning of a New Frontier?
Imagine reading the following headlines five years ago:
- Six multi-billion dollar NFP-to-NFP health system mergers announced over past 12 months.
- Consolidation activity involving large community hospitals and regional health systems doubles.
- Only one transaction by a publicly traded FP acquirer not named HCA Healthcare in the calendar year; divestitures by FP increased fourfold.
- For the latest year, the number of transactions involving academic medical center (“AMC’s”) transactions doubled.
While it may be hard to fathom how quickly the industry has changed, all of these statements are realities of today’s hospital mergers and acquisitions (“M&A”) landscape. Together, they are contributing to a hospital M&A environment that is very different than past years and warrants considering whether the industry as a whole has entered a new frontier. In order to better understand the realities of the current market, we have identified a number of key themes that are driving the activity occurring between both not-for-profit (“NFP”) and for-profit (“FP”) health systems.