Hospital Deals are Part of Growing Consolidation Trend, Say Analysts

Cheryl Clark, for HealthLeaders Media , March 26, 2010

The Detroit and Massachusetts deals, Pascaris says, "are a signal of what we discussed in that Outlook article. There are forces in place contributing to more consolidation in the industry, and we think healthcare reform contributes to that."

Steve Weiner, an attorney and chairman of the national health law practice at Mintz Levin, says private equity companies are a likely place for health industry nonprofits to look for money.

"The interesting thing for me is you now have sophisticated private equity capitalists thinking that hospitals are an investment risk worth taking," he says.

And the reverse is true for nonprofit hospitals, he says.

"If I have to be in a position better to compete for patients who are covered by insurance, I want to look better, offer more services, and I want to be able to compete in a very different marketplace," Weiner says. "To do that really requires having sources of capital to add services and facilities. It means consolidation. And looking at private equity sources of capital."

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