Merger on Your Mind? Go Ahead, Take the Plunge

Philip Betbeze, for HealthLeaders Media , May 31, 2013

The Deloitte study also points out the increasing interest in acquisitions of hospitals not only by for-profit chains, but also by venture capital funds and other nontraditional acquirers, whose allegiance to shareholders outweighs any other influence.

Value creation, therefore, is now a central reason for mergers to take place. In healthcare it hasn't always been so high on the list of measured "outcomes" from a merger, if you will. Deloitte notes a significant difference in financial performance when the acquisition is by a national chain rather than a local or regional one.

Sure, increased merger success of late has something to do with the increased rigor, scale, and, yes, on accountability being forced on what has been largely a nonprofit industry for the past 100 years or so.

Whether they're designated for tax purposes as nonprofits or not, profits matter for every hospital—a lot—and hospitals are getting a lot better at extracting it. Especially those, it seems, who serve shareholders first. Whether that's good or bad for healthcare is another discussion.

Philip Betbeze is senior leadership editor with HealthLeaders Media.
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