When lanky Stan Laurel joined with pudgy Oliver Hardy, the pairing was visually odd but they fit together flawlessly. With nearly 80% of healthcare leaders pursuing or planning a merger or acquisition within the next year, according to a recent HealthLeaders Media survey, some of the outcomes will be as unlikely as Laurel and Hardy. But health leaders hope their combinations will work as well.
In our survey, which measures M&A interest among C-suite executives, 59% of respondents say they have a high interest in acquiring physician practices, but after that, the level of interest runs the gamut from acute care to hospice and rehabilitation centers.
It appears healthcare reform has tipped off more than the need for innovative, patient-centric, high-quality care; it has also sparked the torrent of M&A. Organizations are frenetically trying to develop fully integrated healthcare delivery networks in a very short period of time. And it's the need to integrate swiftly, along with the desire to shore up bottom lines drained by a slow economic recovery and reimbursement reductions, that will continue to drive the trend toward more industry consolidation, say industry experts.
Chicago-based Jones Lang LaSalle, a financial firm specializing in real estate, said in a statement that the growing sense of uncertainty from healthcare reform will only build in 2012, which will have an "increasingly significant impact on strategic business plans for healthcare systems, which will spill over into portfolio and cost rationalization activities and the allocation of capital at hospitals across the country."