Hospital Mergers Created Larger Systems in 2014

A new survey by Kaufman Hall, a health care consulting firm, indicates that hospital mergers and acquisitions came at a rapid rate in 2014. While the 95 deals that occurred in 2014 were down slightly from the 98 that occurred in 2013, they still represent a trend in growing numbers of mergers within the last several years. Since 2010, there has been a 44 percent increase (66 in 2010, 95 in 2014).

Those mergers and acquisitions in 2014 came in all shapes and sizes. For example, the largest hospital system in Illinois, Advocate Health Care, announced a merger with NorthShore University Healthsystem this past September. While the merger is still waiting to be approved by the Federal Trade Commission, it would create a new hospital system featuring 16 facilities and nearly $7 billion in total revenue.

Ever since the Affordable Care Act was approved in 2010, hospital consolidation has been on the rise. This is due in large part to the law mandating that hospitals transition to a system that rewards hospitals for good outcomes rather than continuing to operate in a fee-for-service model that had long been in place in America’s health care facilities.

Additionally, strains on finances have made it simply make sense for hospital groups to merge together and streamline their operations. With hospital occupancy rates on the decline and with hospitals getting less reimbursement through Medicaid and Medicare, money is tight. Many hospital executives have gone on record as saying that mergers allow their facilities to stay in the black and be able to offer more services to their patients.

For strong legal representation during a merger or acquisition, consult the team of respected New York attorneys at Buttaci Leardi & Werner, LLC.

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  • Posted on: Apr 14 2015