May 31—Hospitals acquired as part of a merger or acquisition in 2007 or 2008 significantly improved their profit margins—with results varying according to when deals were done and whether the deal involved a national chain versus a local/regional player—according to a new report from Deloitte. 

The report, which analyzed 101 acute hospital sector mergers and acquisitions occurring in 2007 and 2008, found that the financial and operational performance for acquired hospitals improved post-deal more than that of non-acquired peers during the same period. However, most acquired hospitals’ performance stayed below their peers’ across subsequent years.

The report indicates that national chains—those that span multiple states—appear to be more successful at improving the financial performance of acquired hospitals compared with local/regional chains. However, quantifiable value from local/regional deals varies widely. 

According to the report, national chains seem to be better at optimizing synergies around supply chain costs, labor, and payer contracts.

Publication Date: Friday, May 31, 2013