Hospital merger and acquisition (M & A) activity has increased significantly in the past decade, driven by the pursuit of economies of scale and the potential for reducing the cost of care. In partnership with the Deloitte Center for Health Solutions, HFMA conducted a study of more than 750 merger transactions between 2008 and 2014 to examine how M&A impacts a hospital’s performance. After factoring in market and hospital characteristics, the research revealed that acquired hospitals, on average, experienced a post-transaction decline in operating margins, revenue, and expenses that typically lasted two years. Taking an in-depth look at mergers that achieved more favorable results than others, researchers identified eight strategies and business practices related to integration planning and execution that correlated with achievement of higher margins.
Read HFMA’s report, Acquisition and Affiliation Strategies.
Read HFMA’s environmental assessment on industry consolidation.